PHILIPS INTERNATIONAL REALTY CORP.
and
BANKBOSTON, N.A., as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
Dated as of
March 31, 1999
TABLE OF CONTENTS
Page
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................5
Section 3. Issue of Right Certificates.......................................5
Section 4. Form of Right Certificates........................................7
Section 5. Countersignature and Registration.................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights....................................................8
Section 8. Cancellation and Destruction of Right Certificates...............10
Section 9. Reservation and Availability of Shares of Stock..................10
Section 10. Preferred Stock Record Date......................................12
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights.................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......19
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.................................................19
Section 14. Fractional Rights and Fractional Shares..........................20
Section 15. Rights of Action.................................................21
Section 16. Agreement of Right Holders.......................................22
Section 17. Right Certificate Holder Not Deemed a Stockholder................22
Section 18. Concerning the Rights Agent......................................22
Section 19. Merger or Consolidation or Change of Name of Rights Agent........23
Section 20. Duties of Rights Agent...........................................24
Section 21. Change of Rights Agent...........................................26
Section 22. Issuance of New Right Certificates...............................27
Section 23. Redemption and Termination.......................................27
Section 24. Exchange.........................................................28
Section 25. Notice of Certain Events.........................................29
Section 26. Notices..........................................................30
Section 27. Supplements and Amendments.......................................30
Section 28. Successors.......................................................31
Section 29. Determinations and Actions by the Board of Directors.............31
Section 30. Benefits of this Agreement.......................................32
Section 31. Severability.....................................................32
Section 32. Governing Law....................................................32
Section 33. Counterparts.....................................................32
Section 34. Descriptive Headings.............................................32
EXHIBIT A Articles Supplementary, Description and Certain Terms of
Series A Participating Preferred Stock..........................A-1
EXHIBIT B Form of Right Certificate.......................................B-1
EXHIBIT C Summary of Rights to Purchase Preferred Stock...................C-1
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Shareholder Rights Agreement, dated as of March 31, 1999, between
Philips International Realty Corp., a Maryland corporation (the "Company"), and
BankBoston, N.A., a Massachussetts corporation, as Rights Agent (the "Rights
Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on February 22, 1999
(the "Rights Dividend Authorization Date") authorized a dividend distribution
(the "Distribution") of one preferred share purchase right (a "Right") for each
share of Common Stock, par value $0.01 per share, of the Company (the "Common
Stock") outstanding at the close of business on March 31, 1999 (the "Record
Date"), each Right representing the right to purchase, under certain
circumstances, one one-thousandth of a share of Preferred Stock (as hereinafter
defined) of the Company, and has further authorized and directed the issuance of
one Right (as such number may hereinafter be adjusted pursuant to the provisions
of Section 11(p) hereof) with respect to each share of Common Stock issued and
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date (as such terms are hereinafter
defined;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Stock
of the Company then outstanding, but shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding shares of Common Stock for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no person
shall become an "Acquiring Person" solely by virtue of its beneficial ownership,
on the date hereof, of 15% or more of the shares of Common Stock of the Company
outstanding as of the date hereof; provided, however, that if any Person that,
on the date hereof, beneficially owns 15% or more of the shares of Common Stock
of the Company outstanding as of the date hereof shall, after the date hereof,
acquire any additional shares of Common Stock of the Company such that such
Person's beneficial ownership of shares of Common Stock of the Company,
expressed as a percentage of the total number of shares of Common Stock of the
Company then outstanding, shall be 10% or more greater than the beneficial
ownership of shares of Common Stock of the Company of such Person on the date
hereof (expressed as a percentage of the total number of shares of Common Stock
of the Company outstanding on the date hereof), then such Person shall be deemed
to be an "Acquiring Person." Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as a result of (i) an acquisition of shares of
Common Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares
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beneficially owned by such Person to 15% or more of the shares of Common Stock
of the Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding by reason of shares purchased by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of an
additional 2% or more greater than the beneficial ownership of shares of Common
Stock of the Company of such Person on the date thereof (expressed as a
percentage of the total number of shares of Common Stock of the Company then
outstanding), then such Person shall be deemed to be an "Acquiring Person" or
(ii) the sale to such Person of any shares of Common Stock of the Company
pledged by a current shareholder resulting from the default of such shareholder
under the applicable pledge agreement. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of Common Stock
so that such Person would no longer be an "Acquiring Person," then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(e) "Agreement" shall mean this Shareholder Rights Agreement, dated as
of March 31, 1999.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the occurrence of an event) pursuant to any
agreement, arrangement or understanding (whether or not in writing and
other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," securities tendered
pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange or (B) the right to vote pursuant
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to any agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing and other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the provision to subparagraph (ii)(B) of this paragraph
(f)) or disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition of
Beneficial Ownership shall cause a Person ordinarily engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired in a bona fide firm commitment underwriting
pursuant to an underwriting agreement with the Company.
(g) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of New York or the state in
which the principal office of the Rights Agent is located are authorized or
obligated by law or executive order to close.
(h) "Certification" shall mean the certification concerning beneficial
ownership appended to the Form of Assignment and Form of Election to Purchase
included as part of Exhibit B attached hereto.
(i) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M. New York City time on the next succeeding
Business Day.
(j) "Common Stock" when used with reference to the Company shall mean
the common stock, par value $0.01 per share, of the Company. "Common Stock" when
used with reference to any Person other than the Company shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person
or, if such Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person.
