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EXHIBIT 1
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STOCKHOLDER RIGHTS AGREEMENT
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LAMALIE ASSOCIATES, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
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Dated as of November 6, 1998
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TABLE OF CONTENTS
Page
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SECTION 1 CERTAIN DEFINITIONS............................................ 1
SECTION 2 APPOINTMENT OF RIGHTS AGENT.................................... 4
SECTION 3 ISSUE OF RIGHT CERTIFICATES.................................... 5
SECTION 4 FORM OF RIGHT CERTIFICATES..................................... 6
SECTION 5 COUNTERSIGNATURE AND REGISTRATION.............................. 7
SECTION 6 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR
STOLEN RIGHT CERTIFICATES...................................... 7
SECTION 7 EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS...................................................... 8
SECTION 8 CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES............. 9
SECTION 9 AVAILABILITY OF SHARES OF PREFERRED STOCK...................... 9
SECTION 10 PREFERRED STOCK RECORD DATE.................................... 11
SECTION 11 ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES
AND NUMBER OF RIGHTS........................................... 11
SECTION 12 CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES...................................................... 18
SECTION 13 CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE
OR TRANSFER OF ASSETS OR EARNINGS POWER........................ 18
SECTION 14 FRACTIONAL RIGHTS AND FRACTIONAL SHARES........................ 22
SECTION 15 RIGHTS OF ACTION............................................... 23
SECTION 16 AGREEMENT OF RIGHT HOLDERS..................................... 23
SECTION 17 RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.............. 24
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SECTION 18 CONCERNING THE RIGHTS AGENT.................................... 24
SECTION 19 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT................................................... 25
SECTION 20 DUTIES OF RIGHTS AGENT......................................... 25
SECTION 21 CHANGE OF RIGHTS AGENT......................................... 27
SECTION 22 ISSUANCE OF NEW RIGHT CERTIFICATES............................. 28
SECTION 23 REDEMPTION..................................................... 28
SECTION 24 EXCHANGE....................................................... 29
SECTION 25 NOTICE OF CERTAIN EVENTS....................................... 30
SECTION 26 NOTICES........................................................ 31
SECTION 27 SUPPLEMENTS AND AMENDMENTS; CERTAIN BOARD ACTIONS.............. 32
SECTION 28 SUCCESSORS..................................................... 33
SECTION 29 BENEFITS OF THIS AGREEMENT..................................... 33
SECTION 30 DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS................................................... 33
SECTION 31 SEVERABILITY................................................... 33
SECTION 32 GOVERNING LAW.................................................. 34
SECTION 33 COUNTERPARTS................................................... 34
SECTION 34 DESCRIPTIVE HEADINGS........................................... 34
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STOCKHOLDER RIGHTS AGREEMENT
THIS STOCKHOLDER RIGHTS AGREEMENT (this "Agreement") is made and entered
into on and effective as of the 6th day of November, 1998 by and between
LAMALIE ASSOCIATES, INC., a Florida corporation (the "Company" or "LAI"), and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability
company (the "Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as defined below) of the Company
outstanding as of the close of business (as defined below) on November 16, 1998
(the "Record Date") each Right representing the right to purchase one-hundredth
(subject to adjustment) of a share of Preferred Stock (as defined below), upon
the terms and subject to the conditions herein set forth, and the Board of
Directors has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each share of Common
Stock that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are defined below); provided, however, that Rights may be issued
with respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final Expiration
Date in accordance with Section 22 hereof.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meaning
indicated:
(a) "Acquiring Person" shall mean any Person who or which shall at any
time be the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include a Person who is at such time an Exempt
Person; provided, however, that if the Board of Directors determines in good
faith that a Person who would otherwise be an Acquiring Person has become such
inadvertently (including, without limitation, because (i) such Person was
unaware that it Beneficially Owned a percentage of the shares of Common Stock
then outstanding that would otherwise cause such Person to be a Acquiring
Person or (ii) such Person was aware of the extent of its Beneficial Ownership
of Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this Stockholder Rights Agreement) and without any
intention of changing or influencing control of the Company, and such Person,
as promptly as practicable after being advised of such determination divested
or divests himself or itself of Beneficial Ownership of 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 or to have become an
Acquiring Person for any purposes of this Agreement. Notwithstanding the
foregoing, no Person shall become an Acquiring Person as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 20% or more of the shares of Common Stock
then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and thereafter become the
Beneficial Owner of any additional shares of Common Stock (other than pursuant
to a dividend or
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distribution paid or made by the Company on the outstanding Common Stock in
shares of Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), then such Person shall be deemed to be an Acquiring Person
unless upon the consummation of the acquisition of such additional shares of
Common Stock such Person does not own 20% or more of the shares of Common Stock
then outstanding. 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 last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), as in effect on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be deemed
to have "Beneficial Ownership" of and shall be deemed to "Beneficially Own" any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to Beneficially Own, directly or indirectly within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, (x)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, (y) securities which such Person
has a right to acquire on the exercise of Rights at any time prior to the time
a Person becomes an Acquiring Person or (z) securities issuable upon exercise
of Rights from and after the time a Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof ("Original Rights") or pursuant to Section 11(i) or Section
11(n) hereof with respect to an adjustment to Original Rights; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security by reason of such agreement, arrangement or
understanding if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
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(iii) which are Beneficially Owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B) hereof) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in the State of Florida 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.
(e) "Close of Business" on any given date shall mean 5:00 P.M., Tampa,
Florida time on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Tampa, Florida time on the next
succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall mean the
common stock, par value $.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, in the case of an unincorporated entity, the equivalent equity
interest) with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Current Per Share Market Price"shall have the meaning set forth in
Section 11(d) hereof.
(h) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(i) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.
