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EXHIBIT 4
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GENESCO INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
Amended and Restated Rights Agreement
Dated as of August 28, 2000
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement originally dated as of August
8, 1990, amended as of August 8, 1990, March 10, 1998 and November 9, 1998, and
amended and restated as of August 28, 2000, between GENESCO INC., a Tennessee
corporation (the "Company"), and FIRST CHICAGO TRUST COMPANY OF NEW YORK (the
"Rights Agent", which term shall include any successor Rights Agent hereunder)
(the "Agreement").
WHEREAS, on August 8, 1990 (the "Rights Dividend Declaration Date") the
Board of Directors of the Company authorized and declared a dividend of one
preferred share purchase right (a"Right") for each Common Share (as hereinafter
defined) of the Company outstanding on August 22, 1990 (the "Record Date"), each
Right representing the right to purchase one one-hundredth of a Preferred Share
(as hereinafter defined), upon the terms and subject to the conditions herein
set forth, and further authorized and directed the issuance of one Right with
respect to each Common Share that 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); and
WHEREAS, the Company and the Rights Agent entered into that certain
Rights Agreement, dated as of August 8, 1990 (the "Initial Rights Agreement");
and
WHEREAS, on August 8, 1990, the Board of Directors, in accordance with
Section 26 of the Initial Rights Agreement determined it desirable and in the
best interest of the Company and its stockholders to modify Section 3(b) of the
Initial Rights Agreement; and
WHEREAS, on March 10, 1998, the Board of Directors, in accordance with
Section 26 of the Initial Rights Agreement, determined it desirable and in the
best interest of the Company and its
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stockholders that the Initial Rights Agreement, as amended, be amended in order
to change the definition of "Acquiring Person" and "Shares Acquisition Date";
and
WHEREAS, on November 9, 1998, the Board of Directors, in accordance with
Section 26 of the Initial Rights Agreement, determined it desirable and in the
best interest of the Company and its stockholders that the Initial Rights
Agreement, as amended, be amended in order to change the definition of
"Acquiring Person" and delete the term "Continuing Director" from the Initial
Rights Agreement, and, consistent therewith, all references to "Continuing
Director" decision-making, such decision-making now being vested in the Board of
Directors; and
WHEREAS, on August 23, 2000, the Board of Directors, in accordance with
Section 26 of the Initial Rights Agreement, determined it desirable and in the
best interest of the Company and its stockholders that the Initial Rights
Agreement, as amended, be amended and restated as follows:
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 (i) any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) which shall be the Beneficial Owner of 15%
or more of the Common Shares then outstanding, or (ii) any Adverse Person. If
the Board of Directors determines that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently and in good faith or without
knowledge of the terms of this Agreement,
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and such Person divests as promptly as practicable (but in no event more than
thirty days following notification of its status as an "Acquiring Person" or
such shorter period as may be determined by the Board of Directors) a sufficient
number of Common Shares so that such Person would no longer, as of the
expiration of such divestiture period, be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company which,
by reducing the number of Common Shares outstanding, increases the proportionate
number of Common Shares beneficially owned by such Person (alone or together
with all Affiliates and Associates) to 15% or more of the Common Shares then
outstanding; provided, however, that if a Person (together with its Affiliates
and Associates) becomes the Beneficial Owner of 15% or more of the Common Shares
then outstanding by reason of share purchases by the Company, and such Person
(or an Affiliate or Associate) subsequently becomes the Beneficial Owner of any
additional Common Shares, then such Person shall be deemed to be an "Acquiring
Person."
