AMENDED AND RESTATED RIGHTS AGREEMENT
dated as of
May 7, 2003
between
XXXXXX & XXXXX CORPORATION, as Issuer
and
EQUISERVE TRUST COMPANY , N.A.
as Rights Agent
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT........................................................................................5
SECTION 3. ISSUE OF RIGHT CERTIFICATES........................................................................................5
SECTION 4. FORM OF RIGHT CERTIFICATES.........................................................................................6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION..................................................................................7
SECTION 6. TRANSFER AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES...............7
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS......................................................7
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.................................................................9
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK......................................................................9
SECTION 10. PREFERRED STOCK RECORD DATE......................................................................................10
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS......................................10
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.......................................................16
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.............................................16
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..........................................................................17
SECTION 15. RIGHTS OF ACTION.................................................................................................19
SECTION 16. AGREEMENT OF RIGHT HOLDERS.......................................................................................19
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER................................................................19
SECTION 18. CONCERNING THE RIGHTS AGENT......................................................................................20
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT........................................................20
SECTION 20. DUTIES OF RIGHTS AGENT...........................................................................................21
SECTION 21. CHANGE OF RIGHTS AGENT...........................................................................................22
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES...............................................................................23
SECTION 23. REDEMPTION.......................................................................................................23
SECTION 24. EXCHANGE.........................................................................................................24
SECTION 25. NOTICE OF PROPOSED ACTIONS.......................................................................................25
SECTION 26. NOTICES..........................................................................................................26
SECTION 27. SUPPLEMENTS AND AMENDMENTS.......................................................................................26
SECTION 28. SUCCESSORS.......................................................................................................26
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC........................................................26
SECTION 30. BENEFITS OF THIS AGREEMENT.......................................................................................27
SECTION 31. SEVERABILITY.....................................................................................................27
SECTION 32. GOVERNING LAW....................................................................................................27
SECTION 33. COUNTERPARTS.....................................................................................................27
SECTION 34. DESCRIPTIVE HEADINGS.............................................................................................27
Exhibit A - Form of Certificate of Designation of Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the Amended and Restated Shareholder Rights
Plan
AMENDED AND RESTATED
RIGHTS AGREEMENT
AMENDED AND RESTATED
RIGHTS AGREEMENT dated as of May 7, 2003, between
Xxxxxx & Xxxxx Corporation, a Tennessee corporation (the "Company"), and
EquiServe Trust Company, N.A., as Rights Agent (the "Rights Agent").
WITNESSETH
WHEREAS, the Company and the Rights Agent entered into a
Rights
Agreement dated as of December 3, 1997 (the "Original
Rights Agreement"),
whereby the Board of Directors of the Company authorized and declared a dividend
of one preferred stock purchase right (a "Right") for each share of Common Stock
(as hereinafter defined) outstanding at the close of business on December 15,
1997 (the "Record Date") and has authorized the issuance, upon the terms and
subject to the conditions hereinafter set forth, of one Right in respect of each
share of Common Stock issued after the Record Date, each Right representing the
right to purchase, upon the terms and subject to the conditions hereinafter set
forth, one two-hundredth of a share of Preferred Stock (as hereinafter defined);
WHEREAS, on September 6, 2000, the parties entered into Amendment No. 1
to the Original
Rights Agreement (together with the Original
Rights Agreement,
the "Amended
Rights Agreement"), whereby the parties, among other things,
extended the term of the Original
Rights Agreement until December 15, 2003; and
WHEREAS, the parties wish to amend and restate the Amended
Rights
Agreement in its entirety, effective as of the date set forth in the forepart
hereof.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ACQUIRING PERSON" means any Person who, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include the Company,
any of its Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company or
any of its Subsidiaries for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as a
result of the acquisition of shares of Common Stock then outstanding by the
Company which, by reducing the number of shares of Common Stock then
outstanding, increases the proportional number of shares Beneficially Owned by
such Person, together with all Affiliates and Associates of such Person, to 15%
or more of the shares of Common Stock then outstanding; PROVIDED, however, that
if a Person shall become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional shares of Common Stock (other than any shares of Common Stock
issued by the Company to all holders of any class or series of capital stock of
the Company by way of dividend, stock split, rights offering, reclassification
or similar transaction), then such Person shall be deemed to be an "Acquiring
Person". Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this paragraph, has
become such inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person", as defined pursuant to the foregoing provisions of
this paragraph, then such Person shall not be deemed to be an "Acquiring Person"
for any purposes of this Agreement.
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"AFFILIATE" and "ASSOCIATE" have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act as in effect on the date hereof.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be deemed
to beneficially own, any securities:
(a) which such Person or any of its Affiliates or Associates, directly
or indirectly, beneficially owns (as determined pursuant to Rule 13d-3 under the
Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates, directly
or indirectly, has
(i) the right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or otherwise (other than
pursuant to the Rights); PROVIDED that a Person shall not be deemed the
"Beneficial Owner" of or to beneficially own securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of its Affiliates or Associates until such tendered
securities are accepted for payment or exchange; or
(ii) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or otherwise; PROVIDED that a
Person shall not be deemed the "Beneficial Owner" of or to beneficially
own any security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding (A) arises solely from a revocable proxy
or consent given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person or any of
its Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in subparagraph (b)(ii)
immediately above) or disposing of any such securities.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of
New York are authorized or obligated
by law or executive order to close.
"CLOSE OF BUSINESS" on any given date means 5:00 p.m.,
New York City
time, on such date; PROVIDED that if such date is not a Business Day "close of
business" means 5:00 p.m.,
New York City time, on the next succeeding Business
Day.
"COMMON STOCK" means the Common Stock, $0.10 par value per share, of
the Company, except that, when used with reference to any Person other than the
Company, Common Stock means the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.
"DISTRIBUTION DATE" means the earlier of (a) the close of business on
the tenth day (or such later day as may be designated by action of the Board of
Directors of the Company) after the Stock Acquisition Date and (b) the close of
business on the tenth Business Day (or such later day as may be designated by
action of the Board of Directors of the Company) after the date of the
commencement of a
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tender or exchange offer by any Person if, upon consummation thereof, such
Person would be an Acquiring Person (other than a Qualifying Offer).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXPIRATION DATE" means the earlier of (a) the Final Expiration Date
and (b) the time at which all Rights are redeemed as provided in Section 23 or
exchanged as provided in Section 24.
"FINAL EXPIRATION DATE" means the close of business on December 15,
2006.
"PERSON" means an individual, corporation, partnership, association,
trust or any other entity or organization.
"PREFERRED STOCK" means the Series A Participating Cumulative Preferred
Stock, no par value per share, of the Company, having the terms set forth in the
form of certificate of designation attached hereto as Exhibit A.
"PURCHASE PRICE" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one two-hundredth of a share
of Preferred Stock (subject to adjustment as provided herein) upon exercise\ of
a Right, which price shall initially be $100."