(k) "Company" shall mean Philips International Realty Corp., a Maryland
corporation.
(l) "Distribution" shall mean a dividend distribution of Rights
authorized by the Board of Directors of the Company.
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(m) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(n) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(o) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(p) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(q) "Final Expiration Date" shall mean March 31, 2009.
(r) "Independent Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the Board, who is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and either (i) was a member of the Board on the date hereof, or (ii)
was recommended or elected to succeed an Independent Director by a majority of
the Independent Directors.
(s) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
(t) "Person" shall mean any individual, firm, corporation, partnership
or other entity and shall include any successor (by merger or otherwise) of such
entity.
(u) "Preferred Stock" shall mean the shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company, having
the rights and preferences set forth in the Form of Articles Supplementary
attached hereto as Exhibit A.
(v) "Purchase Price" shall have the meaning set forth in Section 4
hereof.
(w) "Record Date" shall mean March 31, 1999.
(x) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(y) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(z) "Rights Agent" shall mean BankBoston, N.A., a Massachussetts
corporation.
(aa) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(bb) "Rights Dividend Authorization Date" shall have the meaning set
forth in the recitals hereto.
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(cc) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, includes a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(dd) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
such Person.
(ee) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(ff) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
(gg) "Triggering Event" shall mean any event specified 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 hereof, 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 other co-rights
agents as it may deem necessary or desirable upon ten days written notice to the
Rights Agent. In no event shall the Rights Agent have any duty to supervise or
in any way be liable for such co-rights agents.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the close of business on the tenth calendar day after the Shares Acquisition
Date or (ii) the close of business on the tenth calendar 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,
or first public announcement of the intent of any Person (in each case other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding shares of
Common Stock of the Company for or pursuant to the terms of such plan) to
commence, a tender or exchange offer, the consummation of which would result in
any Person becoming an Acquiring Person (the earlier of the dates in subsections
(i) and (ii) hereof being herein referred to as the "Distribution Date"), (A)
the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for the Common Stock registered in the names of
the holders thereof (which certificates also shall be deemed to be Right
Certificates) and not by separate Right Certificates, and (B) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Stock. As soon as practicable after the Distribution Date,
the Company will prepare and execute and the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, postage pre-paid mail, to each record holder of
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right certificate,
in substantially the form set forth in Exhibit B attached hereto (a "Right
Certificate"), representing one Right for
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each share of Common Stock so held, subject to adjustment as provided herein. As
of the Distribution Date, the Rights will be represented solely by such Right
Certificates.
(b) As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Preferred Stock, in substantially
the form set forth in Exhibit C attached hereto (the "Summary of Rights"), by
first-class, postage pre-paid mail, to each record holder of 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. With respect to certificates for shares of Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
will be represented by such certificates registered in the names of the holders
thereof, together with a copy of the Summary of Rights attached thereto. Until
the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any of the certificates for
Common Stock outstanding on the Record Date shall also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the earlier of the Distribution Date,
the Redemption Date or the Final Expiration Date, or, in certain circumstances
provided in Section 22 hereof, after the Distribution Date. Certificates
representing such shares of Common Stock 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 Shareholder Rights Agreement between
Philips International Realty Corp. and BankBoston, N.A., dated as of
March 31, 1999 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Philips International Realty Corp..
Under certain circumstances set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Philips International Realty Corp. will
mail to the holder of this certificate a copy of the Rights Agreement
as in effect on the date of mailing without charge, after receipt of a
written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void."
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Common Stock represented
by certificates containing the foregoing legend shall be represented by such
certificates alone, and the surrender for transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock represented thereby. In the event that the Company purchases or acquires
any shares of Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such shares of Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer
outstanding. The failure to print the foregoing legend on any such Common Stock
certificate or
6
any other defect therein shall not affect in any manner whatsoever the
application or interpretation of the provisions of Section 7(e) hereof.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed on
the reverse thereof) shall be substantially as set forth in Exhibit B attached
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock (or
following the occurrence of a Triggering Event, Common Stock) as shall be set
forth therein at the price per one one-thousandth of a share of Preferred Stock
set forth therein (the "Purchase Price"), but the number of such one
one-thousandths of a share of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by one of its authorized
officers either manually or by facsimile signature. The Right Certificates shall
be countersigned by an authorized signatory of the Rights Agent either manually
or by facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by an authorized
signatory of the Rights Agent and issued and delivered by the Company 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.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, 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
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Right Certificates, the number of Rights represented on its face by each of the
Right Certificates, and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-thousandths
of a share of Preferred Stock (or following the occurrence of a Triggering
Event, Common Stock) as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence, as the Company shall reasonably request,
of the identity of the Beneficial Owner, Affiliates or Associates thereof or of
the holder, or of any other Person with which such holder or any of such
holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of securities of the Company. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment from a Right Certificate holder of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon receipt by the 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, along with a signature guarantee and
such other further documentation as the Rights Agent may reasonably request,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights
8
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the designated office of the Rights Agent, together with
payment of the aggregate Purchase Price for the total number of one
one-thousandths of shares of Preferred Stock (or following the occurrence of a
Triggering Event, Common Stock) as to which the Rights are then being exercised,
at or prior to the earliest of (i) the close of business on March 31, 2009 (the
"Final Expiration Date"), (ii) the time at which the Rights are exchanged as
provided in Section 24 hereof, or (iii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date").
