Exhibit 4.4
CAPITAL BANCORP, INC.
and
REGISTRAR AND TRANSFER COMPANY
RIGHTS AGREEMENT
Dated as of July 18, 2001
TABLE OF CONTENTS
Section 1. Certain Definitions..................................................................1
Section 2. Appointment of Rights Agent..........................................................6
Section 3. Issue of Right Certificates..........................................................7
Section 4. Form of Right Certificates...........................................................8
Section 5. Countersignature and Registration....................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.............................10
Section 7. Exercise of Rights; Per Right Purchase Price; Full Share Purchase Price;
Expiration Date of Rights...........................................................11
Section 8. Cancellation and Destruction of Right Certificates..................................12
Section 9. Reservation and Availability of Shares of Common Stock..............................12
Section 10. Common Stock Record Date...........................................................14
Section 11. Adjustment of Per Right Purchase Price, Number of Shares or Number of Rights.......14
Section 12. Certificate of Adjusted Per Right Purchase Price or Number of Shares...............21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............21
Section 14. Fractional Rights and Fractional Shares............................................23
Section 15. Rights of Action...................................................................24
Section 16. Agreement of Right Holders.........................................................24
Section 17. Right Certificate Holder Not Deemed a Shareholder..................................25
Section 18. Concerning the Rights Agent........................................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent..........................26
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Section 20. Duties of Rights Agent.............................................................26
Section 21. Change of Rights Agent.............................................................29
Section 22. Issuance of New Right Certificates.................................................29
Section 23. Redemption and Termination.........................................................30
Section 24. Exchange...........................................................................31
Section 25. Notice of Certain Events...........................................................32
Section 26. Notices............................................................................33
Section 27. Supplements and Amendments.........................................................34
Section 28. Successors.........................................................................34
Section 29. Determinations and Actions by the Board of Directors...............................35
Section 30. Benefits of This Agreement.........................................................35
Section 31. Severability.......................................................................36
Section 32. Governing Law......................................................................36
Section 33. Counterparts.......................................................................36
Section 34. Captions, Section Headings, Descriptive Headings...................................36
EXHIBIT A [Form of Right Certificate]...........................................................38
EXHIBIT B SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK............................................43
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated to be effective on July 18, 2001 (the
"Agreement"), between Capital Bancorp, Inc., a Tennessee corporation (the
"Company"), and Registrar and Transfer Company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company on July 18, 2001 (the
"Rights Dividend Declaration Date") authorized and declared a dividend
distribution (the "Distribution") of one Right for each outstanding share of
Common Stock, par value $4.00, of the Company (the "Common Stock") outstanding
at the close of business on July 18, 2001 (the "Record Date") and has authorized
the issuance of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(i) hereof) for each share of Common Stock issued
(whether originally issued or delivered from the Company's treasury stock)
between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right initially
representing the right to purchase, under certain circumstances, one-half of one
share of Common Stock, upon the terms and subject to the conditions hereinafter
set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
(a) "Acquiring Person" means any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of securities constituting a Substantial Block, but shall not (except as set
forth in this Section and in Section 1(mm)) include an Exempt Person, the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity, or any Person organized, appointed or
established by the Company or any Subsidiary of the Company for or pursuant to
the terms of any such plan; (ii) any Person who or which, together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of a
Substantial Block solely as a result of a change in the aggregate number of
shares of Voting Stock outstanding since the last date on which such Person
acquired Beneficial Ownership of any shares of the Voting Stock constituting all
or a portion of such Substantial Block; and (iii) any Person who or which,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of a Substantial Block in the good faith belief that such
acquisition would not (x) cause such Person and its Affiliates and Associates to
become the Beneficial Owner of a Substantial Block and such Person relied in
good faith in computing the percentage of its voting power on publicly filed
reports or documents of the Company which are inaccurate or out-of-date or (y)
otherwise
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cause a Distribution Date or the adjustment provided for in Section 11(a) to
occur. Notwithstanding clause (ii) or (iii) of the immediately preceding
sentence, if any Person is excluded from the definition of "Acquiring Person"
solely due to such clause (ii) or (iii) and such person does not cease to be the
Beneficial Owner of a Substantial Block by the close of business on the fifth
Business Day after notice from the Company (the date of notice being the first
day) that such Person is the Beneficial Owner of a Substantial Block, such
Person shall, at the end of such five Business Day period, become an Acquiring
Person (and such clause (ii) or (iii) shall no longer apply to exclude such
Person from the definition of "Acquiring Person" hereunder). Further, (1) any
Exempt Person who or which, from and after the date hereof, acquires
beneficially or of record additional shares of the Company's Common Stock (other
than by virtue of a dividend paid or payable in shares of the Common Stock of
the Company to all shareholders on a pro rata basis) from the number listed in
Section 1(u) shall, within five Business Days, divest itself of such additional
shares (or an equivalent number of shares) of the Company's Common Stock or it
shall cease to be an Exempt Person; and (2) no Exempt Person shall acquire
beneficial or record ownership of additional shares of the Company's Common
Stock (other than by virtue of a dividend paid or payable in shares of the
Common Stock of the Company to all shareholders on a pro rata basis) unless and
until such time as such acquisition does not cause such Person to own more than
fifteen percent (15%) of the Company's then-outstanding Common Stock. In the
event that a Person (or Associate or Affiliate thereof) named as an Exempt
Person in this Agreement acquires, of record, fifteen percent (15%) or more of
the outstanding shares of the Company's Stock then such Person shall be deemed
to be an Acquiring Person as of the date that shares are registered in the name
of such Person which cause such Person to have such level of ownership. In the
event that a Person (inclusive of such Person's Associates and Affiliates) named
as an Exempt Person in this Agreement acquires, beneficially, any additional
shares of the Company's Stock then such Person shall be deemed to be an
Acquiring Person as of the date that shares are registered in the name of such
Person [or one or more of its Associates or Affiliates] which cause such Person
to have such level of ownership unless, as of the date of such acquisition, the
aggregate number of shares of the Common Stock owned beneficially, by such
Exempt Person (collectively with such Person's Associates and Affiliates) is
less than fifteen percent (15%) of the Company's then-outstanding Common Stock.