(b) "Adverse Person" shall mean any person declared by the Board of
Directors to be an Adverse Person after (i) a determination by the Board of
Directors that such Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of 10% or more of the Common Shares
then outstanding; and (ii) a determination by the Board of Directors, after
reasonable inquiry and investigation (including such consultation, if any, with
such persons as the directors shall deem appropriate), that:
(A) such Beneficial Ownership by such Person is intended to, is
reasonably likely to, or will, either cause the Company to repurchase
the Common Shares beneficially owned
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by such Person or cause pressure on the Company to take action or enter
into a transaction or series of transactions that would provide such
Person with short-term financial gain under circumstances where the
Board of Directors determines that the best long-term interests of the
Company and its shareholders, but for the actions and possible actions
of such Person, would not be served by taking such action or entering
into such transactions or series of transactions at that time; or
(B) such Beneficial Ownership is causing or reasonably likely to
cause a material adverse impact (including, but not limited to,
impairment of relationships with customers or impairment of the
Company's ability to maintain its competitive position) on the business
or prospects of the Company;
provided, however, that the Board of Directors may not declare a Person to be an
Adverse Person if, prior to the time that such Person acquired 10% or more of
the Common Shares, such Person provided to the Board of Directors a written
statement of such Person's acquisition of such Common Shares, together with any
other information reasonably requested of such Person by the Board of Directors,
and the Board of Directors, based on such statement and reasonable inquiry and
investigation (including such consultation, if any, with such persons as the
directors shall deem appropriate), determines to notify and notifies such Person
in writing that it will not declare such Person to be an Adverse Person; and
provided, further, that the Board of Directors may expressly condition in any
manner a determination not to declare a Person an Adverse Person on such
conditions as the Board of Directors may select, including, without limitation,
that such Person shall not acquire more than a specified amount of Common Shares
and/or that such Person shall not take actions inconsistent with the purposes
and intentions disclosed by such Person in the statement
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provided by such Person to the Board of Directors. In the event that the Board
of Directors should at any time determine, upon reasonable inquiry and
investigation (including consultation with such persons as the directors shall
deem appropriate), that such Person has not met or complied with any condition
specified by the Board of Directors, the Board of Directors may at any time
thereafter declare such Person to be an Adverse Person. No delay or failure by
the Board of Directors to declare a Person to be an Adverse Person shall in any
way waive or otherwise affect the power of the Board of Directors subsequently
to declare a Person to be an Adverse Person.
(c) "Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as in effect on
the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own" any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of the
General Rules and Regulations under the Exchange Act (the "Exchange Act
Regulations") as in effect on the date hereof; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (i) as a result of an agreement, arrangement or
understanding, to vote such security if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Exchange Act and the Exchange Act Regulations, and
(B) is not reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report);
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(ii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such other Person) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (i) of this paragraph (d)) or disposing
of such securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) 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, (B) securities
that may be issued upon exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities that may be issued upon exercise of
Rights from and after the occurrence of a Triggering Event, which Rights were
acquired by such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a) or Section 22 (the
"Original Rights") or pursuant to Section 11(a)(i) in connection with an
adjustment made with respect to any Original Rights.
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(e) "Business Day" means any day other than a Saturday, a Sunday, or a
day on which banking institutions in Nashville, Tennessee are authorized or
obligated by law or executive order to close.
(f) "Close of Business" on any given date means 5:00 P.M., Nashville,
Tennessee time, on such date; provided, however, that if such date is not a
Business Day, "Close of Business" means 5:00 P.M., Nashville, Tennessee time, on
the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company, means the
shares of common stock, par value $1.00 per share, of the Company. "Common
Shares," when used with reference, to any Person other than the Company, means
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, of the
Person or Persons which has the power ultimately to control or direct the
management of the first-mentioned Person.
(h) "Distribution Date" has the meaning set forth in Section 3 hereof.
(i) "Exchange Ratio" has the meaning set forth in Section 24(a).
(j) "Final Expiration Date" has the meaning set forth in Section 7
hereof.
(k) "Person" means any individual, partnership, firm, corporation, or
other entity, and includes any successor (by merger or otherwise) of such entity
as well as any syndicate or group deemed to be a person under Section 14(d)(2)
of the Exchange Act.
(l) "Preferred Shares" means shares of Series 6 subordinated serial
preferred stock of the Company, with the rights and preferences set forth in the
amendment to the Company's charter establishing such stock as set forth in
Exhibit A hereto.
(m) "Redemption Date" has the meaning set forth in Section 7 hereof.
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(n) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii).
(o) "Section 13 Event" means any event described in clause (x), (y) or
(z) of Section 13(a).
(p) "Shares Acquisition Date" means the date of the first public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such(unless such date has occurred inadvertently as contemplated by the
second sentence of Section 1(a) in which case the Shares Acquisition Date shall
be postponed until the expiration of the thirty calendar day period or such
shorter time as may be determined by the Board of Directors)."
(q) "Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power, voting securities or other equity interest
is beneficially owned, directly or indirectly, by such Person.
