ONE PRICE CLOTHING STORES, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
AS OF OCTOBER 25, 2000
Table of Contents
Section Page
1 Certain Definitions.........................................................................................3
2 Appointment of Rights Agent.................................................................................7
3 Issue of Right Certificates.................................................................................8
4 Form of Right Certificates..................................................................................9
5 Countersignature and Registration..........................................................................10
6 Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates...................................................11
7 Exercise of Rights; Exercise Price; Expiration Date of Rights..............................................12
8 Cancellation and Destruction of Right Certificates.........................................................13
9 Reservation and Availability of Common Stock...............................................................14
10 Common Stock Record Date...................................................................................15
11 Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights................................15
12 Certificate of Adjusted Exercise Price or Number of Shares.................................................24
13 Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................................25
14 Fractional Rights and Fractional Shares....................................................................27
15 Rights of Action...........................................................................................28
16 Agreement of Right Holders.................................................................................29
17 Right Certificate Holder Not Deemed Shareholder............................................................29
18 Concerning the Rights Agent................................................................................30
19 Merger or Consolidation or Change of Name of Rights Agent..................................................30
20 Duties of Rights Agent.....................................................................................31
21 Change of Rights Agent.....................................................................................33
22 Issuance of New Right Certificates.........................................................................34
23 Redemption.................................................................................................35
24 Exchange...................................................................................................36
25 Notice of Certain Events...................................................................................37
26 Notices....................................................................................................38
27 Supplements and Amendments.................................................................................39
28 Successors.................................................................................................39
29 Determinations and Actions by the Board of Directors.......................................................40
30 Benefits of this Agreement.................................................................................40
31 Severability...............................................................................................40
32 Governing Law..............................................................................................41
33 Counterparts...............................................................................................41
34 Descriptive Headings.......................................................................................41
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
This Amended and Restated Shareholder Rights Agreement (as the same may
from time to time be amended, restated or supplemented, this "Agreement"), dated
as of October 25, 2000, between One Price Clothing Stores, Inc., a Delaware
corporation (the "Company"), and Continental Stock Transfer & Trust Company, a
New York corporation (the "Rights Agent", which term shall include any successor
Rights Agent hereunder).
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, on November 3, 1994 the Board of Directors of the Company
authorized a shareholder rights agreement (the "Original Agreement") and
declared a dividend distribution of one Right (as hereinafter defined) for each
whole share of Common Stock, $.01 par value per share, of the Company (the
"Common Stock") outstanding as of the Close of Business on November 15, 1994
(the "Record Date") and authorized the issuance of one Right for each whole
share of Common Stock of the Company which is issued or which becomes
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined), each Right initially representing the right to purchase a portion of a
share of Common Stock, upon the terms and conditions set forth herein (the
"Rights");
WHEREAS, the Board of Directors of the Company has determined that it is
in the best interests of the Company's shareholders to amend and restate the
Original Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall on any date hereafter, be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or any of its
Subsidiaries, (iv) any entity or Person holding shares of Common Stock for or
pursuant to the terms of any such plan, or (v) any person or entity beneficially
owning in excess of 20% as of the Record Date of the outstanding Common Stock of
the Company. The Persons described in clauses (i) through (v) above are referred
to herein as "Exempt Persons"; provided however that any entity or Person
described in subsection (v) above shall cease status as an Exempt Person if,
after the date of this Plan, such Person or entity increases his, her or its
beneficial ownership to more than 30% of the outstanding common stock of the
Company. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person (together with all Affiliates and
Associates of such Person) to 15% or more of the Common Stock of the Company
then outstanding; provided, however, that if any Person, (together with all
Affiliates and Associates of such Person, ((other than Exempt Persons)) shall
become the Beneficial Owner of 15% or more of the Common Stock of the Company
then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional shares of Common Stock of the Company, then such Person shall be
deemed to be an "Acquiring Person."
(b) "Adjustment Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement; provided, however,
that no Exempt Person shall be deemed an Affiliate or an Associate.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates,
beneficially own, directly or indirectly (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement) or has the right to dispose of;
(ii) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has (A) the right to acquire (whether such right is
exercisable immediately or after the passage of time) pursuant to any agreement,
arrangement or understanding, upon the exercise of conversion rights, exchange
rights, rights (other than the 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 an Adjustment Event; or (3) securities issuable upon exercise of
Rights from and after the occurrence of an Adjustment Event, if such Rights were
acquired by such Person or such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 or pursuant to
Section 11(a)(i) in connection with an adjustment made with respect to any of
the Rights heretofore specified in this clause (3); or (B) the right to vote
pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy given to such Person or any of such Person's Affiliates
or Associates in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act, or (2) is made in connection with, or is to
otherwise participate in, a proxy or consent solicitation made or to be made
pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act, in the case of either clause (1) or (2) of
this proviso whether or not such agreement, arrangement or understanding is also
then reportable by such person 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 (or any Affiliate or Associate thereof) 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 clause (B)
of Section 1(e)(ii) hereof) or disposing of any securities of the Company;
provided, however, that (1) no Person engaged in business as an underwriter of
securities shall be deemed the Beneficial Owner of any securities acquired
through such Person's participation as an underwriter or selling group member in
good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition; (2) no Person who is a director or an
officer of the Company shall be deemed the Beneficial Owner of any securities of
the Company that are beneficially owned by any other director or officer of the
Company solely as a result of his or her position as director or officer of the
Company; (3) any agreement, arrangement or understanding (whether or not in
writing), or any communication or discussion, among two or more Persons with
respect to any matter relating to the management, operation or conduct of the
business of the Company, including any discussion or agreement on, or any
communication with respect to, a position with respect to any such matter and
the disclosure of such communication, discussion, agreement or position to other
Persons (including shareholders of the Company) or to the Company shall not
constitute an agreement, arrangement or understanding contemplated by Section
1(e)(ii)(B).