"QUALIFYING OFFER" means:
(a) an all-cash tender offer for all outstanding shares of Common Stock
then outstanding, PROVIDED that the Person or "group" (within the meaning of
Rule 13d-5 promulgated under the Exchange Act) of Persons making the tender
offer must, prior to or upon commencing such offer, provide the Company with
firm written commitments from responsible financial institutions, which have
been accepted by such Person or group, to provide (subject only to customary
terms and conditions, which shall in no event include conditions requiring
access by such financial institutions to non-public information to be provided
by the Company, conditions based on the accuracy of any information concerning
the Company other than such as would be the subject of representations and
warranties in a public financing by the Company or conditions requiring the
Company to make any representations, warranties or covenants in connection with
such financing) funds for such offer which, when added to the amount of cash and
cash equivalents which such Person or group then has available and has
irrevocably committed in writing to the Company to utilize for purposes of the
offer if consummated, will be sufficient to pay for all shares of Common Stock
then outstanding on a fully diluted basis and all related expenses; or
(b) an exchange offer for all outstanding shares of Common Stock then
outstanding, PROVIDED that the consideration offered in such exchange offer is
(x) freely tradeable common stock (of the class carrying the principal voting
rights of the issuer) of the Person or group making such offer that is approved
for listing or quotation upon notice of issuance on the
New York Stock Exchange
or The Nasdaq Stock Market and the issuer of such common stock is eligible to
register its securities for primary sales on Form S-3 under the Securities Act
or (y) a combination of common stock meeting the requirements of clause (x) of
this sentence and cash meeting the requirements of the proviso of clause (a)
above.
Such offer must also meet all of the following additional conditions:
(i) the offer must include a non-waivable condition that
such Person or group must own, after consummating
such offer, at least two-thirds of the shares of
Common Stock then outstanding;
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(ii) the offer must initially remain open for at least
sixty (60) Business Days and must be extended for at
least ten (10) Business Days after the Special
Meeting;
(iii) the offer must be extended for at least twenty (20)
Business Days after the last increase in the price
offered by such Person or group and after any bona
fide higher alternative offer is made;
(iv) the offer shall be subject only to customary terms
and conditions, which shall in no event include
satisfaction of any conditions relating to (x) the
business, financial condition, results of operations
or prospects of the Company, other than such as are
based on information publicly disclosed by the
Company, or (y) approval of the offeror's
shareholders; and
(v) prior to or upon commencing such offer, such Person
or group must irrevocably commit in writing to the
Company and in the offer to purchase relating to the
offer:
a. to consummate promptly upon completion of
the offer a transaction whereby all shares
of Common Stock then outstanding and not
tendered into the offer will be acquired at
the same price per share and for the same
consideration paid pursuant to the offer,
and otherwise not to purchase any shares of
Common Stock following completion of the
offer,
b. that such Person or group will not
materially amend such offer, except to
increase the price offered, and
c. that such Person or group will not make any
offer for any equity securities of the
Company for six months after commencement of
the original offer if the original offer
does not result in the tender of the number
of shares required to be purchased pursuant
to subsection (i) above, unless another
Qualifying Offer with a per share offer
price at least ten percent (10%) higher than
the last price offered by the Person or
group making the original offer is commenced
by another Person or Persons not Affiliated
or Associated with, acting in concert with,
or instigated or financed by, the Person or
group making the original offer or with whom
the Person or group making the original
offer has any agreement, arrangement or
understanding relating to the Company or any
assets or securities of it or any of its
subsidiaries.
"SECTION 11(a)(ii) EVENT" means any event described in the first clause
of Section 11(a)(ii).
"SECTION 13 EVENT" means any event described in clauses (x), (y) or (z)
of Section 13(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL MEETING" shall have the meaning ascribed to it in Section
23(a)(ii).
"STOCK ACQUISITION DATE" means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.
"SUBSIDIARY" of any Person means any other Person of which securities
or other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of
4
directors or other Persons performing similar functions are at the time directly
or indirectly owned by such first Person.
"TRADING DAY" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day.
"TRIGGERING EVENT" means any Section 11(a)(ii) Event or any Section 13
Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights 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 prior written notice
to the Rights Agent. The Rights Agent shall have no duty to supervise and in no
event be liable for the acts or omissions of any such Co-Rights Agents. If the
Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Prior to the Distribution
Date,(i) the Rights will be evidenced by the certificates for the Common Stock
and not by separate Right Certificates (as hereinafter defined) and the
registered holders of the Common Stock shall be deemed to be the registered
holders of the associated Rights, and (ii) the Rights will be transferable only
in connection with the transfer of the underlying shares of Common Stock. As
soon as practicable after the Record Date, the Company will send a summary of
the Rights substantially in the form of Exhibit C hereto, by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Record Date at the address of such holder shown on the
records of the Company.
(b) As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the Rights Agent will send, by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more Right Certificates
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. If an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p), the Company shall, at the
time of distribution of the Right Certificates, make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)) so that
Right Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. From and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued after the Record Date but prior to
the earlier of the Distribution Date and the Expiration Date. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (i) shall, with
respect to shares of Common Stock so issued or sold (x) pursuant to the exercise
of stock options or under any employee plan or arrangement or (y) upon the
exercise, conversion or exchange of other securities issued by the Company prior
to the Distribution Date and (ii) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; PROVIDED that no such Right Certificate shall be issued if, and to the
extent that, (i) the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued or (ii)
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
5
(d) Certificates for the Common Stock issued after the effective date
of this Agreement but prior to the earlier of the Distribution Date and the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
THIS CERTIFICATE ALSO EVIDENCES CERTAIN RIGHTS AS SET FORTH IN THE
AMENDED AND RESTATED RIGHTS AGREEMENT BETWEEN XXXXXX & XXXXX
CORPORATION AND FIRST CHICAGO TRUST COMPANY DATED AS MAY 7, 2003 (THE
"AMENDED AND RESTATED 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. THE COMPANY WILL MAIL TO
THE HOLDER OF THIS CERTIFICATE A COPY OF THE AMENDED AND RESTATED
RIGHTS AGREEMENT WITHOUT CHARGE PROMPTLY AFTER RECEIPT OF A WRITTEN
REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
AMENDED AND RESTATED RIGHTS AGREEMENT, SUCH RIGHTS MAY BE EVIDENCED BY
SEPARATE CERTIFICATES AND NO LONGER BE EVIDENCED BY THIS CERTIFICATE,
MAY BE REDEEMED OR EXCHANGED OR MAY EXPIRE. AS SET FORTH IN THE AMENDED
AND RESTATED RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON
WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The certificates evidencing
the Rights (and the forms of assignment, election to purchase and certificates
to be printed on the reverse thereof) (the "Right Certificates") shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. The Right Certificates, whenever distributed, shall be dated as of the
Record Date
(b) Any Right Certificate representing Rights beneficially owned by any
an Person referred to in clauses 7(d)(i), 7(d)(ii) or 7(d)(iii) shall (to the
extent feasible) contain the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT). THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF SUCH
AGREEMENT.
6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by its President and
Chief Executive Officer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company whose
manual or facsimile signature is affixed to 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 may,
nevertheless, be countersigned by the Rights Agent and issued and delivered with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company. 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, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the place for
surrender of Right Certificates upon exercise, transfer or exchange, books for
registration and transfer of the Right Certificates. Such books shall show with
respect to each Right Certificate the name and address of the registered holder
thereof, the number of Rights indicated on the certificate and the certificate
number.