To the extent that such Exempt Person [or one or more of its Associates or
Affiliates] divests himself, herself, or itself of shares such that his, her or
its percentage of ownership decreases from the level at the date hereof, then
such Person shall not acquire additional shares of the Common Stock until such
Person [together with its Associates and Affiliates] would collectively own less
than fifteen percent (15%) of the shares of the Common Stock then issued and
outstanding. For purposes of this definition of "Acquiring Person", the
determination of whether any Person acted in "good faith" shall be conclusively
determined by the Board of Directors of the Company, acting by vote of those
directors of the Company whose approval would be required to redeem the Rights
under Section 23.
(b) "Act" shall have the meaning set forth in Section 9(c) hereof.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule
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12b-2 of the General Rules and Regulations under the Exchange Act, as in effect
on the date hereof.
(e) "Agreement" shall have the meaning set forth in the preamble hereto.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the occurrence of an event) pursuant to
any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (1) securities tendered
pursuant to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (2)
securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event, or (3) securities issuable
upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) hereof ("Original
Rights") or pursuant to Section 11(i) or Section 22 hereof in
connection with an adjustment made with respect to Original
Rights; or
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
Exchange Act and applicable rules and regulations thereunder and
(2) is not then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report) or would not be, if
the Company's Common Stock were registered under the Exchange
Act, then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or (iii) which are
beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph
(f)) or disposing of any securities of the Company.
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Notwithstanding the foregoing, nothing contained in this paragraph (f)
shall cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired in a bona fide firm commitment underwriting pursuant to an
underwriting agreement with the Company.
(g) "Business Day" means any day other than a Saturday, Sunday, or a day
on which national banks in Nashville, Tennessee are authorized or obligated by
law or executive order to close.
(h) "Certification" shall have the meaning set forth in Section 18
hereof.
(i) The "close of business" on any given date means 5:00 p.m., Central
Time, on such date; provided, however, that if such date is not a Business Day
it means 5:00 p.m., Central Time, on the next succeeding Business Day.
(j) "Common Stock" when used with reference to the Company means the
shares of common stock, par value $4.00, of the Company. "Common Stock" when
used with reference to any Person other than the Company means either the
capital stock with the greatest voting power of such other Person or, if such
Person is a Subsidiary of another Person, the equity securities or other equity
interest having power to control or direct the management of such Person.
(k) "Common Stock Equivalent" shall have the meaning set forth in
Section 11(a)(iii).
(l) "Company" shall have the meaning set forth in the preamble hereto.
(m) "Co-Rights Agent" shall have the meaning set forth in Section 2
hereof.
(n) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(o) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(p) "Distribution" shall have the meaning set forth in the recitals
hereto.
(q) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(r) "Equivalent Common Stock" shall have the meaning set forth in
Section 11(b) hereof.
(s) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(t) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(u) "Exempt Person" means any Person owning beneficially and/or of
record not fewer than
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156,027 shares of the Common Stock as of July 18, 2001, and which would, but for
Sections 1(a) and 1(mm), constitute an Acquiring Person, together with its
Associates and Affiliates.
(v) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(w) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(x) "Full Share Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(y) "Independent Director" shall have the meaning ascribed to that term
in Section 29(b) of this Agreement.
(z) "Original Rights" shall have the meaning set forth in the definition
of "Beneficial Owner" in paragraph (f) above.
(aa) "Per Right Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(bb) "Person" means any individual, firm, corporation, partnership,
trust or other entity, and shall include any successor (by merger or otherwise)
of such entity.
(cc) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(dd) "Record Date" shall have the meaning set forth in the recitals
hereto.
(ee) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(ff) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(gg) "Rights" shall have the meaning set forth in the recitals hereto.
(hh) "Rights Agent" shall have the meaning set forth in the preamble
hereto.
(ii) "Rights Dividend Declaration Date" shall have the meaning set forth
in the recitals hereto.
(jj) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii).
(kk) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii).
(ll) "Section 13 Event" means any event described in Section 13(a).
(mm) "Shares Acquisition Date" means (1) the first date of public
announcement (which, for
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purposes of this definition, includes a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or any Person (subject to any express
exceptions hereto, such as an Exempt Person) that such Person has become an
Acquiring Person, (2) the date on which any Person acquires beneficially or of
record, as much as fifteen-percent (15%) of the issued and outstanding shares of
the Common Stock, and/or (3) the date on which any Exempt Person acquires,
beneficially or of record, any additional shares of the Company's Common Stock
(except by reason of a stock dividend distributed to all of the Company's
shareholders pro-rata).
(nn) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(oo) "Subsidiary" means, with reference to any Person, any corporation
(or other entity) of which an amount of voting securities (or comparable
ownership interests) sufficient to elect at least a majority of the directors
(or comparable individuals) of such corporation (or other entity) is
beneficially owned or otherwise controlled, directly or indirectly, by such
Person.
(pp) "Substantial Block" means a number of shares of Voting Stock which
have fifteen percent (15%) or more of the aggregate voting power of all
outstanding shares of Voting Stock.
(qq) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(rr) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(ss) "Takeover Initiative" means any "takeover" as that term is
currently understood and any "takeover offer" as that term is defined in the
Tennessee Act.
(tt) "Tennessee Act" means the Tennessee Investor Protection Act,
T.C.A. ss. ss. 00-000-000, et seq.
(uu) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(vv) "Triggering Event" means any Section 11(a)(ii) Event or Section 13
Event.
(ww) "Voting Stock" means the outstanding shares of Common Stock, par
value $4.00, and any other shares of capital stock of the Company which are
entitled to vote generally in the election of directors.