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of South Carolina or the State of
North Carolina are authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., Greenville
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., Greenville time, on the next succeeding Business Day.
(h) "Common Stock" shall mean the Common Stock, $.01 par value per share,
of the Company, except that "common stock" when used with reference to any
Person other than the Company shall mean the capital stock (or equity interest)
with the greatest voting power of such Person, or the equity securities or other
equity interest having power to control or direct the management, of such person
or, if such Person is a subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person and which has issued and
outstanding such capital stock, equity securities or equity interests.
(i) "Current Per Share Market Price" shall have the meaning set forth in
Section 11(d)(i).
(j) "Current Value" shall have the meaning set forth in Section 11(a)(iii).
(k) "Disinterested Director" shall mean (i) any member of the Company's
Board of Directors who is unaffiliated with an Acquiring Person, or an Affiliate
or Associate of any such Person and was a member of the Company's Board of
Directors prior to the time that an Acquiring Person became such, and any
successor of a Disinterested Director who is unaffiliated with an Acquiring
Person, or any Affiliate or Associate of any such Person and is recommended to
succeed a Disinterested Director by a majority of the Disinterested Directors
then on the Company's Board of Directors.
(l) "Distribution Date" shall have the meaning defined in Section 3(a)
hereof.
(m) "Equivalent Common Stock" shall have the meaning set forth in Section
11(a)(iii) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(o) "Exchange Rate" shall have the meaning set forth in Section 24(a)
hereof.
(p) "Exercise Price" shall have the meaning set forth in Section 4 hereof.
(q) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(r) "Group" shall mean two or more Persons acting as a partnership, limited
partnership, syndicate or other group for the purpose of acquiring, holding or
disposing of the Common Stock.
(s) "Person" shall mean any individual, firm, corporation, partnership or
other entity or Group, and shall include any successor (by merger or otherwise)
thereof; provided, however, that when two or more Persons act as a partnership,
limited partnership, syndicate or other Group for the purpose of acquiring,
holding disposing of the Common Stock, such partnership, limited partnership,
syndicate or other Group shall be deemed to be a single Person.
(t) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(u) "Record Date" shall have the meaning set forth in the recital clause of
this Agreement.
(v) "Redemption Date" shall have the meaning set forth in Section 7(a).
(w) "Rights" shall have the meaning set forth in the recital clause of this
Agreement.
(x) "Right Certificate" shall have the meaning set forth in Section 3(a).
(y) "Section 11(a)(ii) Adjustment Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(z) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii)(A), (B), or (C) hereof.
(aa) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(bb) "Share Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(cc) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "Subsidiary" of any Person shall mean any other corporation or other
entity of which a majority of the voting equity securities or voting interests
is owned, directly or indirectly, by such Person, or which is otherwise
controlled by such Person.
(ee) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the meaning set forth in Section 3(b).
(gg) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more co-Rights Agents, the
respective duties of the Rights Agent and any co-Rights Agents shall be as the
Company shall determine.
Section 3. Issue of Right Certificates
(a) Until the earlier of (i) the Close of Business on the 10th calendar day
after the Share Acquisition Date, (ii) the Close of Business on the 10th
Business Day (or such later date as may be determined by action of the Board of
Directors of the Company prior to such time as any Person shall become an
Acquiring Person) after the date of (x) the commencement, by any Person, other
than an Exempt Person, of, or (y) the first public announcement of the intention
of any Person (other than an Exempt Person) to commence, a tender or exchange
offer if, upon consummation thereof, such Person would be an Acquiring Person,
including any such date which is after the date of this Agreement and prior to
the issuance of the Rights (the earliest of such dates being herein referred to
as the "Distribution Date"), the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and the Rights will be transferable only in connection
with the transfer of the underlying shares of Common Stock. The Board of
Directors of the Company may defer the date set forth in clause (ii) in the
preceding sentence to a specified later date or to an unspecified later date to
be determined by action of the Directors of the Company. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Rights Agent will send, by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more certificates, in substantially the form
attached hereto as Exhibit A (the "Right Certificates"), evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided
herein. As of and after the Close of Business on the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a notification of the existence of the Rights, by postage prepaid
mail, to each record holder of the Common Stock as of the Close of Business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date or the earlier of the Redemption Date
or the Final Expiration Date, the Rights will be evidenced by such certificates
for the Common Stock with or without a copy of the Summary of Rights in the form
attached hereto as Exhibit B (the "Summary of Rights") attached thereto, and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the Distribution Date (or earlier redemption,
expiration or termination of the Rights), the transfer of any of the
certificates for the Common Stock outstanding on the Record Date, even without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued after the Record Date, but
prior to the earlier of the Distribution Date, the Redemption Date or the Final
Expiration Date, shall be deemed also to be certificates for Rights, and
Certificates issued after the Record date but prior to the date hereof shall
bear the legend provided for in the Original Agreement Certificates issued after
the date hereof shall, as promptly as possible following the date hereof, bear
the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in an Amended and Restated Shareholder
Rights Agreement between One Price Clothing Stores, Inc. and Continental
Stock Transfer & Trust Company, as Rights Agent, dated as of October 25,
2000 , as amended and restated 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 offices of One
Price Clothing Stores, 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. One
Price Clothing Stores, 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 promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to Acquiring Persons or any
Affiliates or Associates thereof (as defined in the Rights Agreement)
and any subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date or the earlier of the Redemption Date or the Final Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the transfer of
any of such certificates shall also constitute the transfer of the Rights
associated with the 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.