(j) "Exempt Person" shall mean (1) the Company, (2) any Subsidiary of the
Company, in each case including, without limitation, in its fiduciary capacity,
(3) any employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity or trustee holding Common Stock for or pursuant to the
terms of any such plan or for the purpose of funding any such plan or funding
other employee benefits for employees of the Company or of any Subsidiary of
the Company or (4) any "holding company" within the meaning of Florida Statutes
Section 607.1145 that, in a merger pursuant to such section, becomes the owner
of all shares of Common Stock issued and outstanding as of immediately prior to
the consummation of such merger.
(k) "Final Expiration Date" shall have the meaning set forth in Section 7
hereof.
(l) "Nasdaq" shall mean The Nasdaq Stock Market, Inc. ("Nasdaq") or any
successor organization.
(m) "New York Stock Exchange" shall mean the New York Stock Exchange,
Inc.
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(n) "Person" shall mean any individual, firm, limited liability company,
corporation or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(o) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the rights and
preferences set forth in the form of Articles of Amendment attached to this
Agreement as Exhibit A.
(p) "Record Date" shall have the meaning set forth in the preamble to
this Agreement.
(q) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(r) "Securities Act" shall mean the Securities Act of 1933, as amended.
(s) "Stock Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include, without
limitation, 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 or
such earlier date as a majority of the Board of Directors shall become aware of
the existence of an Acquiring Person.
(t) "Subsidiary" of any Person shall mean any corporation or other entity
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person, and any corporation or other entity that is otherwise controlled
by such Person.
(u) "Trading Day" shall mean, as to any security, (i) if the security is
listed or admitted to trading on any national securities exchange, any day on
which the principal national securities exchange on which such security is
listed or admitted to trading is open for the transaction of business, or (ii)
if the security is not listed or admitted to trading on any national securities
exchange but is listed or admitted to trading or has prices for such security
quoted on any market or quotation system operated by Nasdaq, any day on which
such market or quotation system is open for the transaction of business, or
(iii) otherwise, a Business Day.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable upon ten
(10) days' prior written notice to the Rights Agent. No co-Rights Agent shall
have any duty to supervise, nor shall any co-Rights Agent have any liability
for or with respect to any act or omission of, any other co-Rights Agent.
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SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
an Exempt Person) of, or of the first public announcement of the intention of
such Person (other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person (other than an
Exempt Person) becoming the Beneficial Owner of shares of Common Stock
aggregating 20% or more of the Common Stock then outstanding (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights), the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof and not by separate Right
Certificates, and (y) the Rights 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, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested and provided with all necessary information, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Stock as of the
close of business on the Distribution Date (other than any Acquiring Person or
any Associate or Affiliate of an Acquiring Person), at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"), evidencing
one Right (subject to adjustment as provided herein) for each share of Common
Stock so held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Stockholder Rights Agreement, in substantially
the form of Exhibit C hereto (the "Summary of Stockholder Rights Agreement"),
by first-class, postage-prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date (other than any Acquiring Person or
any Associate or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of
the holders thereof together with the Summary of Stockholder Rights Agreement.
Until the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Stock outstanding on the Record Date, with or without a copy of the Summary of
Stockholder Rights Agreement, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without limitation,
upon transfer of outstanding Common Stock, disposition of Common Stock out of
treasury stock or issuance or reissuance of Common Stock out of authorized but
unissued shares) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
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This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Stockholder Rights Agreement
between Lamalie Associates, Inc. (the "Company") and ChaseMellon
Shareholder Services, L.L.C. dated as of November 6, 1998 as the
same may be amended from time to time (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 the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any Person who becomes
an Acquiring Person (as defined in the Rights Agreement) and
certain transferees thereof will become null and void and will no
longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this Section 3(c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
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 in
the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (which do not affect the
duties and responsibilities of the Rights Agent) 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, market or quotation system on which
the Rights may from time to time be listed or admitted to trading or on which
prices therefor may be quoted, or to conform to usage. Subject to the
provisions of Sections 11, 13 and 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredths of a
share of Preferred Stock as shall be set forth therein at the price per one
one-hundredth of a share of Preferred Stock set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a share of Preferred
Stock and the Purchase Price shall be subject to adjustment as provided herein.
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SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board of Directors, the President, any of the Vice
Presidents, the Treasurer or the Controller of the Company, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
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 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 Agreement any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
any relevant information, the Rights Agent will keep or cause to be kept, at an
office or agency 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 Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof,
at any time after the Close of Business on the Distribution Date, and prior to
the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates 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-hundredths of a share of Preferred 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
or agency of the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. The Rights Agent shall have
no duty or obligation under this Section unless and until it is satisfied that
all such taxes and/or charges have been paid.
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(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier
of the Redemption Date or the Final Expiration Date, upon receipt by the
Company and the Rights Agent of evidence satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the 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 holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly and properly executed, to the Rights
Agent at the office or agency of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one one-hundredth of a
share of Preferred Stock as to which the Rights are exercised, at any time
which is both after the Distribution Date and prior to the earliest of (i) the
close of business on November 15, 2008 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price shall be initially $50 for each one one-hundredth
of a share of Preferred Stock purchasable upon the exercise of a Right. The
Purchase Price and the number of one one-hundredths of a share of Preferred
Stock or other securities or property to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with Section 7(c) hereof.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of Preferred Stock to be purchased and an amount equal to any
applicable tax or charge required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock certificates for the number of shares of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one one-hundredths
of a share of Preferred Stock as are to be purchased (in which case
certificates for the 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
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such request, (ii) 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, (iii) 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 (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder of
any Right Certificate shall exercise less than all the Rights evidenced thereby,
a new Right Certificate evidencing Rights equivalent to the exercisable Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) properly completed and
signed the certificate contained in the form of assignment or election to
purchase set forth on the reverse side of the Rights Certificate surrendered
for such transfer or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof as the
Company or the Rights Agent 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
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this 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 cancelled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. AVAILABILITY OF SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
or any shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) If at any time, and for so long as, the shares of Preferred Stock
(and, following the time that a Person becomes an Acquiring Person, shares of
Common Stock and other securities) issuable upon
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the exercise of Rights may be listed or admitted to trading or may have prices
therefor quoted on any national securities exchange or any market or quotation
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted to trading or have prices therefor quoted on such
exchange, market or quotation system upon official notice of issuance upon such
exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
shares of Preferred Stock (and following the time that a Person first becomes
an Acquiring Person, shares of Common Stock and other securities) upon the
exercise of Rights, to register and qualify such shares of Preferred Stock (and
following the time that a Person first becomes an Acquiring Person, shares of
Common Stock and other securities) under the Securities Act and any applicable
state securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Final Expiration Date.