SECTION 6. TRANSFER AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a) At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth below
in this Section 6(a), be transferred or exchanged for another Right Certificate
or Certificates evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or exchange
any Right Certificate or Certificates shall surrender such Right Certificate or
Certificates (with, in the case of a transfer, the form of assignment and
certificate on the reverse side thereof duly executed) to the Rights Agent at
the principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Certificates until the registered holder of the Rights has
complied with the requirements of Section 7(e). Upon satisfaction of the
foregoing requirements, the Rights Agent shall, subject to Sections 4(b), 7(d),
14 and 24, countersign and deliver to the Person entitled thereto a Right
Certificate or Certificates as so requested. The Company may require payment of
a sum sufficient to cover any transfer tax or other governmental charge that may
be imposed in connection with any transfer or exchange of any Right Certificate
or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, 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 issue and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d) and 7(e), 9(c), 11(a) and 24) in whole or in part at
7
any time after the Distribution Date and prior to the Expiration Date upon
surrender of the Right Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of America
by certified check or bank draft payable to the order of the Company) of the
aggregate Purchase Price with respect to the Rights then to be exercised and an
amount equal to any applicable transfer tax or other governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and subject
to Section 20(k), the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Stock (or make available, if the Rights
Agent is the transfer agent therefor) certificates for the total number of one
two-hundredths of a share of Preferred Stock to be purchased (and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests) or (B) if the Company shall have elected to deposit the shares of
Preferred Stock issuable upon exercise of the Rights with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one two-hundredths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of issuance of fractional shares in accordance with Section
14 and (iii) after receipt of such certificates or depositary receipts and cash,
if any, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate (with such certificates or receipts registered
in such name or names as may be designated by such holder). If the Company is
obligated to deliver Common Stock, other securities or assets pursuant to this
Agreement, the Company will make all arrangements necessary so that such other
securities and assets are available for delivery by the Rights Agent, if and
when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and 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, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person,(ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or of any Associate
or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or any
such Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or in any such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or any such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(d) shall become null and void without any
further action, and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(d) and Section 4(b) 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 and Associates or any transferee of any of them
hereunder.
8
(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 pursuant to Section 6 or exercise pursuant to this Section 7 unless
such registered holder (i) shall have completed and signed the certificate
contained in the form of assignment or election to purchase, as the case may be,
set forth on the reverse side of the Right Certificate surrendered for such
transfer or exercise, as the case may be, (ii) shall not have indicated an
affirmative response to clause 1 or 2 thereof and (iii) shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall cancel,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the exercise
in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of Rights
may be listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for such issuance to be listed on any such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act with respect
to the securities issuable upon exercise of the Rights,(ii) to cause such
registration statement to become effective as soon as practicable after such
filing and (iii) to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities and (B) the Expiration Date. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or blue sky laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause 9(c)(i), the exercisability of
the Rights in order to prepare and file such registration statement and permit
it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable for securities in
any jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such securities shall
not have been declared effective.
9
(d) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all one two-hundredths of a share of
Preferred Stock issuable upon exercise of Rights shall, at the time of delivery
of the certificates for such securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and other governmental
charges which may be payable in respect of the issuance or delivery of the Right
Certificates and of any certificates for Preferred Stock upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax or
other governmental charge which may be payable in respect of any transfer
involved in the issuance or delivery of any Right Certificates or of any
certificates for Preferred Stock to a Person other than the registered holder of
the applicable Right Certificate, and prior to any such transfer, issuance or
delivery any such tax or other governmental charge shall have been paid by the
holder of such Right Certificate or it shall have been established to the
Company's satisfaction that no such tax or other governmental charge is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person (other than the
Company) 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 such 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 transfer taxes
or other governmental charges) was made; PROVIDED that if the date of such
surrender and payment is a date upon which the transfer books of the Company
relating to the Preferred Stock 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 applicable 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
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. (a) (i) If the Company shall at any time after the date of
this Agreement (A) pay a dividend on the Preferred Stock payable in shares of
Preferred Stock,(B) subdivide the outstanding Preferred Stock into a greater
number of shares,(C) combine the outstanding Preferred Stock into a smaller
number of shares 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 involving the Company), the Purchase
Price in effect immediately prior to the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or other capital stock issuable on
such date shall be proportionately adjusted so that each holder of a Right shall
(except as otherwise provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the Purchase Price in effect
immediately prior to such date, the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time when the
applicable transfer books of the Company were open, such holder would have been
entitled to receive upon such exercise and by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which requires
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement, become
an Acquiring Person, then proper provision shall promptly be made so
that each holder of a Right shall (except as otherwise provided herein,
including Section
10
7(d)) thereafter be entitled to receive, upon exercise thereof at the
Purchase Price in effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event, in lieu of Preferred Stock, such number of
duly authorized, validly issued, fully paid and nonassessable shares of
Common Stock of the Company (such shares being referred to herein as
the "Adjustment Shares") as shall be equal to the result obtained by
dividing (x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the number of one two-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by (y)
50% of the current market price (determined pursuant to Section
11(d)(i)) per share of Common Stock on the date of such first
occurrence; PROVIDED that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the provisions of
Section 13, then only the provisions of Section 13 shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are
authorized by the Company's charter but not outstanding or reserved for
issuance other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
Purchase Price then in effect, (A)(to the extent available) Common
Stock and then,(B) (to the extent available) other equity securities of
the Company which the Board of Directors of the Company has determined
to be essentially equivalent to shares of Common Stock in respect to
dividend, liquidation and voting rights (such securities being referred
to herein as "common stock equivalents") and then, if necessary,(C)
other equity or debt securities of the Company, cash or other assets, a
reduction in the Purchase Price or any combination of the foregoing,
having an aggregate value (as determined by the Board of Directors of
the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company) equal
to the value of the Adjustment Shares; PROVIDED that (x) the Company
may, and (y) if the Company shall not have made adequate provision as
required above to deliver value within 30 days following the later of
the first occurrence of a Section 11(a)(ii) Event and the first date
that the right to redeem the Rights pursuant to Section 23 shall
expire, then the Company shall be obligated to, deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price,(1) (to the extent available) Common Stock and then (2)
(to the extent available) common stock equivalents and then, if
necessary,(3) other equity or debt securities of the Company, cash or
other assets or any combination of the foregoing, having an aggregate
value (as determined by the Board of Directors of the Company based
upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company) equal to the excess
of the value of the Adjustment Shares over the Purchase Price. If the
Board of Directors of the Company shall determine in good faith that it
is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the 30 day
period set forth above (such period, as it may be extended, being
referred to herein as the "Substitution Period") may be extended to the
extent necessary, but not more than 90 days following the first
occurrence of a Section 11(a)(ii) Event, in order that the Company may
seek shareholder approval for the authorization of such additional
shares. To the extent that the Company determines that some action is
to be taken pursuant to the first or second sentence of this Section
11(a)(iii), the Company (X) shall provide, subject to Section 7(d),
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 to decide the appropriate form and value of any
consideration to be delivered as referred to in such first or second
sentence. If any such suspension occurs, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public
11
announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the current market price per share of Common Stock (as
determined pursuant to Section 11(d)) on the later of the date of the
first occurrence of a Section 11(a)(ii) Event and the first date that
the right to redeem the Rights pursuant to Section 23 shall expire; any
common stock equivalent shall be deemed to have the same value as the
Common Stock on such date; and the value of other securities or assets
shall be determined pursuant to Section 11(d)(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 to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any conversion
or exercise price) less than the current market price (as determined pursuant to
Section 11(d)) per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate price (taking account of any conversion or exercise price) of the
total number of shares of Preferred Stock (and/or equivalent preferred stock) so
to be offered would purchase at such current market price and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock (and/or
equivalent preferred stock) so to be offered. In case such subscription price
may be paid by delivery of consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes. Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and if such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger involving the Company) of
evidences of indebtedness, equity securities other than Preferred Stock, assets
(other than a regular periodic cash dividend out of the earnings or retained
earnings of the Company) or rights, options or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price (as determined pursuant to Section 11(d)) per
share of Preferred Stock on such record date, less the value (as determined
pursuant to Section 11(d)(iii)) of such evidences of indebtedness, equity
securities, assets, rights, options or warrants so to be distributed with
respect to one share of Preferred Stock and the denominator of which shall be
such current market price per share of Preferred Stock. Such adjustment shall be
made successively whenever such a record date is fixed, and if such distribution
is not so made, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to
12
Section 11(a)(iii), the "current market price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the 10 consecutive Trading Days immediately following such
date; and for purposes of computations made pursuant to Section 14, the "current
market price" per share of Common Stock for any Trading Day shall be deemed to
be the closing price per share of Common Stock for such Trading Day; PROVIDED
that if the current market price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities exercisable for or convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"current market price" shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the
New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the
New
York Stock Exchange, on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good faith by the Board
of Directors of the Company shall be used. If the Common Stock is not publicly
held or not so listed or traded, the "current market price" per share means the
fair value per share as determined in good faith by the Board of Directors of
the Company.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in Section
11(d)(i) (other than the last sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in such manner,
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the current market price per
share of Common Stock (as determined pursuant to Section 11(d)(i)
(other than the last sentence thereof)). If neither the Common Stock
nor the Preferred Stock is publicly held or so listed or traded, the
"current market price" per share of the Preferred Stock shall be
determined in the same manner as set forth in the last sentence of
Section 11(d)(i). For all purposes of this Agreement, the "current
market price" of one two-hundredth of a share of Preferred Stock shall
be equal to the "current market price" of one share of Preferred Stock
divided by 200.