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 each be
substantially in 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, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to Purchase such number of shares
of Common Stock as shall be set forth therein at the price set forth therein
(the "Exercise Price"), but the number of such shares and the Exercise 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 Rights beneficially owned by (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person or (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or of such Affiliate or Associate) to
holders of equity interests in such Acquiring Person (or of such Affiliate or
Associate) or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights, or (B)
a transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of Section 11 hereof, and any Right Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement or adjustment of
any other Right Certificate referred to in this sentence, shall contain the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may become null
and void under certain circumstances as specified in Section 11
of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it becomes
aware of the existence an identity of any Acquiring Person or any Associate or
Affiliate thereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary or any Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificates may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at one of its offices designated as the appropriate place for surrender
of Right Certificates upon exercise or transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b), Section 11, Section 14 and
Section 24 hereof, at any time after the Close of Business on the Distribution
Date, and at, or prior to, the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock (or following an Adjustment Event, other
securities, cash or other assets as the case may be) as the Right Certificate or
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Certificates to be transferred, split up,
combined or exchanged, with the form of assignment and certificate duly
executed, at the office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Right
Certificate 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 of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 11 and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Right Certificate or
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the Company
will execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Final Expiration Date of
Rights.
(a) Subject to Section 11(a)(ii) 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 Xxxxxxx 0, Xxxxxxx 00(x)(xxx) and Section 23(a)), in
whole or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase and the certificate set
forth on the reverse side thereof completed and duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Exercise 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 such surrendered Rights are then exercised, at or prior to
the earlier of (i) the Close of Business on November 15, 2004 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date") or (iii) the time which such Rights
are exchanged as provided in Section 24. Except as set forth in Section 11(a)
hereof and notwithstanding any other provision of this Agreement, any Person who
prior to the Distribution Date becomes a record holder of shares of Common Stock
may exercise all of the rights of a registered holder of a Right Certificate
with respect to the Rights associated with such shares of Common Stock in
accordance with the provisions of this Agreement, as of the date such Person
becomes a record holder of shares of Common Stock.
(b) The Exercise Price for each one-fifteenth share of Common Stock
pursuant to the exercise of a Right shall initially be $1 (equivalent to $15 for
each share of Common Stock), shall be subject to adjustment from time to time
provided in Section 11 and Section 13 hereof, and shall be payable in lawful
money of the United States of America in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate set forth on the
reverse side thereof completed and duly executed, accompanied by payment of the
Exercise Price for the shares (or, following an Adjustment Event, other
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax (as determined by the Rights Agent)
in cash, or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the shares of Common
Stock (or make available, if the Rights Agent is the transfer agent therefor)
certificates for the number of shares of Common Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of shares of Common Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of shares of Common Stock as are to be purchased (in
which case certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company will direct the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depository
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue other
securities of the Company, pay cash or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash or other property are available for distribution by
the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
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 (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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 Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock (and,
following the occurrence of an Adjustment Event, other securities or out of its
authorized and issued shares held in its treasury) the number of shares of
Common Stock (and, following the occurrence of an Adjustment Event, other
securities) that, as provided in this Agreement will be sufficient to permit the
exercise in full of all outstanding Rights; provided, that such action need not
be taken with respect to shares of Common Stock (or other securities) issuable
upon occurrence of an Adjustment Event until the occurrence of such event.
(b) If at the time the Rights become exercisable, the then outstanding
shares of Common Stock are listed on any national or regional securities
exchange or are quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares of Common
Stock (and, following the occurrence of an Adjustment Event, other securities)
reserved for issuance upon such exercise to be quoted on such system or listed
on such exchange, as the case may be.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with this
Agreement, or as soon as required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock or other
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 that at all times meets the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the expiration of
the Rights. The Company will also take such action as may be appropriate under,
and which will ensure compliance with, the securities or blue sky laws of the
various states in connection with the exercisability of the Rights. The Company
may temporarily suspend for a period of time not to exceed 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 such suspension,
the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. Notwithstanding any such
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it will take all such action as
may be reasonably necessary to ensure that all shares of Common Stock (and,
following the occurrence of an Adjustment 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 Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that, subject to Section 6, 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 certificates for shares of Common Stock (or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or in respect of the issuance or delivery of securities in a name other
than that of, the registered holder of the Right Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for securities
in a name other than that of the registered holder upon the exercise of any
Rights until 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 Common Stock is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares of Common
Stock represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Common Stock 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 transfer books of the Company are open. Prior to the exercise of the Right
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 Exercise Price, Number and Kind of Shares or
Number of Rights. The Exercise Price, the number and kind 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 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 the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, except as otherwise
provided in this Section 11(a), the Exercise Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
Common Stock or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Common Stock (or
other capital stock, as the case may be) transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of the Company issuable upon the exercise thereof. If an event occurs
which would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring
Person, at any time after the date of this Agreement, directly or indirectly,
(1) shall merge into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of such merger or
combination and the Common Stock of the Company shall remain outstanding and not
changed into or exchanged for stock or other securities of any other Person or
the Company or cash or any other property, (2) shall, in one or more
transactions, transfer any assets to the Company in exchange (in whole or in
part) for shares of any equity security of the Company or any of its
Subsidiaries or for securities exercisable for or convertible into shares of any
equity security of the Company or any of its Subsidiaries or otherwise obtain