The Company may temporarily suspend, for a period of time not to exceed 90
days, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is
no longer in effect (with prompt written notice to the Rights Agent of such
announcement). Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of Rights. The Company shall not, however, be required to pay
any tax or charge which may be payable in respect of any transfer or delivery
of Right Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Stock (or shares of
Common Stock or other securities) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
to issue or deliver any certificates or depositary receipts for Preferred Stock
(or shares of Common Stock or other securities) upon the exercise of any Rights
until any such tax or charge shall have been paid (any such tax or charge being
payable by that holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax or charge is due.
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SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for Preferred 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 represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes or charges) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred 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 transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends or
other distributions, 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 AND
NUMBER OF RIGHTS.
The Purchase Price, the number of shares of Preferred Stock or other
securities or property purchasable upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of Preferred Stock or (D)
issue any shares of its capital 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), the Purchase Price in
effect at the time of the Record Date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock transfer books of the Company were open, the
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.
(ii) Subject to Section 24 hereof, in the event that any Person
becomes an Acquiring Person, then (A) the Purchase Price shall be adjusted to
be the Purchase Price in effect immediately prior to such Person becoming an
Acquiring Person multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
Person becoming an Acquiring Person, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the
right to receive, upon exercise at a price equal to the Purchase Price (as so
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adjusted), in accordance with the terms of this Agreement and in lieu of shares
of Preferred Stock, such number of shares of Common Stock (or at the option of
the Company, such number of one one-hundredths of shares of Preferred Stock) as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (y) 50% of the
then Current Per Share Market Price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date such Person became an Acquiring
Person; provided, however, that the Purchase Price and the number of shares of
Common Stock so receivable upon exercise of a Right shall thereafter be subject
to further adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary, however, from and
after the time (the "Invalidation Time") when any Person first becomes an
Acquiring Person, any Rights that are Beneficially Owned by (x) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (y) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the Invalidation Time or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a transferee
prior to or concurrently with the Invalidation Time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to
any Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of
this Section 11(a)(ii), and subsequent transferees of such Persons, shall be
null and void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 11(a)(ii) 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. From and after
the Invalidation Time, no Right Certificate shall be issued pursuant to Section
3 or Section 6 hereof that represents Rights that are or have become null and
void pursuant to the provisions of this Section 11(a)(ii), and any Right
Certificate delivered to the Rights Agent that represents Rights that are or
have become null and void pursuant to the provisions of this Section 11(a)(ii)
shall be canceled. From and after the occurrence of an event specified in
Section 13(a) hereof, any Rights that theretofore have not been exercised
pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of Common
Stock issuable upon the exercise of Rights in accordance with Section 11(a)(ii)
hereof such number or fractions of shares of Preferred Stock having an
aggregate current market value equal to the Current Per Share Market Price of a
share of Common Stock. In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with Section 11(a)(ii) hereof,
the Board of Directors shall, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party (A)
determine the excess of (1) the value of the shares of Common Stock issuable
upon the exercise of a Right in accordance with Section 11(a)(ii) hereof (the
"Current Value") over (2) the then current Purchase Price multiplied by the
number of one one-hundredths of shares of Preferred Stock for which a Right was
exercisable immediately prior to the time that the Acquiring Person
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became such (such excess, the "Spread"), and (B) with respect to each Right
(other than Rights which have become void pursuant to Section 11(a)(ii)
hereof), make adequate provision to substitute for the shares of Common Stock
issuable in accordance with Section 11(a)(ii) hereof upon exercise of the Right
and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) shares of Preferred Stock or other equity securities of the
Company (including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of preferred stock and shares
or fractions of shares of preferred stock are hereinafter referred to as
"Common Stock Equivalents"), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having a value which, when
added to the value of the shares of Common Stock actually issued upon exercise
of such Right, shall have an aggregate value equal to the Current Value (less
the amount of any reduction in the Purchase Price), where such aggregate value
has been determined by the Board of Directors upon the advice of a nationally
recognized investment banking firm selected in good faith by the Board of
Directors; provided, however, if the Company shall not make adequate provision
to deliver value pursuant to clause (B) above within thirty (30) days following
the date that the Acquiring Person became such (the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, to the extent permitted
by applicable law and any material agreements then in effect to which the
Company is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
date any Person becomes an Acquiring Person, the Board of Directors shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, then, if the Board of Directors so elects, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such thirty (30) day period, as it may be extended, is herein called
the "Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii)
hereof and the last sentence of this Section 11(a)(iii) hereof, that such
action shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such second sentence
and to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect (with prompt written notice
of such announcements to the Rights Agent). For purposes of this Section
11(a)(iii), the value of the shares of Common Stock shall be the Current Per
Share Market Price (as determined pursuant to Section 11(d)(i) hereof) on the
Section 11(a)(ii) Trigger Date and the per share or fractional value of any
"Common Stock Equivalent" shall be deemed to equal the Current Per Share Market
Price of the Common Stock. The Board of Directors may, but shall not be
required to, establish procedures
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to allocate the right to receive shares of Common Stock upon the exercise of
the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(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 shares having the same rights,
privileges and preferences as the Preferred Stock ("Equivalent Preferred
Shares")) or securities convertible into Preferred Stock or Equivalent
Preferred Shares at a price per share of Preferred Stock or Equivalent
Preferred Shares (or having a conversion price per share, if a security
convertible into shares of Preferred Stock or Equivalent Preferred Shares) less
than the then Current Per Share Market Price of the Preferred Stock (determined
pursuant to Section 11(d) hereof) on such Record Date, the Purchase Price to be
in effect after such Record Date shall be determined by multiplying the
Purchase Price in effect immediately prior to such Record Date by a fraction,
the numerator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such Record Date plus the number of
shares of Preferred Stock and Equivalent Preferred Shares which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which shall be the number
of shares of Preferred Stock and Equivalent Preferred Shares outstanding on
such Record Date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent. Shares of
Preferred Stock and Equivalent Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
Record Date is fixed; and in the event that such rights, options or warrants
are not so issued, the Pur chase Price shall be adjusted to be the Purchase
Price which would then be in effect if such Record Date had not been fixed.