(iii) For the purpose of any computation hereunder, the value
of any securities or assets other than Common Stock or Preferred Stock
shall be the fair value as determined in good faith by the Board of
Directors of the Company, which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
13
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled to
receive upon exercise of such Right any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(m),
and the provisions of Sections 7, 9, 10, 13 and 14 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 hereunder shall evidence the right to purchase, at the Purchase
Price then in effect, the then applicable number of one two-hundredths of a
share of Preferred Stock and other capital stock of the Company issuable 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), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and 11(c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one two-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one two-hundredths of a share for which a
Right was exercisable immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one two-hundredths of a share of Preferred Stock issuable 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 two-hundredths of a
share of Preferred Stock for which such Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, 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,
14
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one two-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 per two one-hundredth of a share and
the number of shares which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value, if any, of the number of one
two-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one two-hundredths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one two-hundredths of a share of Preferred Stock or other capital
stock of the Company, if any, issuable upon such exercise over and above the
number of one two-hundredths of a share of Preferred Stock or other capital
stock of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED 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 Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exercisable for Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its Preferred Stock, shall not
be taxable to such shareholders.
(n) The Company covenants and agrees that it will not at any time after
the Distribution Date (i) consolidate, merge or otherwise combine with or (ii)
sell or otherwise transfer (and/or permit any of its Subsidiaries to sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries, taken as a whole, to any other Person or
Persons if (x) at the time of or immediately after such consolidation, merger,
combination or sale there are any rights, warrants or other instruments or
securities outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, combination or sale, the shareholders of a Person
who constitutes, or would constitute, the "Principal Party" for the purposes of
Section 13 shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution Date,
it will not, except as permitted by Sections 23, 24 and 27, 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
15
(p) Notwithstanding anything in this Agreement to the contrary, if at
any time after the date hereof and prior to the Distribution Date the Company
shall (i) pay a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock,(ii) subdivide the outstanding Common Stock into a larger
number of shares or (iii) combine the outstanding Common Stock into a smaller
number of shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter as contemplated by
Section 3(c), 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.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,(b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Stock and
the Common Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in the manner
set forth in Section 26. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) If, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the continuing or
surviving corporation of such consolidation, merger or combination, (y) any
Person shall merge into, or otherwise combine with, the Company, and the Company
shall be the continuing or surviving corporation of such merger or combination
and, in connection with such merger or combination, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for other
stock or securities of the Company or any other Person, cash or any other
property, or (z) the Company or one or more of its Subsidiaries shall sell or
otherwise transfer, in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries, taken as a whole, to any other Person or
Persons, then, and in each such case, proper provision shall promptly be made so
that (i) each holder of a Right shall thereafter be entitled to receive, upon
exercise thereof at the Purchase Price in effect immediately prior to the first
occurrence of any Triggering Event, such number of duly authorized, validly
issued, fully paid and nonassessable shares of freely tradeable Common Stock of
the Principal Party (as hereinafter defined), not subject to any rights of call
or first refusal, liens, encumbrances or other claims, as shall be equal to the
result obtained by dividing (A) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of any Triggering
Event by the number of one two-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such first occurrence (such
product being thereafter referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by (B) 50% of the current market price
(determined pursuant to Section 11(d)(i)) per share of the Common Stock of such
Principal Party on the date of consummation of such consolidation, merger,
combination, sale or transfer; (ii) the Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger,
combination, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party following the
first
16
occurrence of a Section 13 Event; and(iv) such Principal Party shall take such
steps (including the authorization and reservation of a sufficient number of
shares of its Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a)) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights.
(b) "Principal Party" means (i) in the case of any transaction
described in Section 13(a)(x) or (y), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger, consolidation or combination, and if no securities are so issued,
the Person that survives or results from such merger, consolidation or
combination; and (ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction or
transactions; PROVIDED that in any such case,(A) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
Person; and (B)in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which are not outstanding or
otherwise reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section 13(a) and
13(b) and providing that, as soon as practicable after the date of any
consolidation, merger, combination, sale or transfer mentioned in Section 13(a),
the Principal Party will (i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, and will use its best efforts to cause such registration statement (A)
to become effective as soon as practicable after such filing and (B) to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date and (ii) deliver to holders of the
Rights historical financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for registration
on Form 10 under the Exchange Act. The provisions of this Section 13 shall
similarly apply to successive mergers, consolidations, combinations, sales or
other transfers. If any Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
price of a whole Right. For purposes of this Section 14(a), the current market
price of a whole Right shall be the closing price of a Right for the Trading Day
immediately prior to the date on which such fractional Rights would otherwise
have been issuable. The closing price of a Right for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the
New York
17
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, on the principal national securities exchange on which
the Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the current market price of the Rights on such date shall be as
determined in good faith by the Board of Directors of the Company.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are multiples of one two-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 multiples of one two-hundredth of a share of Preferred
Stock). In lieu of any such fractional shares 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 price of one two-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market price of
one two-hundredth of a share of Preferred Stock shall be one two-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised or exchanged
as herein provided an amount in cash equal to the same fraction of the current
market price of a share of Common Stock. For purposes of this Section 14(c), the
current market price of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to Section 11(d)(i)) 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 or her right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 14.