Section 2. Appointment of Rights Agent. The Company hereby appoints
Registrar and Transfer Company to act as rights agent for the Company in
accordance with the terms and conditions hereof, and Registrar and Transfer
Company hereby accepts such appointment. The Company may act as co-rights agent
and may from time to time appoint such other co-rights agents (each, in such
capacity, together with its successors in such capacity, a "Co-Rights Agent") as
it may deem necessary or desirable upon ten (10) calendar days' written notice
to the Rights Agent. In no event shall the Rights Agent have any duty to
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supervise or in any way be liable for the Co-Rights Agents.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the tenth Business
Day after the Shares Acquisition Date (or, if the tenth Business Day after the
Shares Acquisition Date occurs before the Record Date, the close of business on
the Record Date) and (ii) the close of business on the tenth Business Day (or
such specified or unspecified later date as may be determined by action of the
Board of Directors, including a majority of the Independent Directors, of the
Company) after the date of the commencement of, or of the first public
announcement of the intent of any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any Person organized, appointed or established by the Company or
any Subsidiary of the Company for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer if, upon consummation thereof, such Person
would be an Acquiring Person (the earlier of the dates in subsection (i) and
(ii) hereof being herein referred to as the "Distribution Date") (x) the Rights
will be evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for the Common Stock registered in the names of the holders
of the Common Stock (which certificates for Common Stock shall be deemed also to
be Right Certificates) and not by separate Right Certificates, and (y) the right
to receive Right Certificates will be transferable only in conjunction with the
transfer of Common Stock. As soon as practicable after receipt by the Rights
Agent of written notice from the Company of the Distribution Date, the Rights
Agent, at the Company's expense, will send by first-class, postage prepaid mail,
to each record holder of Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto,
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. On and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Common Stock, in substantially
the form attached hereto as Exhibit B (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for Common Stock outstanding as of
the Record Date, until but excluding the Distribution Date, the Rights will be
evidenced by such certificates for Common Stock, and the registered holders of
Common Stock shall also be the registered holders of the associated Rights.
Until but excluding the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any of the certificates for Common
Stock outstanding on the Record Date shall also constitute the transfer of the
Rights associated with Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date or, in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates representing such shares of
Common Stock shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
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This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement dated as of July 18,
2001 between Capital Bancorp, Inc. and Registrar and Transfer Company
(as supplemented or amended and in effect from time to time, the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Capital Bancorp, Inc.. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Capital Bancorp, Inc. will mail to the holder of this certificate a copy
of the Rights Agreement as in effect on the date of mailing without
charge within five Business Days after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights beneficially owned by an Acquiring Person may become null and
void.
Until but excluding the Distribution Date, the Rights associated with
Common Stock represented by certificates containing the foregoing legend shall
be evidenced by such certificates alone, and the surrender for transfer of any
of such certificates shall also constitute the transfer of the Rights associated
with Common Stock represented by such certificates. In the event that the
Company purchases or acquires any shares of Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such Common Stock
shall be deemed cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the shares of Common Stock which are no
longer outstanding. The failure to print the foregoing legend on any such Common
Stock certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) shall be in
substantially the form of Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. The Right Certificates shall be in
machine-printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, shall
show the date of countersignature, and on their face shall entitle the holders
thereof to purchase such number of shares of Common Stock (or following a
Triggering Event, other securities, cash or other assets, as the case may be) as
shall be set forth therein at the price set forth therein (such exercise price
per one half share of Common Stock, the "Per Right Purchase Price"), but the
number of such shares and the Per Right Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents
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Rights beneficially owned by: (i) an Acquiring Person or any Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Affiliate or Associate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Affiliate or Associate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom such Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding (whether or not in writing) which
has as a primary purpose or effect the avoidance of Section 7(e) hereof, and any
Right Certificate issued pursuant to Section 6 or Section 11 hereof, upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend, modified as applicable to apply to such Person:
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 Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by one of its authorized officers
either manually or by facsimile signature. The Right Certificates shall be
countersigned by an authorized signatory of the Rights Agent either manually or
by facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificates may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such a signatory.
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Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates, the date of each of the Right Certificates and
the date of countersignature of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock (or following a Triggering Event, other securities, cash
or other assets, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or, in the case of a
transfer, such former holder) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence, as the Company shall reasonably request,
of the identity of the Beneficial Owner, Affiliates or Associates of such
Beneficial Owner or holder, or of any other Person with which such holder or any
of such holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of securities of the Company. Thereupon the Rights Agent
shall, subject to Section 14 and Section 20(k) hereof, countersign and deliver
to the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment from a Right
Certificates holder of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, along with a signature guarantee and
such other and further documentation as the Rights Agent may reasonably request,
and if requested by the Company, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
10
Section 7. Exercise of Rights; Per Right Purchase Price; Full Share
Purchase Price; Expiration Date of Rights. (a) Subject to Section 7(e) hereof,
the registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Sections 9(c), 11(a)(iii), 23(a) and
24(b) hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the designated office
of the Rights Agent, together with payment of the aggregate Per Right Purchase
Price for the total number of shares of Common Stock (or other securities, cash
or other assets, as the case may be) as to which the Rights are then
exercisable, at or prior to the earliest of (i) the close of business on July
18, 2011 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, or (iii) the time at which all
exercisable Rights are exchanged as provided in Section 24 hereof (such earliest
date being herein referred to as the "Expiration Date").
(b) The Per Right Purchase Price for each one half share of Common Stock
pursuant to the exercise of a Right shall initially be $25.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in accordance with paragraph (c) below. The "Full Share
Purchase Price" shall be equal to (x) the Per Right Purchase Price divided by
(y) the number of shares of Common Stock for which such Right is then
exercisable (being initially one-half of one share of Common Stock).
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed and
completed accompanied by payment of the Per Right Purchase Price for the number
of shares of Common Stock (or other securities, cash or other assets, as the
case may be) to be purchased and an amount equal to any applicable transfer tax,
the Rights Agent shall thereupon, subject to Section 20(k), promptly (i)
requisition from the Company certificates for the total number of shares of
Common Stock to be purchased, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14, (iii) promptly after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate. The payment of the Per Right Purchase Price must be made in
cash or by certified bank check or bank draft or money order payable to the
order of the Company or the Rights Agent. In the event that the Company is
obligated to issue securities, distribute property or pay cash pursuant to
Section 11(a)(iii) hereof, the Company will make all arrangements necessary so
that cash, property or securities are available for issuance, distribution or
payment by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
11
(e) 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 Affiliate or Associate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Affiliate or
Associate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof 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 any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner, Affiliates or Associates of such Beneficial Owner or holder,
or of any other Person with which such holder or any of such holder's Affiliates
or Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common Stock.