(b) The Purchase Price for each one one-thousandth of a
share of Preferred Stock purchasable pursuant to the exercise of a Right shall
initially be $55.00, shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the number of one
one-thousandths of shares of Preferred Stock (or following the occurrence of a
Triggering Event, Common Stock) to be purchased and an amount equal to any
applicable transfer tax required to be paid, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of Preferred Stock certificates
representing the number of one one-thousandths of a share of Preferred Stock to
be purchased, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests; (ii) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-thousandths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent), and the Company hereby directs
the depositary agent to comply with such request; (iii) when appropriate,
requisition from any transfer agent of the Common Stock of the Company
certificates for the total number of shares of Common Stock to be paid in
accordance with Sections 11(a)(ii) and 11(a)(iii); (iv) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof; (v) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder; and (vi) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. The
payment of the Purchase Price may be made in cash or by certified bank check,
bank draft or money order payable to the order of the Company.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights represented thereby, a new
Right Certificate representing 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.
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(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of an event specified in Section
11(a)(ii) hereof, any Rights beneficially owned by (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person; (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became such; or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is a part of a plan, arrangement or understanding
(whether or not in writing) which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) are complied with, but shall have no liability
to any holder of Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise; and (ii) provided such additional evidence of the
identity of the Beneficial Owner, Affiliates or Associates thereof or of the
holder, or of any other Person with which such holder or any of such holder's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting or
disposing of any securities of the Company 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 canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and
10
unissued shares of Preferred Stock (or following the occurrence of a Triggering
Event, Common Stock) or any shares of Preferred Stock (or following the
occurrence of a Triggering Event, Common Stock), the number of shares of
Preferred Stock (or following the occurrence of a Triggering Event, Common
Stock) that will be sufficient to permit the exercise in full of all outstanding
Rights (it being understood that any of the foregoing shares or securities may
also be reserved for other purposes) or will take such other steps as are
appropriate to assure that the number of such shares sufficient to permit the
exercise in full of all outstanding Rights will be available upon such exercise.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of an event specified in Sections 11(a)(ii) or Section
13 hereof, Common Stock) and/or other securities issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable (but only to the extent that it is reasonably likely that the Rights
will be exercised), all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) (A) to
file, as soon as practicable following the first occurrence of an event
specified in Section 11(a)(ii) hereof, or as soon as required by law, as the
case may be, a registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (B)
to cause such registration statement to become effective as soon as practicable
after such filing, and (C) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (i) the date as of which the Rights are no longer
exercisable for such securities, and (ii) the Expiration Date; and (ii) to (A)
file appropriate applications with any state or federal regulatory bodies having
jurisdiction over the issuance of the securities (or assets) purchasable upon
exercise of the Rights in order to obtain any approvals or orders of such bodies
as may be legally required, (B) cause such approvals to be obtained or orders to
be issued as soon as practicable after such filing and (C) cause such approvals
or orders to remain effective until the earlier of (1) the date as of which the
Rights are no longer exercisable for such securities (or assets), and (2) the
Expiration Date, to the extent not previously obtained. The Company also will
take such action as may be appropriate under the blue sky laws of the various
states. The Company may temporarily suspend, (i) for a period of time not to
exceed ninety (90) days after the date set forth in clause (i)(A) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective
and (ii) for a period of time not in excess of 180 days after such date (or for
such longer period as is required by any applicable law, rule or regulation of
any appropriate regulatory bodies ), the exercisability of the Rights in order
to obtain any such required regulatory body approvals or orders. Upon any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisabi1ity
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent 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
qualifications in such jurisdiction shall have been obtained.
11
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of the Preferred
Stock (or following the occurrence of a Triggering Event, Common Stock)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.
(e) The 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 the Preferred Stock (or following the
occurrence of a Triggering Event, Common Stock) upon the exercise of Rights. The
Company shall not, however, be required (i) 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 the Preferred Stock
(or following the occurrence of a Triggering Event, Common Stock) in a name
other than that of, the registered holder of the Right Certificate representing
Rights surrendered for exercise or (ii) to issue or deliver any certificates for
shares of the Preferred Stock (or following the occurrence of a Triggering
Event, Common Stock) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for any number of shares of Preferred Stock (or following
the occurrence of a Triggering Event, Common Stock) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the shares of Preferred Stock (or following the occurrence of a Triggering
Event, Common Stock) represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate representing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or Common Stock) transfer
books of the Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock) transfer
books of the Company are open. Prior to the exercise of the Rights represented
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of one one-thousandths of a
share of Preferred Stock covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) authorize a dividend on the Preferred Stock
payable in shares of the Preferred
12
Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares or (D) issue any
shares of its stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or 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 stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock (or Common Stock) transfer books of the Company were open, he or
she would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-thousandths
of a share of Preferred Stock for which such Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of shares of Preferred
Stock, such number of shares of the Common Stock of the Company as shall equal
the result obtained by (1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right is
then exercisable and dividing that product by (2) 50% of the then current per
share market price of the Common Stock of the Company (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of such event (such number
of shares are hereinafter referred to as the "Adjustment Shares").
From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void, and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement. No Right Certificate shall be issued pursuant to Section 3
hereof that represents Rights beneficially owned by an Acquiring Person whose
rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; No Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; Any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be canceled.