18
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of any certificate representing
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 any certificate
representing Common Stock), may, in his or her own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his or her right
to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and 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 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 principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent may
deem and treat the Person in whose name a Right Certificate (or, prior to the
Distribution Date, a certificate representing shares of Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the certificate representing shares of Common Stock made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(d),
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; PROVIDED that the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. 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 shares of capital stock
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 shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in Section 25), or to receive
19
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the execution or 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, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with the administration of this Agreement or the exercise or performance of its
duties hereunder in reliance upon any Right Certificate or certificate for
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; PROVIDED that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. 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 a 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.
20
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of 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 opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any "Acquiring Person" and the
determination of "current market price") be proved or established by the Company
prior to taking, suffering or omitting to take any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the President and Chief Executive Officer or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
the Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken, 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 only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 7(d)) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Common Stock or Preferred Stock will, when
issued, be duly authorized, validly 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 the
President and Chief Executive Officer or any Vice President or the Secretary or
the Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for
21
any action taken, suffered or omitted to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other Person.
(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 to any holders of Rights resulting from
any such act, default, neglect or misconduct, provided that reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the cases may be, has either not
been completed or indicates an affirmative response to clause 1 or 2 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 and Preferred Stock by registered or certified mail, and,
subsequent to 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 and Preferred Stock by registered or certified mail, and,
subsequent to 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 incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his or her 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) a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, having a
principal office in the State of
New York, which is authorized under such laws
to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a corporation described in clause
21(a). 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
22
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and,
subsequent to 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, 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 form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares of stock
issuable upon exercise of the Rights made in accordance with the provisions of
this Agreement.
SECTION 23. REDEMPTION. The Rights may be redeemed by action of the
Board of Directors of the Company pursuant to subsection (a)(i) of this Section
23 or by shareholder action pursuant to subsection (a)(ii) of this Section 23
and shall not be redeemed in any other manner.
(a)(i) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Stock Acquisition Date and (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.005 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price").
(ii) In the event the Company, not earlier than ninety (90)
days following the commencement of a Qualifying Offer which has not
been withdrawn or allowed to expire, receives a written notice
complying with the terms of this Section 23(a)(ii) (the "Special
Meeting Notice") from the holder or holders of at least 10% of the
shares of Common Stock then outstanding (other than shares of Common
Stock then outstanding held by the Person or group making such
Qualifying Offer or such Person's or group's Affiliates or Associates)
directing the Board of Directors of the Company to submit to a vote of
shareholders at a special meeting of the shareholders of the Company (a
"Special Meeting") a resolution authorizing the redemption of all, but
not less than all, of the then outstanding Rights at the Redemption
Price (the "Redemption Resolution"), then the Board of Directors of the
Company shall take such actions as are necessary or desirable to cause
the Redemption Resolution to be so submitted to a vote of shareholders,
including by including a proposal relating to adoption of the
Redemption Resolution in the proxy materials of the Board of Directors
of the Company relating to the Special Meeting. Any Special Meeting
Notice must be delivered to the Secretary of the Company at the
principal executive offices of the Company and must set forth as to the
shareholder or shareholders making the request and the beneficial owner
or owners, if different, on whose behalf the request is made (i) the
name and address of such shareholder or shareholders, as it appears on
the Company's books, and of such beneficial owner or owners, and (ii)
the class and number of shares of Common Stock which are owned
beneficially and of record by such shareholder or shareholders and such
beneficial owner or owners. Subject to the requirements of applicable
law, the Board of Directors of the Company may take a position in favor
of or opposed to the adoption of the Redemption Resolution, or no
position with respect to the Redemption Resolution, as it deems
appropriate. In the event that the Special Meeting is not held on or
prior to the sixtieth (60th) day following receipt of the Special
Meeting Notice (the "Outside Date") or if, at the Special Meeting, the
holders of sixty-six and two-thirds percent (66 2/3%) of the shares of
Common Stock outstanding as of the record date for the Special Meeting
selected by the Board of Directors of the Company (other than shares of
Common Stock then outstanding held by the Person or group making such
Qualifying Offer or such Person's or group's Affiliates or Associates)
shall vote in favor of the Redemption Resolution and provided that no
Person has
23
become an Acquiring Person prior to the redemption date referred to
below, then all of the Rights shall be deemed redeemed by such failure
to hold the Special Meeting or such shareholder action, as the case may
be, at the Redemption Price, effective as of the Close of Business on
the tenth (10th) Business Day following the Outside Date (if the
Special Meeting is not held on or prior to such date) or the date on
which the results of the vote on the Redemption Resolution at the
Special Meeting are certified as official, as the case may be.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights under Section 23(a)(i), or upon the
effectiveness of the redemption of the Rights pursuant to Section 23(a)(ii), and
without any further action and without any notice, the right to exercise the
Rights will terminate and thereafter the only right of the holders of Rights
shall be to receive the Redemption Price for each Right so held. The Company
shall promptly thereafter give notice of such redemption to the Rights Agent and
the holders of the Rights in the manner set forth in Section 26; PROVIDED that
the failure to give, or any defect in, such notice shall not affect the validity
of such redemption. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in Section 23 or 24, and other
than in connection with the purchase, acquisition or redemption of shares of
Common Stock prior to the Distribution Date.
SECTION 24. EXCHANGE. (a) At any time after any Person becomes an
Acquiring Person, the Board of Directors of the Company may, at its option,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to Section 7(d)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any of its Subsidiaries, any
employee benefit plan of the Company or any of its Subsidiaries or any Person
organized, appointed or established by the Company or any of its Subsidiaries
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company electing to exchange any Rights pursuant to Section 24(a) and without
any further action and without any notice, the right to exercise such Rights
will terminate and thereafter the only right 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 thereafter give notice of such exchange to the Rights Agent and the
holders of the Rights to be exchanged in the manner set forth in Section 26;
PROVIDED that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to Section 7(D)) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the
24
terms thereof, so that each common stock equivalent delivered in lieu of each
share of Common Stock shall have essentially the same dividend, liquidation and
voting rights as one share of Common Stock.
SECTION 25. NOTICE OF PROPOSED ACTIONS. (a) In case the Company shall
propose, at any time after the Distribution Date,(i) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), or (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, or (iii)to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision or combination of outstanding shares of Preferred Stock) or
(iv) to effect any consolidation or merger with any other Person, or to effect
and/or to permit one or more of its Subsidiaries to effect any sale or other
transfer, in one transaction or a series of related transactions, of assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole, to any other Person or Persons,
or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Right, to
the extent feasible and in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of any such
dividend, distribution or offering of rights or warrants, or the date on which
any such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of 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 25(a)(i) or
25(a)(ii) above at least 20 days prior to the record date for determining
holders of the Preferred Stock entitled to participate in such dividend,
distribution or offering, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this section or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior
to the Distribution Date a public filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this Agreement
and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case,(i) the
Company shall as soon as practicable thereafter give to each holder of a Right,
in accordance with Section 26, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii) or 13, as the case may be, and (ii) all references in
Section 25(a) to Preferred Stock shall be deemed thereafter to refer to Common
Stock or other capital stock, as the case may be.
25
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right to or on the
Company shall be sufficiently given or made if sent by first-class mail (postage
prepaid) to the address of the Company indicated on the signature page hereof or
such other address as the Company shall specify in writing to the Rights Agent.