from the Company, with or without consideration, any additional shares of any
equity security of the Company or securities exercisable for or convertible into
shares of any equity security of the Company or any of its Subsidiaries (other
than as part of a pro rata distribution to all holders of Common Stock), (3)
shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from or with, as the case may be, the
Company or any of its Subsidiaries, assets on terms and conditions less
favorable to the Company than the Company would be able to obtain in
arm's-length negotiation with an unaffiliated third Person, (4) shall engage in
any transaction with the Company involving the sale, purchase, lease, exchange,
mortgage, pledge, transfer or other disposition (in one transaction or a series
of transactions), other than incidental to the lines of business currently
engaged in as of the date hereof by the Company and such Acquiring Person, or
Associate or Affiliate, of assets having an aggregate fair market value of more
than $5,000,000, (5) shall receive any compensation from the Company or any of
the Company's Subsidiaries other than compensation for full time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (6) shall receive the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans other than in
the ordinary course of business), advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage provided by the
Company or any of its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become an Acquiring
Person, or
(C) during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions
(whether or not with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its Subsidiaries which is directly or indirectly owned
by any Acquiring Person or any Associate or Affiliate of any Acquiring Person,
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided in this paragraph (ii), shall thereafter have a
right to receive, upon exercise of such Right at the then current Exercise 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 Exercise Price by the then number of one-fifteenth shares of Common
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as the
"Exercise Price" for each Right and for all purposes of this Agreement) by 36%
of the Current Per Share Market Price of the Common Stock (determined pursuant
to Section 11(d)) on the date of the occurrence of any one of the events listed
above in this Section 11(a)(ii) (such number of shares is herein called the
"Adjustment Shares"); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13 shall
apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The
Company shall not enter into any transaction of the kind listed in this Section
11(a)(ii) if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which as
a result of the consummation of such transaction, would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights.
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 any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 11(a),
shall become null and void without any further action and no holder or
beneficial owner 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 ensure that the provisions of this
Section 11(a) and Section 4(b) hereof are complied with, but shall have no
liability to any holder or beneficial owner of Right Certificates or any other
Person as a result of its failure to make any determinations with respect to an
Acquiring Person or any Affiliates and Associates thereof or any transferee of
any of them hereunder.
(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's articles of organization but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), 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 Exercise Price (such excess is herein called the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Exercise Price, (1) cash,
(2) a reduction in the Exercise Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board has deemed to have the same value as
shares of Common Stock (such shares or units of shares of preferred stock are
herein called "Equivalent Common Stock")), (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 the Board based upon the advice of a competent investment banking firm
selected by the Board; provided, however, 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 right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Adjustment Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Exercise Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares or cash have an aggregate value equal
to the Spread. If the Board 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) Adjustment Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
thirty (30) day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first or second sentence of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek an authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For the
purpose of this Section 11(a)(iii), the value of Adjustment Shares shall be the
Current Per Share Market Price of the Common Stock on the Section 11(a)(ii)
Adjustment Date, and the per share or per unit value of any Equivalent Common
Stock shall be deemed to equal the Current Per Share Market Price of the Common
Stock on such date.
(b) If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Stock or Equivalent Common Stock or
securities convertible into Common Stock or Equivalent Common Stock at a price
per share of Common Stock or per share of 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 Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of the Common Stock on such record
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock or Equivalent Common Stock to be offered (and the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Per Share Market Price and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock or Equivalent Common Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of the Company issuable upon the exercise
thereof. In case such subscription price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such consideration
shall be the Current Per Share Market Price thereof determined in accordance
with Section 11(d) hereof. 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 adjustments shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for 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
corporation) of evidences of indebtedness, cash (other than a regular periodic
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or options, subscription rights or
warrants (excluding those referred to in Section 11(b)), the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of Common Stock on such record
date, less the Current Per Share Market Price (as determined pursuant to Section
11(d) hereof) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such options, subscription rights or warrants applicable
to one share of Common Stock and the denominator of which shall be the Current
Per Share Market Price (as determined pursuant to Section 11(d) hereof) per one
share of Common Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Company issuable upon the exercise
thereof. 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 Exercise
Price shall again be adjusted to be the Exercise Price which would be in effect
if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Current Per Share Market Price"
of any share of Common Stock or any other stock or any Right or other security
or any other property shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security (hereinafter
in this Section 11(d)(i) a "Security"), the Current Per Share Market Price on
any date shall be deemed to be the average of the daily closing prices per share
of such Security for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that for
the purpose of computations made pursuant to Section 11(a)(iii) hereof, the
Current Per Share Market Price on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the ten (10) consecutive
Trading Days immediately following such date; and provided further, that in the
event that the Current Per Share Market Price of any Security is determined
during a period following the announcement by the issuer of such Security of (x)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into shares of such Security (other than the Rights)
or (y) any subdivision, combination or reclassification of such Security, and
prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the Current Per Share Market
Price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Securities 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 such Security is
listed or admitted to trading; or, if not listed or admitted to trading on any
national securities exchange, the last quoted price (or, if not so quoted, the
average of the last quoted 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 no bids for such Security are 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 such Security selected by the Board
of Directors of the Company. If on any such date no market maker is making a
market in such Security, the Current Per Share Market Price of such Security on
such date shall be determined reasonably and with good faith to the holders of
the Rights by the Board of Directors of the Company, including, if at the time
of such determination there is an Acquiring Person, a majority of the
Disinterested Directors then in office, or if there are no Disinterested
Directors, by a competent investment banking firm selected by the Board of
Directors, which determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which such Security is listed or admitted to trading is
open for the transaction of business or, if such Security is not listed or
admitted to trading on any national securities exchange, a Business Day.