12
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Common Stock
(and following the occurrence of a Triggering Event, out of its authorized and
unissued other securities), or out of its authorized and issued shares of Common
Stock (and, following the occurrence of a Triggering Event, out of its
authorized and issued other securities) held in its treasury, the number of
shares of Common Stock (and, following the occurrence of a Triggering Event,
other securities) that will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will take such other
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Common Stock (and, following the occurrence
of a Triggering Event, other securities) issuable upon the exercise of Rights
may be listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be registered under the Act
and the Exchange Act, and to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Section 11(a)(ii) Event, or as
soon as required by law, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the 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 the blue sky laws of the various states. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock (and following the
occurrence of a Triggering Event, other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Per Right Purchase Price), be duly and validly
authorized and issued, and fully paid and nonassessable.
13
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of the Common Stock (or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however, be required (a) to pay
any transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or delivery of
certificates for Common Stock (or other securities, as the case may be) in a
name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or (b) to issue or deliver any
certificates for a number of shares of Common Stock (or other securities, as the
case may be) upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for any number of shares of Common Stock (or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such whole and/or fractional
shares of Common Stock (or other securities, as the case may be) represented
thereby on, and such certificate shall be dated the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the Per
Right Purchase Price (and any applicable transfer taxes) was made and shall show
the date of countersignature; provided, however, that if the date of such
surrender and payment is a date upon which Common Stock (or other securities, as
the case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Stock (or
other securities, as the case may be) 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,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Per Right Purchase Price, Number of Shares or
Number of Rights. The Per Right Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Common Stock payable in shares of the
Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares or (D) issue any shares
of its capital stock in a reclassification of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Per Right Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Common Stock or capital stock, as
14
the case may be, issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Per Right Purchase Price then in effect, the
aggregate number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when Common Stock
(or other securities) transfer books of the Company were open, he or she would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any Person,
alone or together with its Affiliates and Associates, becomes, at any time after
the Rights Dividend Declaration Date, an Acquiring Person except as the result
of a transaction set forth in Section 13(a) hereof (a "Section 11(a)(ii)
Event"), then, prior to the later of (x) the date on which the Company's rights
of redemption pursuant to Section 23(a) expire and (y) five (5) days after the
date of the first occurrence of a Section 11(a)(ii) Event, proper provision
shall be made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have a right to receive, upon exercise thereof at the
then current Per Right Purchase Price in accordance with the terms of this
Agreement, such number of shares of Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Full Share Purchase
Price by the number of shares of Common Stock for which a Right is then
exercisable and dividing that product by (y) fifty percent (50%) of the Current
Market Price per share of Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of the occurrence of the event described above in
this subparagraph (ii) (such number of shares is hereinafter referred to as the
"Adjustment Shares"), provided that the Per Right Purchase Price and the number
of Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence.
(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's articles of incorporation, charter, or certificate
of incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall (A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over (2) the Per
Right Purchase Price (such excess, the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares, upon
exercise of the Rights and payment of the applicable Per Right Purchase Price,
(1) cash, (2) a reduction in the Per Right Purchase Price, (3) other equity
securities of the Company (including, without limitation, shares of preferred
stock which a majority of the Independent Directors and the Board of Directors
of the Company have deemed to have the same value as shares of Common Stock
(such shares of preferred stock, "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by a majority of the Independent Directors
and the Board of Directors of the Company based upon the advice of an
independent nationally or regionally recognized investment banking firm selected
by
15
the Board of Directors of the Company; provided, however, that if the Company
shall not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first occurrence of
a Section 11(a)(ii) Event and (y) the date on which the Company's rights of
redemption pursuant to Section 23(a) expire (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Per Right Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this subparagraph (iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement and shall give concurrent written notice to the Rights Agent
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement and notice to the Rights Agent at such time as the
suspension is no longer in effect. For purposes of this subparagraph (iii), the
value of the Common Stock shall be the Current Market Price (as determined
pursuant to Section ll(d) hereof) per share of Common Stock on the Section
11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be
deemed to be the same as the value of Common Stock on such date. The Company
shall give the Rights Agent notice of the selection of any Common Stock
Equivalent under this subparagraph (iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them (for a
period expiring within forty-five (`) calendar days after such record date) to
subscribe for or purchase Common Stock (or securities having substantially the
same rights, privileges and preferences as the shares of Common Stock
("Equivalent Common Stock") or convertible into Common Stock or Equivalent
Common Stock) at a price per share of Common Stock or Equivalent Common Stock
(or having a conversion price per share, if a security convertible into Common
Stock or Equivalent Common Stock) less than the Current Market Price (as defined
in Section 11(d) per share of Common Stock or Equivalent Common Stock, as the
case may be) on such record date, the Per Right Purchase Price to be in effect
after such record date shall be determined by multiplying the Per Right Purchase
Price in effect immediately prior to such record date by a fraction, of which
the numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock or Equivalent Common Stock
which the aggregate offering price of the total number of shares of Common Stock
or Equivalent Common Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market
16
Price and of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock and/or Equivalent Common Stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which 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. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Per Right Purchase Price shall be adjusted to be the Per
Right 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 Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Common
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Per Right Purchase Price to be in effect after such record
date shall be determined by multiplying the Per Right Purchase Price in effect
immediately prior to such record date by a fraction, of which the numerator
shall be the Current Market Price per share of Common Stock (as defined in
Section 11(d)) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Common Stock and of which the
denominator shall be such Current Market Price per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Per Right Purchase Price
shall again be adjusted to be the Per Right Purchase Price which would then be
in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), 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 thirty consecutive Trading
Days (as such term is hereinafter defined in this paragraph (d)) immediately
prior to such date and, for purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market Price
per share of Common Stock is determined during the 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 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 thirty Trading Day or ten Trading
Day period, as set forth above, after the ex-dividend date for such dividend or
distribution or
17
the record date for such subdivision, combination or reclassification, then, and
in each such case, the Current Market Price shall be appropriately 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 the Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of the Common
Stock are listed or admitted to trading or, if the shares of the 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 such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
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 shall be as determined in good faith by the Independent
Directors if the Independent Directors constitute a majority of the Board of
Directors or, in the event the Independent Directors do not constitute a