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's charter but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall take all such action
13
as may be necessary to authorize additional shares of Common Stock for issuance
upon exercise of the Rights, and the Company may, in the discretion of the Board
of Directors of the Company, and shall, in the event the Company shall be unable
to take all such action as may be necessary to authorize such additional shares
of Common Stock, substitute, for each share of Common Stock that would otherwise
be issuable upon exercise of a Right, a number of shares of Preferred Stock or
fraction thereof such that the current per share market price of one share of
Preferred Stock multiplied by such number or fraction is equal to the current
per share market price of one share of Common Stock as of the date of issuance
of such share of Preferred Stock or fraction thereof.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or securities having
substantially the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred
Stock or Equivalent Preferred Stock (or having a conversion price per share, if
a security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the then current per share market price of the Preferred Stock or
Equivalent Preferred Stock, as the case may be, on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock or Equivalent Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent Preferred Stock so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of stock of the Company issuable upon exercise
of one Right. In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the 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 the Rights. Shares of Preferred 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, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in
14
Section 11 (b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred 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 assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock and the denominator of which shall be
such current per share market price of the Preferred Stock; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock to the
Company to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of
the Security is determined during the period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares or
(B) any subdivision, combination or reclassification of such Security, and prior
to the expiration of the requisite 30 Trading Day period, after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current per
share market price equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not 1isted or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. If on any such date
no market maker is making a market in the Common Stock, the fair value of such
shares on such date shall be as determined in good faith by the Independent
Directors if the Independent Directors constitute a majority of the Board of
Directors or, in the event the Independent Directors do not constitute a
majority of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination
15
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the Preferred Stock shall be
determined in accordance with the method set forth in Section 11(d)(i). If the
Preferred Stock is not publicly held or listed or traded in any manner described
in clause (i) of this Section 11(d), the "current per share market price" of the
Preferred Stock shall be conclusively deemed to be the current per share market
price of the Common Stock as determined pursuant to Section 11(d)(i), multiplied
by 1,000. If neither the Common Stock nor the Preferred Stock is publicly held
or so listed or traded, "current per share market price" of the Preferred Stock
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. For all
purposes of this Agreement, the "current per share market price" of one
one-thousandths of a share of Preferred Stock shall be equal to the "current per
share market price " of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-millionth of a share of Preferred
Stock or one ten-thousandth of a share of Common Stock, 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 Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of stock of the Company other than shares of
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in Section
11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13
with respect to the Preferred 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 share evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
16
(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 Section 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
(calculated to the nearest one one-millionth) obtained by (i) multiplying (A)
the number of shares of Preferred Stock covered by a Right immediately prior to
such adjustment by (B) 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 to adjust the number of Rights, in substitution
for any adjustment in the number of shares of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of shares of Preferred
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after the adjustment of the Purchase Price. The Company shall make a public
announcement (and shall give simultaneous written notice to the Rights Agent) of
its election to adjust the number of Rights, indicating the record date for the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of Right
Certificates on such record date Right Certificates representing, 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
representing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preferred 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 of
Preferred Stock which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the
17
Purchase Price below one one-thousandth of the then par value, if any, of a
share of Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock at such adjusted Purchase Price.
(1) 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 Preferred Stock and other stock or securities of the Company,
if any issuable upon such exercise over and above the shares of Preferred Stock
and other 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 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 the Board of Directors of the Company, in
its sole discretion, shall determine to be advisable in order that any
consolidation or subdivision of shares of Preferred Stock, issuance wholly for
cash of any of shares of Preferred Stock at less than the current per share
market price, issuance wholly for cash of the Preferred Stock or securities
which by their terms are convertible into or exchangeable for Preferred Stock,
dividends on Preferred Stock payable in shares of Preferred Stock or issuance of
rights, options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23, 24 and 27
hereof, take (nor will it permit any of its Subsidiaries to take) any action if
at the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(n)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(n)),
or (iii) sell or transfer (or permit any of its Subsidiaries to sell or
transfer), in one or more transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(n)) 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
18
consolidation, merger or sale, the stockholders of the Person specified in
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date and prior to the Distribution Date (i) authorize a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock or (ii)
effect a subdivision, combination or consolidation of the outstanding shares of
Common Stock into a greater or lesser number of shares of Common Stock, then in
any such case (A) the number of one one-thousandths of a share of Preferred
Stock purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-thousandths of a Preferred Share
so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which is the number of shares of Common Stock
outstanding immediately after such event, and (B) each share of Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each share of Common Stock outstanding immediately
prior to such event had issued with respect to it. The adjustments provided for
in this Section 11(p) shall be made successively whenever such a dividend is
authorized, declared or paid or such a subdivision, combination or consolidation
is effected.
(q) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date, the Company may, in lieu of making any
adjustment to the Purchase Price, the number of shares of Preferred Stock
eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Section 11(a)(1),
11(b), 11(c), 11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement and such
Sections.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13 hereof
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Preferred
Stock and the Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
26 hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained, and shall not be obligated
or responsible for calculating any adjustment, nor shall it be deemed to have
knowledge of such an adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. In the event that, following the Shares Acquisition Date,
directly or indirectly, (a) the Company shall consolidate with, or merge with
and into, any other Person and the Company shall not be the continuing
19
or surviving corporation of such consolidation or merger, (b) any Person 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 Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any of its wholly-owned Subsidiaries, then, and in each such case
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly issued, fully paid, non-assessable and
freely tradable shares of common stock of such other Person (including the
Company as successor thereto or as the surviving corporation) as shall be equal
to the result obtained by (A) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right is
then exercisable by (B) 50% of the then current per share market price of the
common stock of such other Person (determined pursuant to Section 11(d) hereof)
on the date of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such common stock shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its common stock in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its common stock thereafter deliverable
upon the exercise of the Rights.