(r) "Triggering Event" means any Section 11(a)(ii) Event or Section 13
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall before the Distribution Date also be
the holders of the Common Shares) 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 desirable upon
ten (10) days written notice to the Rights Agent. The Rights Agent shall have no
duty to supervise and shall in no event be liable for the acts or omissions of
any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
Close of Business on the tenth day after the Shares Acquisition Date or (ii) the
Close of Business on the tenth day (or such later date as may be determined by
action of the Board of Directors before any Person becomes an
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Acquiring Person) after the date of the commencement by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person's becoming the Beneficial Owner
of Common Shares aggregating 15% or more of the then outstanding Common Shares,
including any such date which is after the date of this Agreement and before the
issuance of the Rights (the earlier 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 the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and the
right to receive Right Certificates will be transferable only in connection with
the transfer of Common Shares. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
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(b) On or before September 5, 1990, the Company will send a letter
summarizing the Rights, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof, with or without a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but before the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed, printed or written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in the
Rights Agreement between Genesco Inc. (the "Company")
and First Chicago Trust Company of New York (the
"Rights Agent"), dated August 8, 1990, as amended and
restated as of August 28, 2000 (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 the Company.
Under certain circumstances, as set forth in the
Rights Agreement, such rights will be evidenced by
separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights
Agreement as in effect on the date of mailing,
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without charge after its receipt of a written request
therefor. Under certain circumstances, as set forth
in the Rights Agreement, rights issued to any Person
who becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the
Rights Agreement) whether currently held by or on
behalf of such Person or by any subsequent holder,
may become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. If
the Company acquires any Common Shares after the Record Date but before the
Distribution Date, any Rights associated with such Common Shares shall be deemed
canceled and retired so that the Company is not entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company deems 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 to conform to usage.
Subject to the provisions of Sections 11 and 24 hereof, the Right Certificates
shall entitle the holders thereof to purchase the number of one one-hundredths
of a Preferred Share set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of such
one
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one-hundredths of a Preferred Share, cash or other assets that may be acquired
upon the exercise of each Right, and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant hereto 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 of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights
or Common Shares; or (B) a transfer which the Board of Directors has determined
to be part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of Section 7(e) shall, upon the written
direction of the Board of Directors, contain (to the extent feasible), the
following legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the
Amended and Restated Rights Agreement). Accordingly, this
Right Certificate and the Rights represented hereby may
become null and void in the circumstances specified in
Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. The Company's Chairman
and Chief Executive Officer, its President and Chief Operating Officer or any of
its Vice Presidents shall execute the Right Certificates, either manually or by
facsimile signature, on behalf of the Company
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and the Secretary or an Assistant Secretary of the Company shall attest such
execution, either manually or by facsimile signature. The Rights Agent shall
manually countersign the Right Certificates. No Right Certificate shall be valid
for any purpose unless countersigned. In case any officer of the Company who
executed any of the Right Certificates ceases to hold the office in which
capacity he executed before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates may nevertheless be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who executed such Right
Certificates continued to hold such office. Any Right Certificate may be
executed on behalf of the Company by any person who, at the date of such
execution, is authorized hereunder to execute such Right Certificate, although
as of the date of the execution hereof such person was not so authorized.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept at its principal office books, for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of Right Certificates, the number of Rights
evidenced by each Right Certificate and the date of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or before
the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate (other than a Right Certificate
representing Rights that have become void pursuant to Section 7(e) hereof or
that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged
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for another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Right Certificate surrendered entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall deliver a written
request to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
office of the Rights Agent. 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
the certificate set forth 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) of the Rights
represented by such Right Certificate or Affiliates or Associates thereof as the
Company shall reasonably request; whereupon the Rights Agent shall, subject to
the provisions of Sections 4(b), 7(e) and 14, countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge 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 reasonably satisfactory to them and, at the Company's request, of
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
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Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the lost, stolen, destroyed or mutilated Right Certificate.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share (or, following a Triggering Event, Common Shares, other
securities, cash or other assets, as the case may be) as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on August
28, 2010 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The purchase price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be Ninety
Dollars (90.00), subject to adjustment from time to time as provided in Section
11 or 13 hereof (the "Purchase Price"), and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation organized under
the laws of the United States or any State of the United States in good
standing, which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by federal or state authority
(which corporation
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may be a Subsidiary of the Company) (such institution being the "Depositary
Agent") certificates representing the Preferred Shares that may be acquired upon
exercise of the Rights and shall cause such Depositary Agent to enter into an
agreement pursuant to which the Depositary Agent shall issue receipts
representing interests in the Preferred Shares so deposited. Upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the one
one-hundredths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall, subject to Section 20(j), thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased or (B) requisition from the Depositary Agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the Depositary Agent), (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, 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 Common
Shares, other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a), the Company will make all arrangements
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necessary so that such Common Shares, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii)) may be made in cash or by certified or bank
check or bank draft payable to the order of the Company. The Company hereby
irrevocably authorizes and directs its transfer agents and Depository Agent to
comply with requests made hereunder.