majority of the Board of Directors, by an independent nationally or regionally
recognized investment banking firm selected by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "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 Monday, Tuesday, Wednesday, Thursday or Friday
on which national banks in Nashville, Tennessee (or, if none are located there,
in Nashville, Tennessee) are not authorized or obligated by law or executive
order to close. If the Common Stock is not publicly held or not so listed or
traded, "Current Market Price" per share means the fair value per share as
determined in good faith by the Independent Directors if the Independent
Directors constitute a majority of the Board of Directors or, in the event the
Independent Directors do not constitute a majority of the Board of Directors, by
an independent nationally or regionally investment banking firm selected by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Per Right Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
18
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than shares of Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Per Right 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 Common Stock contained in
Section 11(a) through (p), inclusive, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to Common Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Per Right Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Per Right Purchase Price, the number of
shares of Common Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Per Right Purchase Price as a result
of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Per Right Purchase Price, that number of
shares (calculated to the nearest tenth-thousandth) obtained by (i) multiplying
(x) the number of shares covered by a Right immediately prior to this adjustment
by (y) the Per Right Purchase Price in effect immediately prior to such
adjustment of the Per Right Purchase Price and (ii) dividing the product so
obtained by the Per Right Purchase Price in effect immediately after such
adjustment of the Per Right Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Per Right Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Per Right Purchase Price in effect immediately prior to adjustment
of the Per Right Purchase Price by the Per Right Purchase Price in effect
immediately after the adjustment of the Per Right Purchase Price. The Company
shall make a public announcement and shall give simultaneous written notice to
the Rights Agent of its election to adjust the number of Rights, indicating the
record date for the adjustment to be made. This record date may be the date on
which the Per Right Purchase Price is adjusted or any day thereafter but, if the
Right Certificates have been issued, shall be at least ten (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 subparagraph (i),
the Company shall, as promptly as practicable, cause to be distributed to
holders 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
19
such holders shall be entitled after such adjustment. Right Certificates so to
be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Per Right 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 Per Right Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Per Right Purchase Price 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
Per Right Purchase Price below the then par value, if any, of a share of Common
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 such number of fully paid and
nonassessable shares of such Common Stock at such adjusted Per Right Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Per Right 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 of the number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the Per Right
Purchase Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Per Right Purchase
Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that the Board of Directors of the Company shall determine
to be advisable in order that any consolidation or subdivision of shares of
Common Stock, issuance wholly for cash of any shares of Common Stock at less
than the Current Market Price, issuance wholly for cash of the Common Stock or
securities which by their terms are convertible into or exchangeable for Common
Stock, stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11 hereafter made by the Company to holders of its
Common Stock shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Sections 23, 24 and 27 hereof, take (nor
will it permit any of its Subsidiaries to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
20
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(n)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(n)), or (iii) sell or transfer
(or permit any of its Subsidiaries to sell or transfer), in one or more
transactions, assets or earning power aggregating more than fifty percent (50%)
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n)) if (x) at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(p) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date, the Company may, in lieu of making any adjustment to the
Per Right Purchase Price, the number of shares of Common Stock eligible for
purchase on exercise of each Right or the number of Rights outstanding, which
adjustment would otherwise be required by Section 11(a)(i), 11(b), 11(c), 11(h)
or 11(i), make such other equitable adjustment or adjustments thereto as the
Board of Directors (whose determination shall be conclusive) deems appropriate
in the circumstances and not inconsistent with the objectives of the Board of
Directors in adopting this Agreement and such Sections.
Section 12. Certificate of Adjusted Per Right 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 and the
adjusted Per Right Purchase Price, (b) promptly file with the Rights Agent and
with each transfer agent for the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with 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) In the event that, following the Shares Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with or into,
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(n)) and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
ll(n)) shall consolidate, merge with or into the Company and the Company shall
be the continuing or surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z)
21
the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating more than fifty percent (50%) of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n) hereof), then, and in
each such case, proper provision shall be made so that (i) each holder of a
Right (except as provided in Section 7(e)) shall thereafter have the right to
receive, upon the exercise thereof at the then current Per Right Purchase Price
in accordance with the terms of this Agreement, such number of validly issued,
fully paid, nonassessable and freely tradable shares of Common Stock of the
Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of call or first refusal, or other adverse claims as shall
be equal to the result obtained by (l) multiplying the then current Full Share
Purchase Price by the number of shares of Common Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event (or,
if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such shares for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Full Share Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Full Share Purchase Price" for
each Right and for all purposes of this Agreement) by (2) fifty percent (50%) of
the Current Market Price per share of the Common Stock of such Principal Party
(determined in the manner described in Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant 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 thereafter apply to such Principal Party, (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" means (i) in the case of any transaction described
in (x) or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation and, if no securities are so issued,
the Person that is the other party to the merger or consolidation; and (ii) in
the case of any transaction described in (z) of the first sentence in Section
13(a), the Person that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (x) 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 corporation the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation and (y) if such Person is a Subsidiary, directly or indirectly, of
more than one corporation, the Common Stocks of two or more of which are and
have been so registered, "Principal Party" shall refer to whichever of such
corporations
22
is the issuer of the Common Stock having the greatest market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock which are neither outstanding nor 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 paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation, merger or sale
of assets mentioned in paragraph (a) of this Section 13, the Principal Party(i)
will prepare and file a registration statement under the Act with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, will use its best efforts to cause such registration statement
to become effective as soon as practicable after such filing and will use its
best efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and(ii) will 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
Section 13 Events. In the event that a 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 or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Board of
23
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock or Common Stock Equivalents upon exercise or exchange of the Rights
or to distribute certificates which evidence fractional shares. In lieu of
fractional shares of Common Stock or Common Stock Equivalents, the Company may
pay to the registered holders of Right Certificates at the time the Rights
evidenced thereby are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of Common Stock or
Common Stock Equivalents. For purposes of this Section 14(b), the current market
value of one share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to Section 11(d)) for the Trading Day
immediately prior to the date of such exercise or exchange, as the case may be,
and the current market value of any Common Stock Equivalent shall be the same as
the current market value of the Common Stock on such date.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right, except as otherwise permitted by this Section
14.