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right to or
on the Rights Agent shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the address of the Rights Agent indicated on the
signature page hereof or such other address as the Rights Agent shall specify in
writing to the Company. Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail (postage prepaid) to the address of such holder
shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock; PROVIDED that the Company
shall not (i) extend the Final Expiration Date or (ii) supplement or amend
Section 23(a)(ii) or the related definitions in a manner which would adversely
affect the interests of the holder of the Rights (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Right Certificates in order (a) to cure any ambiguity, (b) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or (c) to change or supplement the provisions
hereof in any manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). 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, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
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) under the Exchange Act as in effect on
the date of this Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including the
right and power to (i) interpret the provisions of this Agreement and (ii) make
all determinations deemed necessary or advisable for the administration of this
Agreement (including a determination as to whether a Person has become an
Acquiring Person, to redeem or exchange or not to redeem or exchange the Rights,
or to amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of the Rights.
26
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the certificates representing the shares of 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 certificates representing the shares of Common Stock).
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED that, notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of the
Company determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors of the
Company.
SECTION 32. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Tennessee 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, except that the rights and
obligations of the Rights Agent shall be governed by the law of the State of
New
York.
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 one and
the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXX & XXXXX CORPORATION
By:
Name: T. Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
0000 X&X Xxxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Vice President-General Counsel
EQUISERVE TRUST COMPANY, NA.
By: /s/
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Tenders & Exchanges Administration
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
XXXXXX & XXXXX CORPORATION
Pursuant to Section 00-00-000 of the
Tennessee Code Annotated
We, Xxxxx X. Xxxxx, President and Chief Executive Officer, and Xxxx X.
Xxxxx, Vice President-Finance and Treasurer, of Xxxxxx & Xxxxx Corporation, as
Issuer, a corporation organized and existing under the Corporation Law of the
State of Tennessee ("Tennessee Law"), in accordance with the provisions thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Charter of the Corporation, the Board of Directors on December 3, 1997,
adopted the following resolution creating a series of Preferred Stock in the
amount and having the designation, voting powers, preferences and relative,
participating, optional and other special rights and qualifications, limitations
and restrictions thereof as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred Stock" (the
"SERIES A PREFERRED STOCK"), and the number of shares constituting such series
shall be 300,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; PROVIDED that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other
securities issued by the Corporation.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of 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 on March 31, June
30, September 30 and December 31 of each year (each such date being referred to
herein as a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of any share or
fraction of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (i) $1.00 and (ii) subject to the
provision for adjustment hereinafter set forth, 200 times the aggregate per
share amount of all cash dividends or other distributions and 200 times the
aggregate per share amount of all non-cash dividends or other distributions
(other than (A) a dividend payable in shares of Common Stock, no par value per
share, of
the Corporation (the "Common Stock") or (B) a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise)), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. If the
Corporation shall at any time after December 3, 1997 (the "Rights Declaration
Date") pay any dividend on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding shares of Common Stock
(by reclassification or otherwise) 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 2(a)(ii) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph 2(a) above immediately after
it declares a dividend or distribution on the Common Stock (other than as
described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above); PROVIDED that if no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of any share or
fraction of a share of Series A Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is on or before the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue and be cumulative from the date of issue of such shares, or
unless the date of issue 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 on or before such Quarterly Dividend Payment Date, in which case
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on 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 not be more
than 60 days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 200 votes
on all matters submitted to a vote of shareholders of the Corporation. If the
Corporation shall at any time after the Rights Declaration Date pay any dividend
on Common Stock payable in shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) 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.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as a single class on all matters submitted to a vote of
shareholders of the Corporation.
(c) (i) If at any time dividends on any Series A Preferred Stock shall
be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall xxxx the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock and any other series of
Preferred Stock then entitled as a class to elect directors, voting together as
a single class, irrespective of series, shall have the right to elect two
Directors.
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph 3(c)(iii) hereof or at
any annual meeting of shareholders, and thereafter at annual meetings
of shareholders, PROVIDED that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors shall be
exercised unless the holders of 10% in number of shares of Preferred
Stock outstanding shall be present in person or by proxy. The absence
of a quorum of holders of Common Stock shall not affect the exercise by
holders of Preferred Stock of such voting right. At any meeting at
which holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies, if any,
in the Board of Directors as may then exist up to two Directors or, if
such right is exercised at an annual meeting, to elect two Directors.
If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have exercised
their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be
increased or decreased except by vote of the holders of Preferred Stock
as herein provided or pursuant to the rights of any equity securities
ranking senior to or PARI PASSU with the Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than 10% of the total
number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of special meeting of holders of
Preferred Stock, which meeting shall thereupon be called by the
President, a Vice President or the Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which holders of Preferred
Stock are entitled to vote pursuant to this paragraph 3(c)(iii) shall
be given to each holder of record of Preferred Stock by mailing a copy
of such notice to him at his or her last address as the same appears on
the books of the Corporation. Such meeting shall be called for a time
not earlier than 20 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60 days
after such order or request, such meeting may be called on similar
notice by any shareholder or shareholders owning in the aggregate not
less than 10% of the total number of shares of Preferred Stock
outstanding, irrespective of series. Notwithstanding the provisions of
this paragraph 3(c)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed
for the next annual meeting of shareholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue
to be entitled to elect the whole number of Directors until
the holders of Preferred Stock shall have exercised their right to
elect two Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been elected
by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph 3(c)(ii) hereof) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of
stock which elected the Director whose office shall have become vacant.
References in this paragraph 3(c) to Directors elected by the holders
of a particular class of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in the
charter or bylaws irrespective of any increase made pursuant to the
provisions of paragraph 3(c)(ii) hereof (such number being subject,
however, to change thereafter in any manner provided by law or in the
charter or bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining Directors.
(d) The Charter of the Corporation shall not be amended in any manner
(whether by merger or otherwise) so as to adversely affect the powers,
preferences or special rights of the Series A Preferred Stock without the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein, holders of Series A Preferred
Stock shall have no special voting rights, and their consent shall not be
required for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on outstanding shares of Series A Preferred Stock shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such other 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;
(iii) redeem, purchase or otherwise acquire for value any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock; PROVIDED that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of stock of the Corporation ranking junior (as to dividends and
upon dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem, purchase or otherwise acquire for value any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of Series A Preferred Stock
and all such other parity stock upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for value any shares of stock of the
Corporation unless the Corporation could, under paragraph 4(a), purchase or
otherwise acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock without designation as to series 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 as permitted by the Charter or as
otherwise permitted under Tennessee Law.
SECTION 6. LIQUIDATION, DISSOLUTION AND WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not 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 200
times the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such other 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. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of Common
Stock (by reclassification or otherwise) 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 (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 200 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
SECTION 8. NO REDEMPTION. The Series A Preferred Stock shall not be
redeemable.
SECTION 9. RANK. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
SECTION 10. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate as
of the 3rd day of December 1997.