(b) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a supplemental
agreement so providing.
The Company shall not enter into any transaction of the type referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
consolidations, mergers, sales or other transfers.
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 represent fractional Rights. In lieu of such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale
20
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which represent fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock). In lieu of fractional shares of Preferred Stock
that are not integral multiples of one one-thousandth of a share of Preferred
Stock, the Company shall pay to the registered holders of Right Certificates at
the time the Rights represented thereby are exercised as herein provided an
amount in cash equal the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value one one-thousandth of a share of Preferred Stock
shall be one one-thousandth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as otherwise provided by this Section
14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, except for the rights of action given to the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder 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 to enforce, or otherwise act in respect of, his
right to exercise the Rights represented by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder and injunctive relief against actual or threatened
21
violations of the obligations hereunder 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:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the shares of Common Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly endorsed and
accompanied by a proper instrument of transfer, along with a signature guarantee
and such other and further documentation as the Rights Agent may reasonably
request;
(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 represented thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary;
(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 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 Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
22
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement or the exercise or performance
of its duties hereunder, including the costs and expenses of defending against
any claim of 1iability in the premises.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement or the exercise or performance of its duties
hereunder, in reliance upon any Right Certificate or certificate for shares of
Preferred Stock or Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, instruction, adjustment notice, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (Including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action.
The indemnity provided for in this Section 18 shall survive the
expiration of the Rights, the termination of this Agreement, and the resignation
or removal of the Rights Agent. The costs and expenses of enforcing this right
of indemnification also shall be paid by the Company.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation, succeeding to the stock
transfer or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case, at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor so countersigned and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
23
In case, at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver the Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement (and no implied duties or
obligations shall be read into this Agreement against the Rights Agent) upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the written opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Executive Vice President or Vice
President, the Treasurer or the 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 Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the 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 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 Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights or any adjustment in the terms of the Rights (including the manner,
method or amount of any such adjustment), or for ascertaining
24
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights represented by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Preferred Stock 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 Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Executive
Vice President or Vice President, the Secretary or the Treasurer of the Company,
and is authorized to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such
officer. An application by the Rights Agent for written instructions by the
Company may set forth in writing any action proposed to be taken or omitted by
the Rights Agent with respect to its duties and obligations under this Agreement
and the date on or after which such action shall be taken or such commission
shall be effective. The Rights Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall not be less than five
Business Days after the Company receives such application) without the consent
of the Company unless, prior to taking or omitting such action, the Rights Agent
has received written instructions in response to application specifying the
actions to be taken or omitted, as the case may be.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or any other securities of the Company or become pecuniarily interested
in any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, so long as the Rights Agent was not grossly
negligent.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing
25
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response, the Rights Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting the Company. The Company shall give the Rights
Agent prompt written instructions as to the action to be taken regarding the
Right Certificates involved. The Rights Agent shall not be liable for acting in
accordance with such instructions.
(1) The Rights Agent shall not be required to take notice
or be deemed to have notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate) under
this Agreement unless and until the Rights Agent shall be specifically notified
in writing by the Company of such fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' written notice mailed to the Company and to
each transfer agent of the Preferred Stock and the Common Stock by registered or
certified mail, and, at the Company's expense, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' written notice, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Stock and 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 otherwise shall become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States, in good standing, which is
authorized under such laws to exercise stock transfer or corporate trust powers
and is subject to supervision or examination by federal or state authority or
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $25 million. 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 written
notice thereof with the predecessor Rights Agent and each transfer agent of the
Preferred Stock and the Common Stock, and mail a written notice thereof to the
registered holders of the Right Certificates. Failure to give any notice
26
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates representing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this 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 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 and Termination. (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 calendar day following the Shares
Acquisition Date (or if the Shares Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth day following the Record
Date) or (ii) the Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.0l per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Subject to the terms hereof and to the
immediately preceding sentence, the redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and on such
conditions as the Board of Directors in its sole discretion may establish. The
Company may, at its option, pay the Redemption Price either in shares of its
Common Stock (valued at their then current per share market price as defined in
Section 11(d)(i) on the date of the redemption), other securities, cash or other
assets.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right held.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption. The Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to the Rights Agent and to all such holders at their last
27
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common 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. 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 hereof, and
other than in connection with the repurchase of Common Stock prior to the
Distribution Date.
Section 24 Exchange. (a) The Board of Directors of the Company
may, at its option, by resolution adopted at any time after any Person becomes
an Acquiring Person, provide that the Company shall exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. Promptly after the action of the Board
of Directors ordering an exchange of the Rights, the Company shall give notice
of any such exchange to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent. 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 for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute shares of Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in Section 11(b) hereof) for shares of
Common Stock exchangeable for the Rights, at the initial rate of one
one-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock) for
each share of Common Stock, as appropriately adjusted to reflect adjustments in
the dividend rights of the Preferred Stock pursuant to the terms thereof.