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 the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights 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 hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates
24
fully executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request;
(c) subject to Section 6 and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be required to be affected by any notice to the contrary;
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, 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 number of shares of
Common Stock or any other securities of the Company that 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
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised or exchanged for
Common Stock in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (including the reasonable fees and expenses of counsel), for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises. The indemnity provided
for
25
herein shall survive the expiration of the rights and the termination of this
Agreement. The cost and expenses incurred in enforcing this right of
indemnification shall be paid by the Company.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Common Stock or other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, instruction, adjustment notice, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement in reliance upon (i)
the proper execution of the certification appended to the Form of Assignment and
the Form of Election to Purchase included as part of Exhibit A hereto (the
"Certification"), unless the Rights Agent shall have actual knowledge that, as
executed, the Certification is untrue or (ii) the non-execution or failure to
complete the Certification including, without limitation, any refusal to honor
any otherwise permissible assignment or election by reason of such non-execution
or failure.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
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 the
predecessor 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.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations
26
imposed by this Agreement upon the following terms and conditions and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, by all of which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, it 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 be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (including the Rights becoming void pursuant to
Section 7(e) hereof) (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the President,
any Senior Vice President, any Vice President, the Treasurer or the Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, gross negligence, bad faith or willful misconduct. The issuance or
non-issuance of a Right Certificate or Common Stock or other security issued in
lieu of Common Stock in accordance with instructions given to the Rights Agent
by the Company pursuant to Section 20(k) hereof or in accordance with the terms
hereof shall not constitute negligence, 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 Rights (including the
Rights becoming void pursuant to Section 7(e) hereof); nor shall it be
responsible for any adjustment required under the provisions of Section 11 or 13
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment or change); 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 to be issued pursuant
to this
27
Agreement or any Right Certificate or as to whether any shares of Common Stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any one of the
Chairman of the Board, the President, any Senior Vice President, any Executive
Vice President, any Vice President, the Secretary or the Treasurer of the
Company, and is authorized to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions of
any such officer. An application by the Rights Agent for instructions may set
forth in writing any action proposed to be taken or omitted by the Rights Agent
with respect to its duties and obligations under this Agreement and the date on
and/or after which such action shall be taken, and the Rights Agent shall not be
liable for any action taken or omitted in accordance with a proposal included in
any such application on or after the date specified therein (which date shall
not be less than one Business Day after the Company receives such application)
without the consent of the Company unless, prior to taking or omitting such
action, the Rights Agent has received written instructions in response to an
application specifying the actions to be taken or omitted.
(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 Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either by itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was exercised in
the selection 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,
28
the certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or indicates an
affirmative response, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting the
Company. The Company shall give the Rights Agent prompt written instructions as
to the action to be taken regarding the Right Certificates involved. The Rights
Agent shall not be liable for acting in accordance with such instructions.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' notice in writing mailed to the Company by registered or
certified mail, and, at the Company's expense, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Right Certificates by first class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Company shall become the temporary Rights
Agent and the registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of Tennessee (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of Tennessee), in good standing, having a principal
office in the State of Tennessee, which is authorized under such laws to
exercise 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 Ten Million Dollars
(US$10,000,000.00). After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this 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
29
change in the Per Right Purchase Price and the number or kind or class of shares
or other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the close of business on the tenth day
following the Shares Acquisition Date (or if the Shares Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date), or (y) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.0001 per
Right as 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"), and the Company may, at its
option, pay the Redemption Price either in shares of its Common Stock (valued at
their Current Market Price as defined in Section 11(d) on the date of the
redemption), other securities, cash or other assets; provided, however, that if
the Board of Directors of the Company authorizes redemption of the Rights in
either of the circumstances set forth in clauses (x) or (y) below then there
must be Independent Directors in office and such authorization shall require the
concurrence of a majority of the Independent Directors: (x) such authorization
occurs on or after the Shares Acquisition Date or (y) such authorization occurs
on or after the date of a change (resulting from a proxy or consent
solicitation) in the composition of a majority of the Board of Directors of the
Company from the Board that was in office at the commencement of such
solicitation if any Person who is a participant in such solicitation has stated
(or if upon the commencement of such solicitation a majority of the Board of
Directors of the Company has determined in good faith) that such Person (or any
of its Affiliates or Associates) intends to take, or may consider taking, any
action which would result in such Person becoming an Acquiring Person or which
would cause the occurrence of a Triggering Event. Notwithstanding anything
contained 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.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the Board of Directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the
30
best interests of the Company and with such care, including reasonable inquiry,
skill and diligence, as a person of ordinary prudence would use under similar
circumstances, and they may consider the long-term and short-term effects of any
action upon employees, suppliers, customers and creditors of the Company or its
Subsidiaries and upon communities in which offices or other establishments of
the Company or its Subsidiaries are located, and all other pertinent factors.
(c) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right held. Within ten (10) days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23, and other than in
connection with the repurchase of Common Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option (provided
that there are then Independent Directors in office and a majority of the
Independent Directors concur), at any time and from time to time on or after a
Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date of this Agreement (such exchange ratio being hereinafter referred
to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any
31
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding, or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock or for issuance upon exchange of the Rights.
(d) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right
(i) Common Stock Equivalents, (ii) cash, (iii) debt securities of the Company,
(iv) other assets, or (v) any combination of the foregoing, having an aggregate
value which a majority of the Independent Directors and the Board of Directors
of the Company shall have determined in good faith to be equal to the Current
Market Price of one share of Common Stock (determined pursuant to Section 11(d)
hereof) on the Trading Date immediately preceding the record date for
determining those Rights holders eligible to receive shares in exchange for
their Rights pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall propose
at any time following the Distribution Date (a) to pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular periodic cash
dividend), or (b) to offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional shares of Common Stock or shares of
stock of any class or any other securities, rights or options, or (c) to effect
any reclassification of Common Stock (other than a reclassification involving
only the subdivision of outstanding Common Stock), or (d) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(n) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transactions, of more than
fifty percent (50%) of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(n) hereof), or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right, in accordance with
Section 26, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least twenty days prior to the record date for
determining holders of the Common Stock for purposes of such action, and in the
case of any such other action, at least twenty days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Stock, whichever shall be the earlier.