(c) In case the Company shall fix a Record Date for the making of a
distribution to all holders of the Preferred 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 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 (determined pursuant to Section 11(d) hereof) on such Record
Date, less the fair market value (as determined in good faith by the Board of
Directors 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 (determined pursuant to Section 11(d) hereof) of the
Preferred
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Stock. Such adjustments shall be made successively whenever such a Record Date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such Record Date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "Current Per Share Market Price" of any security 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
defined below) immediately prior to but not including such date; provided,
however, that in the event that the Current Per Share Market Price of the
security is determined during a period following the announcement by the issuer
of such security of (A) a dividend or distribution on such security payable in
shares of such security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such security, and prior to the
expiration of 30 Trading Days after but not including the ex-dividend date for
such dividend or distribution, or the Record Date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current
market price per share equivalent of such security. The closing price for any
day shall be (X) 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 by (1) the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or (2) if the security is not listed or
admitted to trading on the New York Stock Exchange, 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 (Y) 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, as reported by any market or
quotation system operated by Nasdaq, or (Z) if prices for the security are not
reported by any such market or quotation system, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the security and selected by the Board of Directors.
(ii) For the purpose of any computation hereunder, if the Preferred
Stock is publicly traded, 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) hereof. If the Preferred Stock is not publicly traded but the Common
Stock is publicly traded, 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 deter mined pursuant to Section 11(d)(i) hereof multiplied
by one hundred (appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof). If neither
the Common Stock nor the Preferred Stock is publicly traded, Current Per Share
Market Price shall mean the fair value per share as determined in good faith by
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a
share of Preferred Stock or share of
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Common Stock or other share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than the Preferred
Stock, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof and the provisions of
Sections 7, 9, 10, 13 and 14 hereof 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 shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths 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.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest one
ten- thousandth of a share of Preferred Stock) obtained by (i) multiplying (x)
the number of one one-hundredths of a share covered by a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share 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
one one-hundredths of a share 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 adjustment of the Purchase
Price. The Company shall make a public announcement (with prompt written notice
thereof to the Rights Agent) of its election to adjust the number of Rights,
indicating the Record Date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This Record Date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
may, as
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promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such Record Date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and
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 one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a share of Preferred Stock which were expressed in the
initial Right Certificates issued hereunder.
(k) The Company may 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 or other such
shares at the Purchase Price (including as adjusted from time to time in
accordance with the terms of this Agreement).
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a Record Date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such Record Date of the
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current
market price, issuance wholly for cash or 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 in Section 11(b) hereof, hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision,
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combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of a dividend payable in Common Stock) into a greater
or lesser number of Common Stock, then in any such case, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(o) The Company agrees that, after the earlier of the Distribution Date
or the Stock Acquisition Date, it will not, except as permitted by Sections 23,
24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be afforded by the
Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief reasonably detailed statement of the facts and
computations accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Stock or the Preferred Stock
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25 hereof (if so required
under Section 25 hereof). The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein contained and shall have
no duty with respect to and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR
TRANSFER OF ASSETS OR EARNINGS POWER.
(a) In the event, directly or indirectly, at any time after any Person
has become an Acquiring Person, (i) the Company shall merge with and into any
other Person, (ii) any Person shall consolidate with the Company, or any Person
shall merge with and into the Company and the Company shall be the continuing
or surviving corporation of such merger and, in connection with such merger,
all or part of the Common Stock shall be changed into or exchanged for stock or
other securities of any other Person (or of the Company) or cash or any other
property, (iii) the Company shall effect a statutory share exchange with the
outstanding Common Stock of the Company being exchanged for stock or other
securities of any other Person, or for money or other property, or (iv) 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 (other than
the Company or one or more of its wholly-owned Subsidiaries), then upon the
first occurrence of such
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event, proper provision shall be made so that: (A) each holder of record of a
Right (other than Rights which have become null and void pursuant to Section
11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a share of Preferred Stock for which a Right
was exercisable (whether or not such Right was then exercisable) immediately
prior to the time that any Person first became an Acquiring Person (each as
subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b), 11(c),
11(h), 11(i) and 11(m) hereof), in accordance with the terms of this Agreement
and in lieu of Preferred Stock, such number of validly issued, fully paid and
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the time that any Person first became an Acquiring Person
(as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m) hereof) and (2) dividing that product by 50% of
the then Current Per Share Market Price of the Common Stock of such Principal
Party (determined pursuant to Section 11(d)(i) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; provided that the
Purchase Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
Section 11(f) hereof to reflect any events occurring in respect of such
Principal Party after the date of the such consolidation, merger, sale or
transfer; (B) such Principal Party 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; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party; and (D)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9 hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; provided that, upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price
as provided in this Section 13(a), such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had such
holder, at the time of such transaction, owned the Common Stock of the
Principal Party receivable upon the exercise of a Right pursuant to this
Section 13(a), and such Principal Party shall take such steps (including, but
not limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii) of the
first sentence of Section 13(a) hereof: (A) the Person that is the issuer of
the securities into which the shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
the shares of Common Stock of which have the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, if such Person
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survives said merger, or, if there is more than one such Person, the Person the
shares of Common Stock of which have the greatest aggregate market value of
shares outstanding or (y) if the Person that is the other party to the merger
does not survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in (iii) of the first
sentence in Section 13(a) hereof, the Person that is the issuer of any
securities for which shares of Common Stock of the Company are exchanged, and
if no securities are so exchanged, the Person that is the other party to such
share exchange; and
(iii) in the case of any transaction described in (iv) of the first
sentence in Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the
foregoing clause (b)(i), (b)(ii) or b(iii), if the Common Stock of such Person
is not at such time or has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, then (1) if such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, the term "Principal Party" shall refer to such
other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, and the Common Stocks of all of such persons have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of Common Stock having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2)
above shall apply to each of the owners having an interest in the venture as if
the Person owned by the joint venture was a Subsidiary of both or all of such
joint venturers, and the Principal Party in each such case shall bear the
obligations set forth in this Section 13 in the same ratio as its interest in
such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections
13(a) and (b) hereof shall promptly be performed in accordance with their terms
and that such consolidation, merger, sale or transfer of assets shall not
result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Sections 13(a) and
(b) hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Securities
Act, if necessary, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration statement
to remain
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effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date, and similarly comply with
applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall be listed or admitted to trading on the New York Stock Exchange or
on another national securities exchange, to list or admit to trading (or
continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such other securities
exchange, or, if the Common Stock of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of
the Rights to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to
purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its authorized
securities or in its articles or certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13 hereof,
then, in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time after
a Person first becomes an Acquiring Person enter into any transaction of the
type contemplated by (i) - (iv) of Section 13(a) hereof if (x) at the time of
or immediately after such consolidation, merger, sale, transfer or other
transaction 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, (y)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer of other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (z) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights.