(d) In the event that there shall not be sufficient
shares of Common Stock issued, but not outstanding, or authorized but unissued,
to permit any exchange of Rights as
28
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Stock for issuance
upon exchange of the Rights, and the Company may, in the discretion of the Board
of Directors of the Company, and shall, in the event the Company shall be unable
to take all such action as may be necessary to authorize such additional shares
of Common Stock, substitute, for each share of Common Stock that would otherwise
be issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof such that the current per share market price of one share of
Preferred Stock multiplied by such number or fraction is equal to the current
per share marker price of one share of Common Stock as of the date of issuance
of such shares of Preferred Stocks or fraction thereof.
(e) The Company shall not be required to issue fractional
shares of Common Stock or to distribute certificates which represent fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph (e),
the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
(f) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any share of Common Stock
exchangeable for a Right (i) equity securities of the Company deemed to have the
same value as shares of Common Stock, (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (v) any combination of the foregoing, having an
aggregate value which a majority of the Independent Directors and the Board of
Directors of the Company shall have determined in good faith to be equal to the
then current per share market price of Common Stock (determined pursuant to
Section 11(d) hereof) on the Trading Date immediately preceding the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend); (b) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options; (c) to effect any reclassification of Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock); (d) to effect any consolidation or merger into or with any other Person
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person; (e) to effect the
liquidation, dissolution or winding up of the Company; or (f) to authorize,
declare or pay any dividend on the shares of Common Stock payable in shares of
Common Stock or to effect a subdivision, combination or consolidation of the
shares of Common Stock (by reclassification or otherwise than by payment of
dividends in shares of Common Stock), then, in each such case, the
29
Company shall give to the Rights Agent and to each holder of a Right, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Preferred Stock and/or 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 (a) or (b)
above at least ten (10) days prior to the record date for determining holders of
the Preferred Stock for purposes of such action and, in the case of any such
other action, at least ten (10) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Stock, whichever shall be the earlier.
In case an event set forth in Section 11(a)(ii) hereof shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to the Rights Agent and to each holder of a Right, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall specify
such event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the 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:
Philips International Realty Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid and addressed (until
another address is filed in writing with the Company) as follows:
BankBoston, N.A.
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution
Date, the Company may, and the Rights Agent shall, if the Company so directs,
from time to time
30
supplement or amend any provision of this Agreement as the Company may deem
necessary or desirable without the approval of any holders of the Common Stock.
Without limiting the foregoing, the Company may, at any time prior to such time
as any Person becomes an Acquiring Person, amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof to not less than the
greater of (a) the sum of .001% and the largest percentage of the outstanding
shares of Common Stock then known by the Company to be beneficially owned by any
Person (other than any Person that, on the date hereof, beneficially owns 15% or
more of the shares of Common Stock of the Company outstanding as of the date
hereof and other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding shares of Common Stock for or pursuant to the terms of any such plan)
and (b) 10%. From and after the Distribution Date, the Company may, and the
Rights Agent shall, if the Company so directs, from time to time supplement or
amend any provision of this Agreement without the approval any holder of Right
Certificates in order (a) to cure any ambiguity, (b) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
of other provisions herein, (c) to shorten or lengthen any time period
hereunder, or (d) to change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person); provided,
however, that from and after the Distribution Date, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (c) of this sentence,
(i) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable or (ii) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and the benefits to, the holders of Rights (other than an Acquiring Person
or any Affiliate or Associate of an Acquiring Person). Prior to the Distribution
Date, the interests of the holders of Rights shall be coincident with the
interests of the holders of shares of Common Stock of the Company. Upon the
delivery of a certificate from an appropriate officer of the Company or, so long
as any Person is an Acquiring Person, from the majority of the Company's Board
of Directors, 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. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment to this Agreement that changes the rights
and duties of the Rights Agent under this Agreement will be effective without
the consent of the Rights Agent.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors of the Company (and, where specifically
provided for herein, the Continuing Directors or Independent Directors) shall
have
31
the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
the Company (or, as expressly provided, the Continuing Directors or Independent
Directors), 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 the purpose of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors (or, as provided
for, by the Continuing Directors or Independent Directors) in good faith (i)
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (ii) shall not
subject the Board of Directors or the Continuing Directors or Independent
Directors to any liability to the holders of the Right Certificates.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the 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 Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, of the Common
Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Maryland and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
PHILIPS INTERNATIONAL REALTY CORP.
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Petra
Title: President
Attest:
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Assistant to the President
BANKBOSTON, N.A.
By: /s/ Xxxxx Xxxxxx-Xxxx
---------------------
Name: Xxxxx Xxxxxx-Xxxx
Title: Administration Manager
Attest:
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Account Manager
33
EXHIBIT A
PHILIPS INTERNATIONAL REALTY CORP.
FORM OF
ARTICLES SUPPLEMENTARY
FOR
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Pursuant to Sections 2-105(a)(9) and 2-208(a)
of the Maryland General Corporation Law)
PHILIPS INTERNATIONAL REALTY CORP., a Maryland corporation (the
"Company") hereby certifies to the State Department of Assessments and Taxation
of Maryland that:
FIRST: Pursuant to authority conferred upon the Board of Directors by
the Amended and Restated Articles of Incorporation, as amended, of the Company
(the "Charter"), the Board of Directors, as required by Section 2-208 of the
Maryland General Corporation Law, pursuant to resolutions adopted at a meeting
duly called on February 22, 1999, classified and designated 100,000 shares (the
"Shares") of authorized but unissued Preferred Stock (as defined in the Charter)
as shares of Series A Junior Participating Preferred Stock, with the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption as follows, which upon any restatement of the
Charter shall be made part of Article IV of the Charter, with any necessary or
appropriate changes to the enumeration or lettering of sections or subsections
hereof:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. Designation and Amount. This series of Preferred
Stock shall be designated the "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares which shall constitute
the Series A Preferred Stock shall be 100,000 shares. Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A Preferred Stock
to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series A Preferred Stock.