32
In case a Section 11(a)(ii) Event shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to the Rights Agent and
to each holder of a Right, to the extent feasible and 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)(iii) and
all references in the preceding paragraph to Common Stock shall be deemed to
thereafter refer to other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Capital Bancorp, Inc.
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
33
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 Certificate to or on the Rights Agent shall be sent by registered or
certified mail and shall be deemed given upon receipt and addressed (until
another address is filed in writing with the Company) as follows:
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Operating Officer
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the earlier of the
Distribution Date or the Shares Acquisition Date and subject to the penultimate
sentence of this Section 27, the Company may from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates.
From and after the earlier of the Distribution Date or the Shares Acquisition
Date, and subject to the penultimate sentence of this Section 27, the Company
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to lengthen the time period
during which the Rights may be redeemed following the Shares Acquisition Date
for up to an additional twenty days beyond the time period set forth in Section
23(a) (provided, however, that any such lengthening shall be effective only if
there are Independent Directors and shall require the concurrence of a majority
of such Independent Directors) or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its
interests under this Agreement. Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment shall be made on or after the
Distribution Date which changes the Redemption Price, the Final Expiration Date,
the Per Right Purchase Price, the Full Share Purchase Price or the number of
shares of Common Stock for which a Right is then exercisable. Prior to the
earlier of the Shares Acquisition Date or 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
34
assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors.
(a) For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company (and,
where specifically provided for herein, the Independent Directors) shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or the Company (or, as
expressly provided, the Independent Directors), or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for the purpose of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board (or, as provided for, by the Independent Directors) in good faith,
shall (i) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (ii) not subject
the Board or the Independent Directors to any liability to the holders of the
Right Certificates.
(b) It is understood that the Independent Directors Committee (as
defined below) of the Board of Directors of the Company shall review and
evaluate this Rights Agreement in order to consider whether the maintenance of
this Rights Agreement continues to be in the interests of the Company, its
shareholders and any other relevant constituencies of the Company, at least
every three years, or sooner than that if any Person shall have made a proposal
to the Company, or taken any such other action, that, if effective, could cause
such Person to become an Acquiring Person hereunder, if a majority of the
members of the Independent Directors Committee shall deem such review and
evaluation appropriate after giving due regard to all relevant circumstances.
Following each such review, the Independent Directors Committee will communicate
its conclusions to the full Board of Directors, including any recommendation in
light thereof as to whether this Rights Agreement should be modified or the
Rights should be redeemed. The Independent Directors Committee shall be
comprised of the Directors of the Company who shall have been determined to be
independent by the determination of the Board of Directors or a Committee
thereof or by reference to the following criteria. A Director shall be deemed to
be an "Independent Director" for the purposes of this Agreement if she or he
shall meet all of the following criteria: Such Person shall not be an employee
(or spouse of an employee) of the Company, nor shall such be substantially
dependent on the Company (or any Affiliate thereof) for her or his livelihood,
nor shall such Person be an Acquiring Person or representative, nominee,
Associate or Affiliate of an Acquiring Person.
Section 30. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to
35
any Person other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of 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.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Captions, Section Headings, Descriptive Headings. Captions,
section and paragraph headings, and descriptive headings of the several Sections
and paragraphs of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
CAPITAL BANCORP, INC.
By: /s/ R. Xxxx Xxxx
36
Name: R. Xxxx Xxxx
Title: President
ATTEST:
By: /s/ H. Xxxxxx Xxxxxxx, III
Name: H. Xxxxxx Xxxxxxx, III
Title: Corporate Secretary
[SEAL]
REGISTRAR AND TRANSFER COMPANY
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
ATTEST:
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
37
EXHIBIT A
[FORM OF RIGHT CERTIFICATE]
Certificate No. R-
--------------------
--------RIGHTS NOT EXERCISABLE AFTER JULY 18, 2011 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.0001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS MAY NOT BE
EXERCISABLE AND THE RIGHTS AGREEMENT MAY BE AMENDED WITHOUT THE APPROVAL OF THE
RIGHTS OWNERS.
CAPITAL BANCORP, INC.
Right Certificate
This certifies that [_________], or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of July 18, 2001 (as supplemented or amended and in effect
from time to time, the "Rights Agreement") between Capital Bancorp, Inc., a
Tennessee corporation (the "Company") and Registrar and Transfer Company (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 p.m.
(Central Time) on July 18, 2011, at the designated office of the Rights Agent,
or its successors as Rights Agent, in Xxxxxxx, New Jersey, one-half of one fully
paid, nonassessable share of the Common Stock, par value $4.00 (the "Common
Stock"), of the Company, at a purchase price of $25.00 per one half share (the
"Per Right Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related certificate duly
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. The number of Rights
evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Per Right Purchase
Price per one half share set forth above, are the number and Per Right Purchase
Price as of July 18, 2001, based on the Common Stock of the Company as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who after such transfer, became an Acquiring
38
Person, 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.
As provided in the Rights Agreement, the Per Right Purchase Price and
the number and kind of shares of Common Stock (or, in certain circumstances,
other securities) which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events, including Triggering Events (as such term
is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent, and at the executive offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (a) may be redeemed by the Company at its option at a
redemption price of $.0001 per Right prior to the earlier of the close of
business on (i) the tenth day following the Shares Acquisition Date (as such
term is defined in the Rights Agreement) and (ii) the Final Expiration Date (as
such term is defined in the Rights Agreement) or (b) may be exchanged in whole
or in part for shares of Common Stock and/or other securities, cash or other
assets of the Company deemed to have the same value as shares of Common Stock,
at any time after a Section 11(a)(ii) Event. The Rights Agreement may be amended
without the approval of the holders of the Rights as and to the extent set forth
therein.
No fractional shares of Common Stock will be issued upon the exercise or
exchange of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for
39
any purpose the holder of the Common Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings 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 or exchanged for
Common Stock as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of July 18, 2001.
[SEAL]
ATTEST: CAPITAL BANCORP, INC.