(ii) If a Security is not publicly held or not so listed or traded,
"Current Per Share Market Price" shall mean the fair value per share of stock or
per other unit of such Security, determined reasonably and with utmost good
faith to the holders of the Rights by the Board of Directors of the Company,
including, if at the time of such determination there is an Acquiring Person, a
majority of the Disinterested Directors then in office, or if there are no
Disinterested Directors, by a competent investment banking firm selected by the
Board of Directors, which determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights.
(iii) In the case of property other than securities, the Current Per Share
Market Price thereof shall be determined reasonably and with utmost good faith
to the holders of Rights by the Board of Directors of the Company, including, if
at the time of such determination there is an Acquiring Person, a majority of
the Disinterested Directors then in office, or if there are no Disinterested
Directors, by a competent investment banking firm selected by the Board of
Directors, which determination shall be described in a statement filed with the
Rights Agent and shall be binding upon the Rights Agent and the holders of the
Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least l% in the Exercise Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Exercise 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
(c), (e), (g) through (k), and (m), inclusive, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of shares (or fractions
thereof) 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 Exercise 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 Exercise Price, that number of shares of Common Stock
(calculated to the nearest one ten-thousandth) obtained by (i) multiplying (x)
the number of shares covered by a Right immediately prior to this adjustment by
(y) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any adjustment of the
Exercise 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 the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Exercise Price in effect immediately prior to adjustment of the Exercise
Price by the Exercise Price in effect immediately after adjustment of the
Exercise Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Exercise 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 Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Exercise 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 Exercise 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
Exercise Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Exercise Price below the then par value, if any, of the number of shares 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 fully paid and nonassessable
shares of Common Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date 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 Exercise 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) Notwithstanding anything in this Section 11 to the contrary, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Stock, issuance wholly
for cash of any shares of Common Stock at less than the Current Per Share Market
Price, issuance wholly for cash of shares of Common Stock or securities which by
their terms are convertible into or exchangeable for shares of 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 it shall not, at any time after
the Distribution Date, (i) consolidate with, (ii) merge with or into, or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person or Persons if (x) at the time
of or immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments outstanding or agreements or arrangements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale the shareholders of a
Person who constitutes, or would constitute, the "Principal Party" for the
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution Date it
will not, except as permitted by Section 23 or Section 24 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
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 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, on or after the Share Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which is
not prohibited by Section 11(o) hereof), 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 is not
prohibited by Section 11(o) hereof) shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the shares of 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) the Company
shall sell, mortgage or otherwise transfer (or one or more of its Subsidiaries
shall sell, mortgage or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which is not prohibited by Section
11(o) hereof)
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided otherwise herein, shall have the right to
receive, upon the exercise thereof at the then current Exercise Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of freely tradeable Common Stock
of the Principal Party (as hereinafter defined in Section 13(b)), free and clear
of rights of call or first refusal, liens, encumbrances or other adverse claims,
as shall be equal to the result obtained by (1) multiplying the then current
Exercise Price by the number of one-fifteenth 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 one-fifteenth shares
of Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Exercise 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 "Exercise Price" for each Right and for all purposes of this Agreement) by
(2) 36% of the Current Per Share Market Price (determined pursuant to Section
11(d) hereof) of the Common Stock of such Principal Party on the date of
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
to permit exercise of all outstanding Rights in accordance with this Section
13(a)) 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 its shares of Common Stock thereafter deliverable upon
the exercise of the Rights. The Company shall not enter into any transaction of
the kind set forth in this subsection if at the time of the consummation of such
transaction there are any options, warrants, rights, conversion or exchange
provisions or securities outstanding or any agreements or arrangements in effect
which, as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. If,
in the case of a transaction of the kind described in clause (z) of the first
sentence of this subsection, the Person or Persons to whom assets or earning
power are sold or otherwise transferred are individuals, then the preceding
sentences of this subsection shall be inapplicable, and the Company shall
require as a condition to such sale or transfer that such Person or Persons pay
to each holder of a Rights Certificate, upon its surrender to the Rights Agent
and in exchange therefor (without requiring payment by such holder), cash in the
amount determined by multiplying the then current Exercise Price by the number
of one-fifteenth shares of Common Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), 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 clause (z) of the first
sentence of 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 Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; and
(y) in case such Person is a Subsidiary, directly or indirectly, or more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value of shares
outstanding.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13, and (y) the Company and each Principal Party and each
other Person who may become a Principal Party as a result of such consolidation,
merger, sale or transfer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section 13(a) and
(b) and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in Section 13(a),
the Principal Party at its own expense will
(i) prepare and file a registration statement under the Securities Act with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain effective (with
a prospectus that at all times meets the requirements of the Securities Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts to list (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation on
NASDAQ; and
(iv) deliver to holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates which comply in all material
respects with the requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. If any Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights, or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there may be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price per Right for the Trading Day
immediately prior to such date on which fractional Rights would have been
otherwise issuable. The closing price for any Trading Day shall be the last sale
price, regular way, or, in case no such sale takes place on such Trading 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 not listed or
admitted to trading on any national securities exchange, the last quoted price
(or, if not so quoted, the average of the last quoted 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 Trading Day no bids for the Rights are
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Rights the current market value of the Rights on
such Trading Day shall be determined reasonably and with utmost good faith to
the holders of the Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value per share of
Common Stock. For purposes of this Section 14(b), the current market value per
share of Common Stock shall be the closing price per share of Common Stock
determined pursuant to Section 11(d) hereof for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Right 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 shall 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.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and with the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
offices of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Sections 6 and 11, the Company and the Rights Agent may deem
and treat the person in whose name a 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 affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as the 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
obligations; provided, however, that the Company must use its reasonable best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a 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 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the 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, recklessness, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with 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, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or in reliance upon
the advice of counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services 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 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Per Share Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
any duly authorized officer of the Company and delivered to the Rights Agent;
and such certificate shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good faith in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
recklessness, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a) hereof) or any adjustment
required under the provisions of Sections 3, 11, 13, 23 or 24 hereof 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 receipt of a certificate describing any such adjustment furnished in
accordance with Section 12 hereof), nor shall it be responsible for any
determination by the Board of Directors of the Company of current market value
of the Rights or Common Stock pursuant to the provisions of Section 14 hereof;
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 Agreement or any Right Certificate or as to whether
any shares of Common Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable; nor shall it be under any obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more of the registered
holders of the Rights Certificates shall furnish the Rights Agent with security
and indemnity to its satisfaction for any costs and expenses which may be
incurred; nor shall it be liable for any failure to perform any duties except as
specifically set forth herein and no implied covenants or obligations shall be
read into this Agreement against the Rights Agent, whose duties and obligations
shall be determined solely by the express provisions hereof.