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SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights (except prior to
the Distribution Date in accordance with Section 11(n) hereof). In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be (W) 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 by (1) the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange, or (2) if the Rights are not listed or admitted to trading on the New
York Stock Exchange, 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 (X) 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, as reported by any market or quotation system operated by Nasdaq, or
(Y) if prices for the Rights are not reported by any such market or quotation
system, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights and selected by the
Board of Directors, or (Z) if no such market maker is making a market in the
Rights, the fair value of the Rights on such date as deter mined in good faith
by the Board of Directors.
(b) The Company shall not be required to issue fractions of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one share of Preferred Stock. For
the purposes of this Section 14(b), the current market value of a share of
Preferred Stock shall be the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to
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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 (as determined in accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting the rights
of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common 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), on his own behalf and for his own benefit, may enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations
of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common 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 or
agency of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(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
Common Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the 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.
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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 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 this Agreement), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the preparation, execution, delivery, amendment and
administration 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 damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense, incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent, for any action
taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom,
directly or indirectly. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its acceptance and administration of this Agreement in
reliance upon any Right Certificate or certificate for the 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, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.
(c) Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, indirect, consequential or incidental 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.
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SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any Person resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any Person succeeding to the shareholder
services 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 Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes only the duties and obligations expressly
imposed by this Agreement (and no implied duties or obligations) 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 advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of, any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
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, suffering or omitting 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 of
Directors, the President, any Vice President, the Treasurer, the Controller or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the
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Rights Agent and the Rights Agent shall incur no liability in respect of any
action taken, suffered or omitted in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or wilful 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 have any liability for or 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 (including the Rights becoming null and void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 and 24 hereof, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 12 hereof, describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Preferred Stock or
other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Chairman of the
Board of Directors, the President, the Chief Financial Officer or the Secretary
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or
suffered or such omission shall be effective. The Rights Agent shall not be
liable or responsible for any action taken or suffered by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which
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date shall not be less than five Business Days after the date any officer of
the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person
or 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 or any other Person
resulting from any such act, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is
not an Acquiring Person (or an Affiliate or Associate thereof), the Rights
Agent shall not take any further action with respect to such requested exercise
or transfer without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and, following the
Distribution Date, to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and, following the
Distribution Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or
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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 Person organized and
doing business under the laws of the United States or any State thereof, which
is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 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
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock or Preferred Stock, and, following the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such forms 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 Common Stock following the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date, the Company may with respect to shares of Common Stock so
issued or sold pursuant to (i) the exercise of stock options, (ii) under any
employee plan or arrangement, (iii) upon the exercise, conversion or exchange
of securities, notes or debentures issued by the Company or (iv) a contractual
obligation of the Company in each case existing prior to the Distribution Date,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale.
SECTION 23. REDEMPTION.
(a) The Board of Directors may, at any time prior to such time as any
Person first becomes an Acquiring Person, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. The Company may, at
its option, pay the Redemption Price in cash, shares of Common Stock (based on
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32
the current market price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(a) hereof (or at such later
time as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice (with prompt
written notice thereof to the Rights Agent), the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. The Company shall promptly give public notice
of any such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common 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 shall state the method by which the payment of the
Redemption Price will be made.
SECTION 24. EXCHANGE.
(a) The Board of Directors may, at its option, at any time after any
Person first becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
not become effective or that have become null and void pursuant to the
provisions of Section 11(a)(ii) 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 amount per Right being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of shares of Common Stock aggregating
50% or more of the shares of Common Stock then outstanding. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 hereof and may not
be exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors ordering the exchange of any Rights pursuant to Section 24(a) hereof
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of 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 public notice (with prompt written notice thereof
to the Rights Agent) of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity
Page 29
33
of such exchange. The Company shall promptly mail a notice of any such exchange
to all of the holders of the Rights so exchanged at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the 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 null and void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) The Company may at its option and, in the event that there shall not
be sufficient shares of Common Stock issued but not outstanding or authorized
but unissued to permit an exchange of Rights as contemplated in accordance with
this Section 24, the Company shall substitute to the extent of such
insufficiency, 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 (or Equivalent Preferred Shares as such term is defined in Section
11(b) hereof) such that the Current Per Share Market Price (determined pursuant
to Section 11(d) hereof) of one share of Preferred Stock (or Equivalent
Preferred Share) multiplied by such number or fraction is equal to the Current
Per Share Market Price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such exchange).