By: By:
-------------------------------- ------------------------------
Name: Typed or Printed Name
------------------------------
Title: Title:
----------------------------- ---------------------------
Countersigned:
Registrar and Transfer Company
as Rights Agent
By:
--------------------------------
Authorized Signature
Date:
------------------------------
40
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
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:
--------------------------------
--------------------------------------
Signature
Signature Guaranteed:
-------------------------------------
(Signatures must be guaranteed.)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate box that:
Exercising this Right Certificate will [ ] will not [ ] enable the undersigned,
its Affiliates, its Associates and/or any other Person with which the
undersigned or any of the undersigned's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of securities of the Company
to obtain, individually or in the aggregate, beneficial ownership of Common
Stock or other securities that have fifteen percent (15%) or more of the
aggregate voting power of the outstanding shares of the Common Stock and other
securities having voting power.
Dated:
------------------------ ---------------------------------------
Signature
Signature Guaranteed:
-------------------------------------
(Signatures must be guaranteed.)
NOTICE
The signature to the foregoing Assignment and Certificate must correspond to the
name as written upon
41
the face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
evidenced by the Right Certificate.)
To Capital Bancorp, Inc.:
The undersigned hereby irrevocably elects to exercise __________________ Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of such Rights (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 shares be issued in the name of:
Please insert social security or other taxpayer identifying number: ___________.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[Please print name and address]
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[Please print name and address]
Please insert social security or other taxpayer identifying number: ___________.
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
-----------------------
------------------------------------
Signature
Dated:
----------------------- --------------------------------
Signature
Signature Guaranteed:
----------------------------------------------
(Signatures must be guaranteed.)
42
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On July 18, 2001 the Board of Directors of Capital Bancorp, Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock, par value $4.00, of the Company (the "Common Stock") to
shareholders of record at the close of business on July 18, 2001 (the "Record
Date"). The Rights are to be issued pursuant to a shareholder rights plan which
was approved by the Board of Directors on July 18, 2001. Each Right entitles the
registered holder to purchase from the Company one-half of one share of Common
Stock at a price of $50.00 per share (the "Full Share Purchase Price"), being
$25.00 per half share (the "Per Right Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (as
modified or supplemented and in effect from time to time, the "Rights
Agreement") between the Company and Registrar and Transfer Company, as Rights
Agent (the "Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten Business Days following the date
(the "Shares Acquisition Date") of the public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of Common Stock or other
voting securities of the Company ("Voting Stock") that have fifteen percent
(15%) or more of the voting power of the outstanding shares of Voting Stock or
(ii) ten Business Days (or such later time as may be specified by the Board of
Directors of the Company and the Independent Directors) following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in such person acquiring, or
obtaining the right to acquire, beneficial ownership of Voting Stock having
fifteen percent (15%) or more of the voting power of the outstanding shares of
Voting Stock of the Company (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Company's Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Company's Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Company's Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Company's Common Stock certificates outstanding as of the
Record Date will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on July 18, 2011, unless earlier redeemed
or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person at any time
following the Distribution Date,
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each holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the Per Right Purchase Price
of the Right then in effect. Notwithstanding any of the foregoing, following the
occurrence of such event set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other similar business combination
transaction, or (ii) fifty percent (50%) or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right to receive, upon exercise, Common Stock of the acquiring company having a
value equal to two times the Per Right Purchase Price of the Right then in
effect.
Adjustments to Per Right Purchase Price
The Per Right Purchase Price payable, and the number of shares of
Common Stock (or other securities, as the case may be) issuable upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for or purchase shares
of the Common Stock or convertible securities at less than the then Current
Market Price of the Common Stock or (iii) upon the distribution to holders of
the Common Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in the Common Stock) or of
subscription rights or warrants (other than those referred to above). Prior to
the Distribution Date, the Board of Directors of the Company may make such
equitable adjustments as it deems appropriate in the circumstances in lieu of
any adjustment otherwise required by the foregoing.
With certain exceptions, no adjustment in the Per Right Purchase Price
will be required until the earlier of (i) three years from the date of the event
giving rise to such adjustment or (ii) the time at which cumulative adjustments
require an adjustment of at least one percent (1%) in such Per Right Purchase
Price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Common Stock
on the last trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time prior to 5:00 p.m. Central Time on the tenth day following
the Shares Acquisition Date, the Company may redeem the Rights in whole, but not
in part, at a price of $.0001 per Right (the "Redemption Price"). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem shall
require the concurrence of a majority of the Independent Directors. Immediately
upon the action of the Board of Directors of the Company electing to redeem the
Rights with, if required, the concurrence of the Independent Directors, the
Company shall make announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
At any time after the occurrence of the event set forth under the
heading "Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the
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Independent Directors) may exchange the Rights (other than Rights owned by an
Acquiring Person, which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock, and/or other securities, cash or other
assets deemed to have the same value as one share of Common Stock, per Right,
subject to adjustment.
Until a Right is exercised or exchanged for Common Stock, the holder
thereof, as such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to shareholders or to the
Company, shareholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Common Stock or other
consideration of the Company or for the stock of the Acquiring Person as set
forth above, or are exchanged as provided in the preceding paragraph.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights prior to the Distribution Date. Thereafter, the provisions of the Rights
Agreement may be amended by the Board of Directors in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interest of any
Acquiring Person); provided, however, that no supplement or amendment may be
made on or after the Distribution Date which changes those provisions relating
to the principal economic terms of the Rights. The Board of Directors may also,
with the concurrence of a majority of the Independent Directors, extend the
redemption period for up to an additional twenty (20) days.
The term "Independent Directors Committee" shall be comprised of the
Directors of the Company who shall have been determined to be independent by the
determination of the Board of Directors or a Committee thereof or by reference
to the following criteria. A Director shall be deemed to be an "Independent
Director" for the purposes of this Agreement if she or he shall meet all of the
following criteria: Such Person shall not be an employee (or spouse of an
employee) of the Company, nor shall such be substantially dependent on the
Company (or any Affiliate thereof) for her or his livelihood, nor shall such
Person be an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, or a nominee of an Acquiring Person or an Associate or Affiliate of an
Acquiring Person.
A copy of the Rights Agreement is available free of charge from the
Company to each shareholder. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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