(d) In case the registered holder of any Right Certificate exercises
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 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, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or any such Associate or Affiliate) or to any Person with whom
the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, Common
Shares or the Company or (B) a transfer which the Board of Directors has
determined to be part of a plan, arrangement or understanding which has as a
primary
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purpose or effect the avoidance of this Section 7(e), shall be null and void
without any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) are complied with, but
shall have no liability to any holder of Rights or any other Person as a result
of its failure to make any determination under this Section 7(e) or such Section
4(b) with respect to an Acquiring Person or its Affiliates, Associates or
transferees.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to take any action with
respect to a registered holder upon any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and executed
the certificate following the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise, and (ii)
provided such evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company may
reasonably require.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof, except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled
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Right Certificates to the Company or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation, Authorization and Registration.
(a) The Company shall (i) at all times prior to the Redemption Date or
the Final Expiration Date cause to be reserved and kept available out of its
authorized and unissued shares of preferred stock, the number of Preferred
Shares that, as provided in this Agreement, will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7 and (ii)
at all times following the occurrence of a Section 11(a)(ii) Event, shall so
reserve and keep available a sufficient number of any other securities that may
be required to permit the exercise in full of the Rights pursuant to this
Agreement.
(b) The Company shall take all such action as may be necessary to ensure
that all Preferred Shares (and following the occurrence of a Triggering Event,
any other securities that may be delivered upon exercise of Rights) shall be, at
the time of delivery of the certificates or depositary receipts for such
securities, duly and validly authorized and issued and fully paid and
non-assessable.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) of the consideration to be
delivered by the Company upon exercise of the Rights, or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), a registration statement under the Securities Act of 1933,
as amended (the "Act"), with respect to the securities purchasable upon exercise
of the Rights on an appropriate form (the "Registration Statement"), (ii) to
cause such Registration Statement to become effective as soon
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as practicable after the filing, and (iii) to cause such Registration Statement
to remain effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the earlier to occur of the Redemption
Date or the Final Expiration Date. The Company will also use its best efforts to
comply with the securities 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 statements. Upon any 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 provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite registration or qualification in that
jurisdiction shall have been obtained.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Common Shares 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 the
issuance or delivery of a number of one one-hundredths of a Preferred Share (or,
following the occurrence of a Triggering Event, any other securities, cash or
assets as the case may be) in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates for a number of one one-hundredths of a
Preferred Share (or, following
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the occurrence of a Triggering Event, any other securities, cash or assets as
the case may be) in a name other than that of the registered holder upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares (or, following the occurrence of a Triggering
Event, other securities) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Preferred Shares
(or, following the occurrence of a Triggering Event, other securities)
represented thereby on, and such certificate shall be dated as of, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares (or, following the occurrence of a Triggering Event,
other securities) 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 as of, the next succeeding Business Day on which the Preferred
Shares (or, following the occurrence of a Triggering Event, other securities)
transfer books of the Company are open. Before the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a shareholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote or to receive dividends or other distributions and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
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Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of securities 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) If at any time after the date of this Agreement the Company (A)
declares a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivides the outstanding Preferred Shares, (C) combines the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issues any
shares of its capital stock in a reclassification of the Preferred Shares
(including any reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
Preferred Shares 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 upon payment of the Purchase Price
then in effect the aggregate number and kind of Preferred Shares 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 Preferred Shares transfer books of the
Company were open, he would have owned upon such exercise and have been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Sections 23 and 24 of this Agreement, in the event
any Person becomes an Acquiring Person, other than pursuant to any transaction
set forth in Section 13(a), then
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promptly following the occurrence of such event (a "Section 11(a)(ii) Event")
(except as provided below and in Section 7(e)), each holder of a Right shall
have a right to receive, upon exercise thereof at a price equal to the
then-current Purchase Price, in accordance with the terms of this Agreement and
in lieu of the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y)
dividing that product by 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event (such number of shares being the
"Adjustment Shares"). In the event that any Person becomes an Acquiring Person
while the Rights are outstanding, the Company shall take no action which would
eliminate or diminish the benefits intended to be afforded by the Rights,
provided that, the Company's exercise of its power to redeem the Rights pursuant
to Section 23 hereof or of any other right or power specifically reserved to it
hereunder shall not be deemed an elimination or diminution of such benefits.