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
President and Chief Executive Officer
/s/ XXXX X. XXXXX
Xxxx X. Xxxxx
Vice President-Finance and Treasurer
Attest:
/s/ XXXXXX X. WAY
Secretary
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
No. R- ____________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF DECEMBER 15, 2006 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE AMENDED AND RESTATED RIGHTS AGREEMENT. AS SET FORTH IN THE AMENDED AND
RESTATED RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS
OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE AMENDED AND RESTATED RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF THE AMENDED AND RESTATED RIGHTS
AGREEMENT.](1)
RIGHT CERTIFICATE
XXXXXX & XXXXX CORPORATION
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Amended and Restated Rights Agreement dated as of
May 7, 2003 (as amended and restated, the "RIGHTS AGREEMENT") between Xxxxxx &
Xxxxx Corporation, a Tennessee corporation (the "COMPANY"), and EquiServe Trust
Company, N.A.(the "RIGHTS AGENT")) to purchase from the Company, at any time
after the Distribution Date and prior to the Expiration Date, ___
two-hundredth[s] of a fully paid, nonassessable share of Series A Participating
Cumulative Preferred Stock (the "PREFERRED STOCK") of the Company at a purchase
price of $100 per one two-hundredth of a share (the "PURCHASE PRICE"), payable
in lawful money of the United States of America, upon surrender of this Right
Certificate, with the form of election to purchase and related certificate duly
executed, and payment of the Purchase Price at an office of the Rights Agent
designated for such purpose.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the
number and kind of shares issuable upon exercise of each Right) and the Purchase
Price set forth above are as of [December 15, 1997], and may have been or in the
future be adjusted as a result of the occurrence of certain events, as more
fully provided in the Rights Agreement.
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(1) If applicable, insert this portion of the legend and delete the
preceding sentence.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee of
an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void, and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights Agent
designated for such purpose and subject to the terms and conditions set forth in
the Rights Agreement, any Rights Certificate or Certificates may be transferred
or exchanged for another Rights Certificate or Certificates evidencing a like
number of Rights as the Rights Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the Stock
Acquisition Date and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of
$.005 per Right; or
(b) at any time after any Person becomes an Acquiring Person
(but before such Person becomes the Beneficial Owner of 50% or more of
the shares of Common Stock then outstanding), exchange all or part of
the then outstanding Rights (other than Rights held by the Acquiring
Person and certain related Persons) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right. If the Rights
shall be exchanged in part, the holder of this Right Certificate shall
be entitled to receive upon surrender hereof another Right Certificate
or Certificates for the number of whole Rights not exchanged.
In addition, the Rights are subject to redemption in certain circumstances by a
vote of the shares of Common Stock following a Qualifying Offer.
No fractional shares of Preferred Stock are required to be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are multiples of one two-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. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Certificates for
the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital stock
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or 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.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
Dated as of , 20
--------- --
XXXXXX & XXXXX CORPORATION
By:
----------------------------------------
Chief Executive Officer
(SEAL)
Attest:
------------------------------------
Secretary
Countersigned:
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
By:
----------------------------------------
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED
-------------------------------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: , 20
-------------- --
--------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1 the Rights evidenced by this Right Certificate ___are ___are not
being assigned by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Amended and Restated Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: 20 -----------------------------------
-------------- -- Signature
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The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: XXXXXX & XXXXX CORPORATION
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase shares of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the name
of and delivered to:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(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 of such Rights shall
be registered in the name of and delivered to:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: 20 -----------------------------------
-------------- -- Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ___are ___are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Amended and Restated Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: 20 -----------------------------------
-------------- -- Signature
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The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT C
XXXXXX & XXXXX CORPORATION
AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN
Summary of Terms
FORM OF SECURITY The Board of Directors has declared a
dividend of one preferred stock purchase
right for each outstanding share of the
Company's Common Stock, payable to
holders of record as of the close of
business on December 15, 1997 (each a
"Right" and collectively, the "Rights")
TRANSFER Prior to the Distribution Date(2), the
Rights will be evidenced by the
certificates for, and will be
transferred with, the Common Stock, and
the registered holders of the Common
Stock will be deemed to be the
registered holders of the Rights.
After the Distribution Date, the Rights
Agent will mail separate certificates
evidencing the Rights to each record
holder of the Common Stock as of the
close of business on the Distribution
Date, and thereafter the Rights will be
transferable separately from the Common
Stock.
EXERCISE Prior to the Distribution Date, the
Rights will not be exercisable.
After the Distribution Date, each Right
will be exercisable to purchase, for
$100 (the "Purchase Price"), one
two-hundredth of a share of Series A
Participating Cumulative Preferred
Stock, no par value per share, of the
Company.
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(2) Distribution Date means the earlier of:
(1) the 10th day after public announcement that any person or group has
become the beneficial owner of 15% or more of the Company's Common
Stock; and
(2) the 10th business day after the date of the commencement of a tender or
exchange offer by any person which would, if consummated, result in
such person becoming the beneficial owner of 15% or more of the
Company's Common Stock, in each case, subject to extension by the Board
of Directors of the Company.
FLIP-IN If any person or group (an "Acquiring
Person") becomes the beneficial owner of
15% or more of the Company's Common
Stock, then each Right (other than
Rights beneficially owned by the
Acquiring Person and certain affiliated
persons) will entitle the holder to
purchase, for the Purchase Price, a
number of shares of the Company's Common
Stock having a market value of twice the
Purchase Price.
FLIP-OVER If, after any person has become an
Acquiring Person, (1) the Company is
involved in a merger or other business
combination in which the Company is not
the surviving corporation or its Common
Stock is exchanged for other securities
or assets or (2) the Company or one or
more of its subsidiaries sell or
otherwise transfer assets or earning
power aggregating more than 50% of the
assets or earning power of the Company
and its subsidiaries, taken as a whole,
then each Right will entitle the holder
to purchase, for the Purchase Price, a
number of shares of common stock of the
other party to such business combination
or sale (or in certain circumstances, an
affiliate) having a market value of
twice the Purchase Price.
EXCHANGE At any time after any person has become
an Acquiring Person (but before any
person becomes the beneficial owner of
50% or more of the Company's Common
Stock), a majority of the Directors not
affiliated with the Acquiring Person may
exchange all or part of the Rights
(other than the Rights beneficially
owned by the Acquiring Person and
certain affiliated persons) for shares
of Common Stock at an exchange ratio of
one share of Common Stock per Right.
REDEMPTION The Board of Directors may, at its
option, at any time prior to the earlier
of (i) the Stock
Acquisition Date(3) and (ii) the Final
Expiration Date (as defined below),
redeem all but not less than all the
then outstanding Rights at a redemption
price of $.005 per Right.
Notwithstanding anything in this
Agreement to the contrary, the Rights
shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event
until such time as the Company's right
of redemption hereunder has expired.