Section 2. Dividend Rights. (a) Subject to the rights of holders
of any shares of any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to the holders
of Common Stock, par value $0.01 per share (the "Common Stock"), of
A-1
the Company and of any other junior stock, shall be entitled to receive, when,
as and if authorized by the Board of Directors out of assets legally available
for the purpose, quarterly dividends payable in cash on the first business day
of April, July, October and January in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 or (ii) subject to the provision
for adjustment hereinafter set forth, 1,000 times the aggregate per share amount
of all cash dividends, and 1,000 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions (other than a dividend
payable in shares of Common Stock) or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise)) authorized on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the Board
of Directors of the Company shall at any time (A) authorize, declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or (ii) effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of Series A Preferred Stock were entitled
immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (a) of this Section 1
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Shares shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred
A-2
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the stockholders of
the Company. In the event the Company shall at any time (i) declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or (ii) effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other
articles supplementary creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other stock of the Company having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Company.
(c) Except as set forth herein, holders of shares of
Series A Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not authorized or declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Company shall not:
(i) authorize, declare or pay dividends, or make
any other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) authorize, declare or pay dividends, or make
any other distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
A-3
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Company may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Company ranking junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock,
subject to the conditions and restrictions on issuance set forth herein, in the
Charter or in any other articles supplementary creating a series of Preferred
Stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $55.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
authorized or declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment as hereinafter set
forth, equal to 1,000 times the aggregate amount to be distributed per share to
holders of shares of Common Stock, or (b) to the holders of shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Board of Directors of
the Company shall at any time authorize, declare or pay any dividend on the
combination or consolidation of the outstanding shares of
A-4
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(a) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Merger, Consolidation, Etc. In case the Company shall enter
into any merger, consolidation, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Board of Directors of the Company shall at any time (a)
authorize, declare or pay any dividend on the Common Stock payable in shares of
Common Stock or (b) effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Ranking . The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution, winding up or otherwise, junior to all series of the
Company's Preferred Stock, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment. The Charter, including these Articles
Supplementary establishing the rights and preferences of the Series A Preferred
Stock, shall not be amended in any manner which would materially alter or change
the preferences, voting powers or other rights or restrictions of the Series A
Preferred Stock, as set forth herein, so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Preferred Stock, voting together as a single class.
Section 11. Restrictions and Limitations. Shares of Series A
Preferred Stock shall be subject to the restrictions and limitations set forth
in Article VI of the Charter.
A-5
Section 12. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
Section 13. No Conversion Rights. The holders of the Series A
Preferred Stock shall not have any rights to convert such shares into shares of
any other class or series of stock of the Company or into any other securities
of, or interest in, the Company.
Section 14. No Preemptive Rights. No holder of shares of Series A
Preferred Stock shall have any preemptive or preferential right to subscribe
for, or to purchase, any additional shares of stock of the Company of any class
or series, or any other security of the Company which the Company may issue or
sell.
SECOND: The Shares have been classified and designated by the Board of
Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the Board of
Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Company acknowledges these
Articles Supplementary to be the corporate act of the Company and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
A-6
IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to be
executed under seal in its name and on its behalf by its President and attested
to by its Assistant Secretary on this ______ day of ____________, 1999.
PHILIPS INTERNATIONAL REALTY CORP.
By: _______________________________
Name:
Title:
[SEAL]
Attest:
By: ____________________________
Name:
Title:
A-7
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R Rights
NOT EXERCISABLE AFTER March 31, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.0l PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHT AGREEMENT.
PHILIPS INTERNATIONAL REALTY CORP.
Right Certificate
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
Shareholder Rights Agreement, dated as of March 31, 999 (the "Rights
Agreement"), between Philips International Realty Corp., a Maryland corporation
(the "Company"), and BankBoston, N.A., a Massachussetts corporation, as rights
agent (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M. (New York City time) on March 31, 2009 at the designated office of the
Rights Agent, or its successors as Rights Agent, one one-thousandth of a fully
paid non-assessable share of Series A Junior Participating Preferred Stock, par
value $.0l per share (the "Preferred Shares"), of the Company, at a purchase
price of $55.00 per one one-thousandth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights represented by this
Right Certificate (and the number of one one-thousandths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price per one one-thousandths of a Preferred Share set forth above, are the
number and Purchase Price as of ____________, 1999, based on the Preferred
Shares of the Company as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-thousandths of a
Preferred Share which may be purchased upon the exercise of the Rights
represented by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and at the executive
B-1
offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder to purchase a like aggregate number of
one one-thousandths of a Preferred Share 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
represented by this Certificate (i) may be redeemed by the Company at a
redemption price of $.0l per Right or (ii) may be exchanged in whole or in part
for shares of the Company's Common S, par value $0.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights represented hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights represented 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.
B-2
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. This Right Certificate is dated as of ___________, 1999.
{SEAL}
ATTEST: PHILIPS INTERNATIONAL REALTY CORP.