(f) The Company agrees that it will inform the Rights Agent promptly upon
the Company's determination that a Person has become an Acquiring Person, and
the Rights Agent will not be responsible for making such determination prior to
such notice by the Company. 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 duly authorized
officer of the Company, and is authorized to apply to any such officer 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. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent in accordance
with a proposal included in such application on or after the date specified in
such application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken 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 the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
vested in it or perform any of its duties hereunder either directly 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 attorney or
agent or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided the Rights Agent exercised reasonable care in
the selection or continued employment of such agent.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause (1) or clause (2)
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this agreement upon
thirty (30) days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent (with or without cause) upon thirty (30)
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent Rights
Agent or the registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of North Carolina or the State of South Carolina
(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 North
Carolina or the State of South Carolina), in good standing, which is authorized
under such laws to exercise shareholder services or corporate trust powers and
is subject to supervision or examination by federal or state authority and which
is a duly and validly registered "transfer agent" in accordance with Rule 17 A
of the Exchange Act or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price and the number or kind or class of shares of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this 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 hereafter 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
adjustments shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any time
prior to the earlier of (x) the Close of Business on the tenth day following the
Share Acquisition Date (or, if the Share 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 $.001 per Right, as such
amount may be appropriately adjusted, as determined by the Board of Directors,
to reflect any transaction of the kind described in clauses (A) through (D) of
Section 11(a)(i) occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). In considering whether to
redeem the Rights, the Board of Directors of the Company may consider the best
long-term and short-term interests of the Company, including, without
limitation, the effects of the redemption of the Rights upon employees,
suppliers and customers of the Company or any Subsidiary of the Company and
communities in which offices or other establishments of the Company or any
Subsidiary of the Company are located and all other pertinent factors. The
redemption of the Rights by the Board of Directors may be effective at such
time, on such basis and with such conditions as such Board of Directors in its
sole discretion may establish. In addition to the right of redemption reserved
in the first sentence of this subsection (a) the Board of Directors may redeem
all, but not less than all, of the then outstanding Rights at the Redemption
Price after the occurrence of a Share Acquisition Date, but prior to the
occurrence of any transaction of the kind described in Section 11(a)(ii)(A) or
(C) or Section 13(a), if either (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of Common Stock in
one transaction or series of transactions, not directly or indirectly involving
the Company or any of its Subsidiaries and which did not result in the
occurrence of any transaction of the kind described in Section 11(a)(ii)(A) or
(C) or Section 13(a), as shall result in such Person thereafter being a
Beneficial Owner of 15% or less of the outstanding shares of Common Stock of the
Company, and after such transfer or other disposition there are no other
Acquiring Persons, or (ii) in connection with any transaction of the kind
described in Section 11(a)(ii)(A) or Section 13(a) in which all holders of the
Common Stock of the Company are treated the same and which shall not involve an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, any other
Person in which such Acquiring Person, Affiliate or Associate has any interest
or any other Person acting, directly or indirectly, on behalf of or in
association with such Acquiring Person, Affiliate or Associate. Notwithstanding
any other provision of this Agreement, the Rights shall not be exercisable after
the first occurrence of an event specified in Section 11(a)(ii) until such time
as the Company's right of redemption hereunder has expired.
(b) 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 so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to 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 of value any Rights at any time in
any manner other than that specifically set forth in this Section 23, or in
connection with the purchase, acquisition or redemption of shares of Common
Stock prior to the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Per Share Market Price of the
Common Stock as of the time of redemption) or any other form of consideration
deemed appropriate by the Board.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any time
after any Person shall have become an Acquiring Person, exchange all or any part
of the then outstanding and exercisable Rights (which shall not include Rights
which have become void pursuant to the provisions of Section 11(a)(ii)) for
Common Stock of the Company at an exchange rate of one share of Common Stock per
Right, appropriately adjusted to reflect any transaction specified in clauses
(A) through (D), inclusive, of Section 11(a)(i) occurring after the date hereof
(such exchange rate being hereinafter called the "Exchange Rate"); provided,
however, that the Board of Directors shall not be empowered to effect such an
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, shall have become the
Beneficial Owner of 50% or more of the Common Stock of the Company then
outstanding.