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) 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), (ii) 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, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock), then, in each such case, the Company
shall give to each holder of a Right Certificate and to the Rights Agent, 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 liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of the Common Stock and/or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the Record
Date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.
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(b) In case any event described in Section 11(a)(ii) or Section 13 hereof
shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.
SECTION 26. NOTICES.
Any notice, request, demand or other communication which is required or
may be given under this Agreement by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be in writing and shall be deemed
to have been duly given (1) if transmitted by telecopy, electronic telephone
line facsimile transmission or other similar electronic or digital transmission
method, when transmitted; (2) if sent by a nationally recognized next day
delivery service that obtains a receipt on delivery, the day after it is sent;
(3) if mailed, first class registered or certified United States mail, postage
prepaid, five days after it is sent; and (4) in any other case, when actually
received. In each case, such notice, request, demand or other communication
shall be sent to:
Lamalie Associates, Inc.
0000 Xxxxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
or to such other address as the Company may have specified in writing to the
Rights Agent using the procedures specified above in this Section.
Subject to the provisions of Section 21 hereof, any notice, request,
demand or other communication which is required or may be given under this
Agreement by the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be in writing and shall be deemed to have been duly given
(1) if transmitted by telecopy, electronic telephone line facsimile
transmission or other similar electronic or digital transmission method, when
transmitted; (2) if sent by a nationally recognized next day delivery service
that obtains a receipt on delivery, the day after it is sent; (3) if mailed,
first class registered or certified United States mail, postage prepaid, five
days after it is sent; and (4) in any other case, when actually received. In
each case, such notice, request, demand or other communication shall be sent
to:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
or to such other address as the Rights Agent may have specified in writing to
the Company using the procedures specified above in this Section.
Page 31
35
Any notice, request, demand or other communication which is required or
may be given under this Agreement by the Company or the Rights Agent to or on
the holder of any Right Certificate shall be in writing and shall be deemed to
have been duly given (1) if transmitted by telecopy, electronic telephone line
facsimile transmission or other similar electronic or digital transmission
method, when transmitted; (2) if sent by a nationally recognized next day
delivery service that obtains a receipt on delivery, the day after it is sent;
(3) if mailed, first class registered or certified United States mail, postage
prepaid, five days after it is sent; and (4) in any other case, when actually
received. In each case, such notice, request, demand or other communication
shall be sent to such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS; CERTAIN BOARD ACTIONS.
(a) Except as otherwise provided in this Section 27, for so long as the
Rights are then redeemable, the Company may in its sole and absolute
discretion, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Agreement in any respect without the approval of
any holders of the Rights. At any time when the Rights are no longer
redeemable, except as otherwise provided in this Section 27, the Company may,
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
to (i) cure any ambiguity, (ii) correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) shorten or lengthen any time period hereunder, or (iv) change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable; provided that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such amendment may cause the rights again to become redeemable or cause the
Agreement again to become amendable other than in accordance with this
sentence. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which decreases the Redemption Price.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 27 and, if requested by the Rights Agent, an opinion
of counsel, the Rights Agent shall execute such supplement or amendment;
provided, however, that, anything to the contrary notwithstanding, the Rights
Agent shall not be obligated to enter into any amendment or supplement that
change or increases the Rights Agent's duties, liabilities or obligations.
(b) Notwithstanding anything to the contrary, no action by the Board of
Directors consenting to, approving, authorizing or directing any (1)
supplement, amendment or change to this Agreement, (2) redemption,
cancellation, purchase or acquisition of, or payment, exchange, grant, issuance
or delivery of any consideration for, any Rights, (3) suspension, cancellation,
termination, rescission, revocation or waiver of this Agreement or any
provision of this Agreement or (4) any similar action shall be effective unless
(a) there are "Disinterested Directors" (as that term is defined below) then in
office and (b) such action receives the approval by affirmative vote of a
majority of such Disinterested Directors. For the purposes of this paragraph,
"Disinterested Director" shall mean a member of the Board of Directors of the
Company who is not an Acquiring Person or Section
Page 32
36
"3(a)(ii) Person" (as that term is defined below), not an Affiliate or
Associate of an Acquiring Person or Section 3(a)(ii) Person, and not a
representative of an Acquiring Person, of a Section 3(a)(ii) Person or of any
such Affiliate or Associate. For the purposes of this paragraph, "Section
3(a)(ii) Person" shall mean a Person who has commenced or participated in the
commencement of, or with respect to whom there has been a public announcement
of an intention to commence, a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring Person.
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. 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, the Common Stock).
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights. The Rights Agent is
entitled to always assume that the Company's Board of Directors acted in good
faith and in compliance with applicable law, the Company's Articles of
Incorporation and Bylaws as then in effect and this Agreement, and shall be
fully protected and incur no liability in reliance thereon.
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement or
applicable to 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.
Page 33
37
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 Florida 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; provided, however, that all provisions regarding the rights, duties and
obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be preformed 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.
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.
LAMALIE ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Authorized Officer
Page 34
38
EXHIBIT A
FORM
OF
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
LAMALIE ASSOCIATES, INC.
(Pursuant to Section 607.0602 of the
Florida Business Corporation Act)
LAMALIE ASSOCIATES, INC., a corporation organized and existing under the
laws of State of Florida (this "Corporation"), in order to amend its Articles
of Incorporation, in accordance with the requirements of Chapter 607, Florida
Statutes, does hereby certify as follows:
1. The name of this Corporation is LAMALIE ASSOCIATES, INC.
2. The amendment effected hereby was duly adopted by the Board of
Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") on September 29, 1998 pursuant to Section 607.0602, Florida
Statutes, and pursuant to the authority granted to and vested in the Board in
accordance with the provisions of the Company's Articles of Incorporation, as
amended to date (hereinafter called the "Articles of Incorporation"). In
accordance with such Section and the Articles of Incorporation, such amendment
was adopted without approval of the shareholders of this Corporation, which
approval was not and is not required, and shall become effective upon filing
hereof with the Florida Department of State without shareholder action.