By: ___________________________ By: ___________________________
Name: Name:
Title: Title:
Countersigned:
BANKBOSTON, N.A. as Rights Agent
By: ___________________________
Authorized Signatory
Date:
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to transfer the within
Right Certificate on the books of the with-in-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.)
_______________________________________________________________
Certification:
The undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate o
Associate thereof (as defined in the Rights Agreement).
_______________________________________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certification 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.
B-4
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed by holder if such holder desires to
exercise Rights represented by the Right Certificate.)
PHILIPS INTERNATIONAL REALTY CORP.:
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security or other taxpayer identifying number: ____________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights represented by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other taxpayer identifying number: ____________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: ________________________
________________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.)
_______________________________________________________________
B-5
Certification:
The undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_______________________________________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certification 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.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On February 22, 1999, the Board of Directors of Philips International
Realty Corp. (the "Company") authorized a dividend distribution (the
"Distribution") of one preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $0.01 per share (the "Common
Shares"), of the Company. The dividend is payable on March 31, 1999 (the "Record
Date"), to the stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, par value $.01 per share (the
"Preferred Shares"), of the Company at a price of $55.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Shareholder Rights
Agreement (the "Rights Agreement") by and between the Company and BankBoston,
N.A., as rights agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) ten calendar days following
the date (the "Shares Acquisition Date") of public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") have acquired,
or obtained the right to acquire, beneficial ownership of fifteen percent (15%)
or more of the outstanding Common Shares (the "Share Acquisition Date") or (ii)
ten calendar days (or such later date as may be determined by action of the
Board of Directors prior to the time any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of, or public
announcement of an intent to commence, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of fifteen percent (15%) or more of the outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"). Until the
Distribution Date, the Rights will be evidenced by the Common Share certificates
and will be transferred with and only with such Common Share certificates. New
Common Share certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date,
the surrender for transfer of any certificates representing outstanding Common
Shares also will transfer the Rights associated with the Common Shares
represented by such certificate. Any person or group owning in excess of 15% of
the outstanding Common Shares as of March 31, 1999, shall only trigger the
effects referred to above if such person increases its ownership of Common
Shares to 10% or more greater than the beneficial ownership of Common Shares of
such Person on such date.
As soon as practicable following the Distribution Date, separate
certificates representing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of
C-1
the close of business on the Distribution Date and such separate Right
Certificates alone will represent the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on March 31, 2009 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or the Right Certificates
are earlier redeemed or exchanged by the Company, as described below. Each Right
generally will entitle the holder to purchase one one-thousandth (1/1,000th) of
a Preferred Share of the Company at a price of $55.00.
Exercise of Rights for Common Stock of the Company ("Flip-In" Provision)
In the event that, following the Distribution Date, any person or group
becomes an Acquiring Person, each holder of a Right will thereafter have the
right to receive, upon exercise, Common Shares having a market value equal to
two times the Purchase Price of the Right. Notwithstanding any of the foregoing,
once any person or group becomes an Acquiring Person, all Rights that are or
were beneficially owned by any such Acquiring Person will be null and void.
For example, at an exercise price of $55.00 per Right, each Right not
owned by an Acquiring Person would entitle its holder to purchase $110.00 worth
of Common Stock for $55.00. Assuming that the Common Stock had a per share value
of $27.50 on the date upon which such person or group became an Acquiring
Person, the holder of each valid right would be entitled to purchase four (4)
shares of Common Stock for $55.00.
Exercise of Rights for Shares of the Acquiring Company ("Flip-Over" Provision)
In the event that, following the Distribution Date, (i) the Company is
acquired in a merger or other business combination transaction in which the
Company is not the surviving corporation, or (ii) 50% or more of the Company's
consolidated assets or earning power is sold or transferred, then each holder of
a Right (except Rights which previously have been voided as set forth in the
preceding paragraph) shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two times the
Purchase Price of the Right.
Adjustments to Purchase Price
The Purchase Price payable, and the number of Preferred Shares (or
Common Shares) issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Preferred Shares, (ii)
upon the grant to holders of the Preferred Shares of certain rights or warrants
to subscribe for pr purchase Preferred Shares or convertible securities at less
than the current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above).
C-2
With certain exceptions, no adjustment in the Purchase Price will be
required until the time at which cumulative adjustments require an adjustment of
at least 1% in such Purchase Price. No fractional Preferred Shares will be
issued (other than fractional shares which are integral multiples of one
one-thousandth of a Preferred Share) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time after any person or group becomes an Acquiring Person, the
Board of Directors may cause the Company to exchange the Rights (other than
Rights owned by the Acquiring Person which shall have become void), in whole or
in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
At any time prior to the earlier of (i) the close of business on the
tenth calendar day following the Shares Acquisition Date (or if the Shares
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth day following the Record Date) or (ii) the Final
Expiration Date, the Board of Directors of the Company may cause the Company to
redeem the Rights in whole, but not in part, at a price of $.0l per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, the Company shall make announcement
thereof, and upon such action, 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 or exchanged, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
Amendment
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of one one-thousandth percent (.001%) and the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially owned by
any person or group (other than Acquiring Persons) and (ii) ten percent (10%),
except that from and after such time as any person or group becomes an Acquiring
Person no such amendment may adversely affect the interest of the holders of the
Rights.
Other
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
March 31, 1999. 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 hereby incorporated herein by reference.
C-3