In addition, in the event the Company,
not earlier than ninety (90) days
following the commencement of a
"Qualifying Offer" (as defined below)
which has not been withdrawn or allowed
to expire, receives a written notice
(the "Special Meeting Notice") from the
holder or holders of at least 10% of the
shares of Common Stock then outstanding
(other than shares of Common Stock then
outstanding held by the Person or group
making such Qualifying Offer or such
Person's or group's Affiliates or
Associates) directing the Board of
Directors of the Company to submit to a
vote of shareholders at a special
meeting of the shareholders of the
Company (a "Special Meeting") a
resolution authorizing the redemption of
all, but not less than all, of the then
outstanding Rights at the Redemption
Price (the "Redemption Resolution"),
then the Board of Directors of the
Company shall take such actions as are
necessary or desirable to cause the
Redemption Resolution to be so submitted
to a vote of shareholders, including by
including a proposal relating to
adoption of the Redemption Resolution in
the proxy materials of the Board of
Directors of the Company relating to the
Special Meeting. Any Special Meeting
Notice must be delivered to the
Secretary of the Company at the
principal executive offices of the
Company and must set forth as to the
shareholder or shareholders making the
request and the beneficial owner or
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(3) The "Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under
the Exchange Act (or any comparable or successor report)) by the
Company or an Acquiring Person indicating that an Acquiring Person has
become such.
owners, if different, on whose behalf
the request is made (i) the name and
address of such shareholder or
shareholders, as it appears on the
Company's books, and of such beneficial
owner or owners, and (ii) the class and
number of shares of Common Stock which
are owned beneficially and of record by
such shareholder or shareholders and
such beneficial owner or owners. Subject
to the requirements of applicable law,
the Board of Directors of the Company
may take a position in favor of or
opposed to the adoption of the
Redemption Resolution, or no position
with respect to the Redemption
Resolution, as it deems appropriate. In
the event that the Special Meeting is
not held on or prior to the sixtieth
(60th) day following receipt of the
Special Meeting Notice (the "Outside
Date") or if, at the Special Meeting,
the holders of sixty-six and two-thirds
percent (66 2/3%) of the shares of
Common Stock outstanding as of the
record date for the Special Meeting
selected by the Board of Directors of
the Company (other than shares of Common
Stock then outstanding held by the
Person or group making such Qualifying
Offer or such Person's or group's
Affiliates or Associates) shall vote in
favor of the Redemption Resolution and
provided that no Person has become an
Acquiring Person prior to the redemption
date referred to below, then all of the
Rights shall be deemed redeemed by such
failure to hold the Special Meeting or
such shareholder action, as the case may
be, at the Redemption Price, effective
as of the Close of Business on the tenth
(10th) Business Day following the
Outside Date (if the Special Meeting is
not held on or prior to such date) or
the date on which the results of the
vote on the Redemption Resolution at the
Special Meeting are certified as
official, as the case may be.
QUALIFYING OFFER "Qualifying Offer" means:
(a) an all-cash tender offer for all
outstanding shares of Common Stock then
outstanding, PROVIDED that the person or
"group" (within the meaning of Rule
13d-5
promulgated under the Exchange Act) of
persons making the tender offer must,
prior to or upon commencing such offer,
provide the Company with firm written
commitments from responsible financial
institutions, which have been accepted
by such person or group, to provide
(subject only to customary terms and
conditions, which shall in no event
include conditions requiring access by
such financial institutions to
non-public information to be provided by
the Company, conditions based on the
accuracy of any information concerning
the Company other than such as would be
the subject of representations and
warranties in a public financing by the
Company or conditions requiring the
Company to make any representations,
warranties or covenants in connection
with such financing) funds for such
offer which, when added to the amount of
cash and cash equivalents which such
person or group then has available and
has irrevocably committed in writing to
the Company to utilize for purposes of
the offer if consummated, will be
sufficient to pay for all shares of
Common Stock then outstanding on a fully
diluted basis and all related expenses;
or
(b) an exchange offer for all
outstanding shares of Common Stock then
outstanding, PROVIDED that the
consideration offered in such exchange
offer is (x) freely tradeable common
stock (of the class carrying the
principal voting rights of the issuer)
of the person or group making such offer
that is approved for listing or
quotation upon notice of issuance on the
New York Stock Exchange or The Nasdaq
Stock Market and the issuer of such
common stock is eligible to register its
securities for primary sales on Form S-3
under the Securities Act or (y) a
combination of common stock meeting the
requirements of clause (x) of this
sentence and cash meeting the
requirements of the proviso of clause
(a) above.
Such offer must also meet all of the
following additional conditions:
(i) the offer must include a
non-waivable condition that
such person or group must
own, after consummating
such offer, at least
two-thirds of the shares of
Common Stock then
outstanding;
(ii) the offer must initially
remain open for at least
sixty (60) Business Days
and must be extended for at
least ten (10) Business
Days after the Special
Meeting;
(iii) the offer must be extended
for at least twenty (20)
Business Days after the
last increase in the price
offered by such person or
group and after any bona
fide higher alternative
offer is made;
(iv) the offer shall be subject
only to customary terms and
conditions, which shall in
no event include
satisfaction of any
conditions relating to (x)
the business, financial
condition, results of
operations or prospects of
the Company, other than
such as are based on
information publicly
disclosed by the Company,
or (y) approval of the
offeror's shareholders; and
(v) prior to or upon commencing
such offer, such person or
group must irrevocably
commit in writing to the
Company and in the offer to
purchase relating to the
offer:
a. to consummate promptly
upon completion of the
offer a transaction
whereby all shares of
Common Stock then
outstanding and not
tendered into the offer
will be acquired at
the same price per
share and for the same
consideration paid
pursuant to the offer,
and otherwise not to
purchase any shares of
Common Stock following
completion of the
offer,
b. that such person or
group will not
materially amend such
offer, except to
increase the price
offered, and
c. that such person or
group will not make any
offer for any equity
securities of the
Company for six months
after commencement of
the original offer if
the original offer does
not result in the
tender of the number of
shares required to be
purchased pursuant to
subsection (i) above,
unless another
Qualifying Offer with a
per share offer price
at least ten percent
(10%) higher than the
last price offered by
the person or group
making the original
offer is commenced by
another person or
persons not affiliated
or associated with,
acting in concert with,
or instigated or
financed by, the person
or group making the
original offer or with
whom the person or
group making the
original offer has any
agreement, arrangement
or understanding
relating to the Company
or any assets or
securities of it or any
of its subsidiaries.
EXPIRATION The Rights will expire on December 15,
2006 (the "Final Expiration Date").
AMENDMENTS Prior to the Distribution Date, the
Company and the Rights Agent shall, if
the Company so directs, supplement or
amend any provision of this Agreement
without the approval of any holders of
certificates representing shares of
Common Stock; PROVIDED that the Company
shall not (i) extend the Final
Expiration Date or (ii) supplement or
amend Section 23(a)(ii) or the related
definitions in a manner which would
adversely affect the interests of the
holder of the Rights (other than an
Acquiring Person or an Affiliate or
Associate of an Acquiring Person).
From and after the Distribution Date,
the Company and the Rights Agent shall,
if the Company so directs, supplement or
amend this Agreement without the
approval of any holders of Right
Certificates in order (a) to cure any
ambiguity, (b) to correct or supplement
any provision contained herein which may
be defective or inconsistent with any
other provisions herein or (c) to change
or supplement the provisions hereof in
any manner which the Company may deem
necessary or desirable and which shall
not adversely affect the interests of
the holders of Rights (other than an
Acquiring Person or an Affiliate or
Associate of an Acquiring Person).
VOTING RIGHTS Rights holders have no rights as a
shareholder of the Company, including
the right to vote and to receive
dividends.
ANTIDILUTION PROVISIONS The Rights Agreement includes
antidilution provisions designed to
prevent efforts to diminish the efficacy
of the Rights.
TAXES While the dividend of the Rights will
not be taxable to shareholders or to the
Company, shareholders or the Company
may, depending upon the circumstances,
recognize taxable income in the event
that the Rights become exercisable as
set forth above.
A copy of the Amended and Restated Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to an amendment to a
Registration Statement on Form 8-A. A copy of the Amended and Restated Rights
Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Amended and Restated Rights Agreement.