3. The Board of Directors has authorized and does hereby creates a series
of Preferred Stock, par value $.01 per share, of the Company and hereby states
the designation and number of shares, and fixes the relative rights, powers and
preferences thereof, and the limitations thereof, as more particularly set
forth below.
4. The Articles of Incorporation are hereby amended by adding to the end
of Section 1(b) of Article IV, after the end of Section 1(b)(ii), a new Section
1(b)(iii) as follows:
* * *
(iii) Series A Junior Participating Preferred Stock. Of the 3,000,000
shares of Preferred Stock authorized by these Articles of Incorporation,
a series of 500,000 of such shares shall be and are authorized and
designated as follows:
(a) Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 500,000. Such number of shares may
be increased or decreased by resolution of the
Exhibit A-1
39
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.
(b) Dividends and Distributions.
(1) Subject to the rights of the holders of any shares of
any series of Preferred Stock of the Company (the "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 $.01 per share, of the Company (the "Common Stock")
and of any other stock of the Company ranking junior to the Series A
Preferred Stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of
January, April, July, and October in each year (each such date being
referred to herein as a "Dividend Payment Date"), commencing on the
first Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and
100 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, declared on the Common Stock since
the immediately preceding Dividend Payment Date or, with respect to
the first Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the
event the Company shall at any time after November 16, 1998 declare
or pay any dividend on the 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 amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of 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.
(2) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in Section 2(a)
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
Exhibit A-2
40
have been declared on the Common Stock during the period between any
Dividend Payment Date and the next subsequent Dividend Payment Date,
a dividend of $1.00 per share on the Series A Preferred Stock shall
nevertheless be payable, when, as and if declared, on such subsequent
Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative,
whether or not earned or declared, on outstanding shares of Series A
Preferred Stock from the 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 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
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 Dividend
Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may
fix a Record Date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which Record Date shall be not more
than 60 days prior to the date fixed for the payment thereof.
(c) Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights;
(1) Subject to the provision for adjustment hereinafter
set forth and except as otherwise provided in the Articles of
Incorporation or required by law, each share of Series A Preferred
Stock shall entitle the holder thereof to 100 votes on all matters
upon which the holders of the Common Stock of the Company are
entitled to vote. In the event the Company shall at any time after
November 16, 1998 declare or pay any dividend on the 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 number of votes per share
to which holders of shares 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.
Exhibit A-3
41
(2) Except as otherwise provided in the Articles of
Incorporation, as hereby or otherwise hereafter amended, and except
as otherwise required by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other capital 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.
(3) Except as set forth herein, or as otherwise provided
by law, holders 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.
(d) Certain Restrictions.
(1) 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 earned or declared, on
shares of Series A Preferred Stock outstanding shall have been paid
in full, the Company shall not:
a. declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (as to
dividends) to the Series A Preferred Stock;
b. declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as to
dividends) 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;
c. redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the 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 (as
to dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock or rights, warrants or options to acquire
such junior stock;
d. redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares
of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except in accordance with a purchase offer made in
Exhibit A-4
42
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.
(2) 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 Section 4(a),
purchase or otherwise acquire such shares at such time and in such
manner.
(e) Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their retirement
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
(f) 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 the Common Stock or of shares of
any other stock of the Company ranking junior, 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 $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not earned 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
hereinafter set forth, equal to 100 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 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, however, that there are not
sufficient assets available to permit payment in full of the Series A
liquidation preference and the liquidation preferences of all other
classes and series of stock of the Company, if any, that rank on a
parity with the Series A Preferred Stock in respect thereof, then the
assets available for such distribution shall be distributed ratably to
the holders of the Series A Preferred Stock and the holders of such
parity shares in the proportion to their respective liquidation
preferences. In the event the Company shall at any time after November
16, 1998 declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding
Exhibit A-5
43
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.
(g) Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are converted into,
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 converted into,
exchanged for or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 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 converted, exchanged or
converted. In the event the Company shall at any time after November
16, 1998 declare or pay any dividend on the 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 amount set forth in the preceding
sentence with respect to the conversion, 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.
(h) No Redemption. The shares of Series A Preferred
Stock shall not be redeemable from any holder.
(i) Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets upon liquidation, dissolution or winding up of the Company,
junior to all other series of Preferred Stock and senior to the
Common Stock.
(j) Amendment. If any proposed amendment to the
Articles of Incorporation (including as amended by these Articles of
Amendment) would alter, change or repeal any of the preferences,
powers or special rights given to the Series A Preferred Stock so as
to affect the Series A Preferred Stock adversely, then the
Exhibit A-6
44
holders of the Series A Preferred Stock shall be entitled to vote
separately as a class upon such amendment, and the affirmative vote
of two-thirds of the outstanding shares of the Series A Preferred
Stock, voting separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as may be required
by the laws of the State of Florida.
(k) 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.
* * *
IN WITNESS WHEREOF, the Chief Executive Officer of this Corporation has
executed these Articles of Amendment of the Articles of Incorporation of
Lamalie Associates, Inc. this 6th day of November, 1998.
LAMALIE ASSOCIATES, INC.
By:
----------------------------------
Exhibit A-7
45
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R- Rights
------- -------
NOT EXERCISABLE AFTER NOVEMBER 15, 2008, OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE STOCKHOLDER
RIGHTS AGREEMENT (THE "RIGHTS AGREEMENT"). UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED
BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
LAMALIE ASSOCIATES, INC.