(b) Immediately after any action by the Board of Directors of the Company
directing the exchange of any Rights pursuant to subsection (a) of this Section
24, notice of which shall be filed with the Rights Agent, and without any
further action and without any notice, the right to exercise such Rights shall
terminate and each registered holder of such Rights shall thereafter be entitled
to receive only the number of shares of Common Stock which shall equal the
number of Rights held by such registered holder multiplied by the Exchange Rate.
The Company shall give prompt public notice of any exchange directed pursuant to
such subsection (a); provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such exchange. Within 10
days after action by such Board of Directors directing the exchange of such
Rights, the Company shall mail a notice of exchange to all registered holders of
such Rights at their last addresses appearing 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 received by the registered
holder to whom sent; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of any such exchange. Each
such notice shall state the method by which the exchange of Common Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro rata
among the registered holders of the Rights based upon the number of Rights held
(excluding Rights which have become void pursuant to the provisions of Section
11(a)(ii)); and in such case, a new Rights Certificate evidencing the Rights not
being exchanged shall be prepared and executed by the Company and countersigned
and delivered by the Rights Agent to the registered holder of such Rights
subject to the provisions of Section 14.
(c) In the event that there shall be an insufficient number of shares of
Common Stock authorized but unissued or issued and held in the treasury of the
Company to permit an exchange of Rights directed by the Board of Directors of
the Company, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon such exchange of
the Rights. In any such exchange, the Company may, at its option, substitute
Equivalent Common Stock for some or all of the Common Stock otherwise
exchangeable for the Rights.
(d) The Company shall not be required to issue fractional shares of Common
Stock in exchange for Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company shall pay to the registered holders of the Rights with respect to
which such fractional Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the Current Per Share Market Value of Common Stock
(as determined as provided in Section 11(d)) for the Trading Day immediately
prior to the date of such exchange.
Section 25. Notice of Certain Events
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Common Stock or to make any other distribution to the holders of Common Stock
(other than a regular periodic cash dividend out of earnings or retained
earnings of the Company), or (ii) 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 (iii) to effect any reclassification of its Common Stock (other than
a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with, or to
effect any sale, mortgage or other transfer (or to permit one or more of its
Subsidiaries to effect any sale, mortgage or other transfer), in one transaction
or a series of related transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any other
person (other than a Subsidiary of the Company in one or more transactions each
of which is not prohibited by Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Common Stock, if
any such date is to be fixed, and such notice shall be so given, in the case of
any action covered by clause (i) or (ii) above, at least ten (10) days prior to
the record date for determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Common Stock, whichever
shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each
registered holder of a Right Certificate, in accordance with Section 26 hereof,
a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
One Price Clothing Stores, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Corporate Secretary
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 sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
2 Broadway
Attn: Compliance Department-- Rights Agent One Price Clothing Stores, Inc.
Xxx Xxxx, Xxx Xxxx 00000
Notices or demands authorized by this Agreement to be given or made by the
company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date,
the Company and the Rights Agent shall, if so directed by the Company,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holder
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 shorten or lengthen any time period
hereunder 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, as determined solely by the Company, the interests of the holders of the
Rights or the Right Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, that this Agreement may
not be supplemented or amended pursuant to clause (iii) of this sentence (A) to
lengthen any time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to,
registered holders of the Rights, or (B) to lengthen any time period relating to
when the Rights may be redeemed if at such time the Rights are not then
redeemable. Upon the delivery of such 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. Notwithstanding anything contained 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 Exercise Price or the number of shares (or portions thereof) of Common
Stock for which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determination and Actions by the Board of Directors. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date hereof. The Board of Directors of the
Company (with, where specifically provided for herein, the approval of a
majority of the Disinterested Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for herein,
the approval of a majority of the Disinterested Directors) or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors (or, where specifically provided for herein, by a
majority of the Disinterested Directors) in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject any member of the Board of
Directors or any of the Disinterested Directors to any liability to the holders
of the Rights or to any other person.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person or corporation other than 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) 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 the Agreement would adversely affect the purpose or effect
of the 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, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of South Carolina 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 to be performed entirely within South Carolina.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ATTEST: ONE PRICE CLOTHING STORES, INC.
By: /s/ Xxxxx X'Xxxxxx By /s/ Xxxxx X. Xxxxxx
----------------------------- -----------------------------
Assistant Secretary Vice President &Corporate Secretary
ATTEST: CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
----------------------------- -----------------------------
Assistant Secretary Vice President
Xxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxx
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R-______________ __________ Rights
NOT EXERCISABLE AFTER NOVEMBER 15, 2004 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.] [THE RIGHTS REPRESENTED BY THIS 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). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME VOID UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN SECTION 11(a) OF THE
RIGHTS AGREEMENT.]
RIGHT CERTIFICATE
ONE PRICE CLOTHING STORES, INC.
This certifies that ________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Amended and Restated Shareholder Rights Agreement dated as of October 25,
2000 as amended and restated from time to time (the "Rights Agreement") between
One Price Clothing Stores, Inc. (the "Company"), and Continental Stock Transfer
& Trust Company (the "Rights Agent", which term shall include any successor
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 the Close of
Business on November 15, 2004, at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one-fifteenth of
a fully paid and nonassessable share of common stock, $.01 par value per share
(the "Common Stock"), of the Company, at an exercise price of $1 per
one-fifteenth share (the "Exercise Price") equivalent to $15 for each share),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase and the related Certificate duly executed. 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 Exercise Price per
share set forth above, are the number and Exercise Price as of
_________________, based on the Common Stock 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 Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Affiliate or
Associate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a Person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Right 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 Exercise Price and the number
of shares of Common Stock or 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.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
Company and the Rights Agent and are also available upon written request to the
Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or 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 Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Board of Directors of the Company at
its option at a redemption price of $.001 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors), or
may be exchanged, in whole or in part, for Common Stock.