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 Stockholder Rights Agreement, dated as of November 6, 1998 as the same may
be amended from time to time (the "Rights Agreement"), between Lamalie
Associates, Inc., a Florida corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., a New Jersey limited liability company (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., Tampa, Florida time, on November 15, 2008 at the office or agency
of the Rights Agent designated for such purpose, or of its successor as Rights
Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $.01 per share (the "Preferred
Stock"), of the Company, at a purchase price of $50 per one one-hundredth of a
share of Preferred Stock (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of one one-hundredths of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of November 16, 1998 based on
the Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price, the number of one one-hundredths of a share of
Preferred Stock (or other securities or property) which may be purchased upon
the exercise of the Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 principal executive offices of the
Company and the above-mentioned office or agency of the Rights
Exhibit B-1
46
Agent. The Company will mail to the holder of this Right Certificate a copy of
the Rights Agreement without charge after receipt of a written request
therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for shares of
Preferred Stock or shares of the Company's Common Stock, par value $.01 per
share.
No fractional shares of Preferred Stock or Common Stock will be issued
upon the exercise or exchange of any Right or Rights evidenced hereby (other
than fractions of Preferred Stock which are integral multiples of one
one-hundredth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise or exchange 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 evidenced by this Right
certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
Exhibit B-2
47
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _____________________.
ATTEST: LAMALIE ASSOCIATES, INC.
By: By:
----------------------------------- -----------------------------------
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:
-----------------------------------
Authorized Representative
Exhibit B-3
48
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
transfer unto
-----------------------------------------------------------
(Please print name and address of transferee)
Rights represented by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
________________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated:
-----------------------------------
-----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program
===============================================================================
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by, were not acquired by the undersigned
from, and are not being assigned to, an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-----------------------------------
Signature
===============================================================================
Exhibit B-4
49
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To Lamalie Associates, Inc.:
The undersigned hereby irrevocably elects to exercise ____________________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock (or other securities or property) issuable upon the exercise of such
Rights and requests that certificates for such shares of Preferred Stock (or
such other securities) be issued in the name of:
-----------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivery to:
-----------------------------------------------------------
(Please print name and address)
Please insert social security
or other identifying number:
------------------------------
Dated:
-----------------------------------
-----------------------------------
Signature
(Signature must conform to holder's name as specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.
Exhibit B-5
50
===============================================================================
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
-----------------------------------
Signature
===============================================================================
NOTICE
------
The signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored.
Exhibit B-6
51
EXHIBIT C
SUMMARY OF STOCKHOLDER RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE STOCKHOLDER RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE STOCKHOLDER RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Under and pursuant to the Stockholder Rights Agreement, the Company, by
action of the Board, has created certain preferred stock purchase rights (the
"Rights"). Each Right entitles the registered holder thereof to purchase from
the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred Stock") of the Company
at a price of $50 per one one-hundredth of a share of Preferred Stock (the
"Purchase Price"), subject to adjustment. The Board of Directors of the Company
has declared a dividend of one Right for each outstanding share of common stock,
par value $.01 per share, of the Company (the "Common Stock") payable on
November 16, 1998 (the "Record Date") to the stockholders of record on that
date.
The Stockholder Rights Agreement is designed to protect stockholders of
the Company in the event of unsolicited offers to acquire the Company and other
coercive takeover tactics which, in the opinion of the Board, could impair its
ability to represent stockholder interests. The provisions of the Stockholder
Rights Agreement may render an unsolicited takeover of the Company more
difficult or less likely to occur or might prevent such a takeover, even though
such takeover may offer the Company's stockholders the opportunity to sell their
stock at a price above the prevailing market rate and may be favored by a
majority of the stockholders of the Company.
Under the Stockholder Rights Agreement, until the earlier to occur of (i)
10 days following a public announcement that a person or group of affiliated or
associated persons (with certain exceptions, an Acquiring Person) has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock or
(ii) 10 business days (or such later date as may be determined by action of the
Board of Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 20% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of a Summary
of Stockholder Rights Agreement in the form attached to the Stockholder Rights
Agreement (the "Summary of Stockholder Rights Agreement"). The Stockholder
Rights Agreement generally excludes from the definition of Acquiring Person a
person who inadvertently becomes an Acquiring Person but who promptly takes
action to no longer beneficially own 20% or more of the shares of Common Stock
then outstanding. Certain acquisitions pursuant to dividends, distributions,
stock splits or other transactions are disregarded in determining whether a
person is an Acquiring Person.
The Stockholder Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the
52
Common Stock. Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Stockholder Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for shares of Common Stock outstanding as of the Record Date,
even without such notation or a copy of the Summary of Stockholder Rights
Agreement, will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
(the "Right Certificates") will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 15, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights also is subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 100 times the dividend declared
per share of Common Stock. In the event of liquidation, dissolution or winding
up of the Company, the holders of the Preferred Stock will be entitled to a
minimum preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 100 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
100 votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
converted
Exhibit C-2
53
or exchanged, each share of Preferred Stock will be entitled to receive 100
times the amount received per share of Common Stock. These rights are protected
by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock at or about the time of the Final Expiration
Date.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become null and
void), will thereafter have the right to receive, upon exercise of a Right at
the then current exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of the Right (a
"flip in").
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person, which will have become null and void)
will thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the person with whom the Company has engaged in the foregoing transaction (or
its parent), which number of shares at the time of such transaction will have a
market value of two times the exercise price of the Right (a "flip over").
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock or the occurrence of an event described in
the prior paragraph, the Board of Directors may exchange the Rights (other than
Rights owned by such person or group which will have become null and void), in
whole or in part, at an exchange ratio of one share of Common Stock, or one
one-hundredth of a share of Preferred Stock (or of a share of a class or series
of the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the Board
of Directors may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price").
Exhibit C-3
54
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may, except
with respect to the Redemption Price, amend the Rights in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights in any manner that does not adversely affect
the interests of holders of the Rights.
Until a Right is exercised, 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.
A copy of the Stockholder Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated November 6, 1998, as amended. A copy of the Stockholder Rights
Agreement is available free of charge from the Company. The foregoing summary
does not purport to be complete and is qualified in its entirety by reference to
the complete Stockholder Rights Agreement, as the same may be amended from time
to time, which is hereby incorporated herein by reference.
Exhibit C-4