No fractional shares of Common Stock will be issued upon the exercise
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, as such, of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ____________, 20___.
ATTEST: ONE PRICE CLOTHING STORES, INC.
By:________________________ By:________________________
Secretary President
Countersigned:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
as Rights Agent
-----------------------------
Title
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________ hereby sells, assigns and transfers unto
______________________________________________________ (please print name and
address of transferee) this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
________________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _________________, 20___ ______________________________
Signature
Signature Guaranteed:____________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate __ are __ are not
being transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned __ did __ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: ____________, 20___ ______________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the
Rights represented by the Right
Certificate.)
To: One Price Clothing Stores, 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 the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
__________________________________________________________________________
(Please print name and address)
------------------------------
(Please insert social security
or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
__________________________________________________________________________
(Please print name and address)
------------------------------
(Please insert social security
or other identifying number)
Dated: ____________, 20___
------------------------------------
Signature
Signature Guaranteed:______________________
Exhibit B
ONE PRICE CLOTHING STORES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On November 3, 1994, the Board of Directors of One Price Clothing
Stores, Inc. (the "Company") declared a dividend distribution of one Common
Stock Purchase Right for each outstanding share of Common Stock of the Company
to stockholders of record at the close of business on November 15, 1994, the
terms of which were revised pursuant to an amendment and restatement on October
25, 2000. Each Right entitles the registered holder to purchase from the Company
a one-fifteenth share of Common Stock, $.01 par value per share (the "Common
Stock"), at a cash exercise price of $1 (equivalent to $15 for each share of
Common Stock), subject to adjustment. The description and terms of the Rights
are set forth in an Shareholder Rights Agreement between the Company and
Continental Stock Transfer & Trust Company, as Rights Agent, as amended and
restated from time to time.
Initially, the Rights will not be exercisable, will be attached to all
outstanding shares of Common Stock, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Stock and a Distribution
Date will occur upon the earliest of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") (other than an Exempt Person as defined in the Agreement) has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock
(the date of said announcement being referred to as the "Share Acquisition
Date") and (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a Person or group owning 20% or more of the
outstanding shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (a) the Rights will be evidenced by the Common Stock certificates and
will be transferred with and only with such Common Stock certificates, (b) new
Common Stock certificates issued after November 15, 1994 will contain a notation
incorporating the Shareholder Rights Agreement by reference, and (c) the
surrender for transfer of any certificates for Common Stock will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 15, 2004, unless previously redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of Common Stock as of the close of business
on the Distribution Date and, thereafter, the separate Right Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that (i) a Person acquires beneficial ownership of 20% or
more of the Company's Common Stock, (ii) the Company is the surviving
corporation in a merger with an Acquiring Person or any Affiliate or Associate
and the Common Stock is not changed or exchanged, (iii) an Acquiring Person
engages in one of a number of self-dealing transactions specified in the
Shareholder Rights Agreement, or (iv) an event occurs which results in an
Acquiring Person's ownership interest being increased by more than 1% (e.g., a
reverse stock split), proper provision will be made so that each holder of a
Right will thereafter have the right to receive upon exercise thereof at the
then current exercise price, that number of shares of Common Stock (or in
certain circumstances, cash, property, or other securities of the Company)
having a market value of two times such exercise price. However, the Rights are
not exercisable following the occurrence of any of the events set forth above
until such time as the Rights are no longer redeemable as set forth below.
Notwithstanding any of the foregoing, rights that are or were beneficially owned
by an Acquiring Person shall become null and void.
In the event that, at any time following the Share Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction or (ii) 50% or more of the Company's assets or earning power is
sold, each holder of a Right shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a market value equal to
two times the exercise price of the Right.
At any time after any person becomes an Acquiring Person and prior to
such the time such Person, together with its Affiliates and Associates, becomes
the Beneficial Owner of 50% or more of the outstanding Common Stock, the Board
of Directors of the Company may exchange the Rights (other than Rights which
have become void), in whole or in part, at the exchange rate of one share of
Common Stock per Right, subject to adjustment as provided in the Rights
Agreement.
The exercise price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or securities convertible into Common
Stock at less than the current market price of the Common Stock, or (iii) upon
the distribution to holders of the Common Stock of evidence of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the exercise price will be
required until cumulative adjustments amount to at least 1% of the exercise
price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment, in cash will be made based on the fair market value of the Common
Stock on the last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.001 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors) by the Board of Directors at any time
prior to the close of business on the tenth day after the Share Acquisition Date
or the final expiration Date of the Rights (whichever is earlier). After the
redemption period has expired, the Company's right of redemption may be
reinstated upon the approval of the Board of Directors if an Acquiring Person
reduces his beneficial ownership to 15% or less of the outstanding shares of
Common Stock in transaction or series of transactions not involving the Company
and there are no other Acquiring Persons. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights will terminate
and thereafter the only right of the holders of Rights will be to receive the
redemption price.
Until a Right is exercised, the holder will have no rights as a
stockholder of the Company (beyond those as an existing stockholder), including
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders 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 common stock of an acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement, other than those
relating to the principal economic terms of the Rights, may be amended by the
Board to cure any ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement. Amendments adjusting time periods may, under certain
circumstances, be limited.
A copy of the Shareholder Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Shareholder Rights
Agreement.