(iii) In the event that the number of Common Shares which are authorized
by the Company's charter but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), the Company shall: (A) determine the excess of (x)
the value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value') over (y) the Purchase Price (such excess, the "Spread"), and
(B) make adequate provision to
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substitute for such Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board of Directors of the Company has
deemed to have the same value as Common Shares (such shares of preferred stock,
"common share equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty 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
expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then, if necessary,
shares and/or cash, in an amount equal to the Spread. To the extent that the
Company determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first and/or second sentences 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
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suspended, as well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current market price (as determined pursuant to
Section 11(d)) per Common Share on the Section 11(a)(ii) Trigger Date and the
value of any "common share equivalent" shall be deemed to have the same value as
the Common Shares on such date.
(b) If the Company fixes a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the
Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately before such record date by a fraction
the numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). If such subscription price may
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be paid in part or in whole in a consideration other than cash, the value of
such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares owned by or held for the account of the
Company or any Subsidiary shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) If the Company fixes a record date for a distribution to all holders
of the Preferred Shares (including any distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or the retained earnings of the Company),
assets (other than a dividend payable in Preferred Shares but including any
dividend payable in stock other than Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price (as determined pursuant to Section 11(d)) of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be
such current per share market price (as determined pursuant to
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Section 11(d)) of the Preferred Shares. Such adjustments shall be made
successively whenever such a record date is fixed; and if such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the current per
share market price of any security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the daily closing
prices per share of the Security for the 10 consecutive Trading Days (as
hereinafter defined) immediately before such date; provided, however, that if
the current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
other distribution on such Security payable in shares of such Security or
securities convertible into such Security, or (B) any subdivision, combination
or reclassification of such Security and before the expiration of 10 Trading
Days after the ex-dividend date for such dividend or distribution or the record
date for such subdivision, combination or reclassification then, and in each
such case, the current per share market price shall be appropriately adjusted to
take into account ex-dividend trading. For the purpose of any computation
hereunder, the "current market price" per Common Share on any date shall be
deemed to be the average of the daily closing prices per share of such shares
for the ten consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, if prior to the expiration of
such requisite ten Trading Day period the issuer announces either (A) a dividend
or distribution on such shares payable in such shares or securities convertible
into such shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such shares, then, following the ex-dividend date for such
dividend or distribution or the record date for such subdivision, combination or
reclassification as the case may be, the "current market price" shall be
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properly adjusted to take into account such event. The closing price for each
day shall be, if the Security is listed and admitted to trading on a national
securities 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 such Security is not listed or admitted to trading on any national securities
exchange, the last quoted sales price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date such
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
such Security selected by the Board of Directors. If on any such date no market
maker is making a market in such Security, the fair value of such Security on
such date as determined in good faith by a majority of the Board of Directors
shall be used. If such Security is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes. The term "Trading Day" shall mean regular trading hours on a
Business Day or, if such shares are listed or admitted to trading on any
national securities exchange, a day on which the principal national securities
exchange on which such shares are listed or admitted to trading is open for the
transaction of business.
(ii) For the purpose of any computation hereunder, the current
per share market price of the Preferred Shares shall be determined in accordance
with the method set forth in Section 11(d)(i) (other than the fourth sentence
thereof). If the Preferred Shares are not publicly traded, the
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"current per share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof), multiplied by one hundred. If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, "current per share
market price, shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent. For all purposes of this Agreement, the
current market price of one one-hundredth of a Preferred Share shall be equal to
the current market price of one share of Preferred Shares divided by 100.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one-millionth of a Preferred
Share or ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as result of an adjustment made pursuant to Section 11(a)(ii) or
13(a) hereof, the holder of any Right thereafter exercised becomes entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time
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to time in a manner and on terms as nearly as practicable equivalent to the
provisions with respect to the Preferred Shares contained in Section 11(a), (b),
(c), (e), (g), (h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13, and 14 with respect to the Preferred Shares shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company after any adjustment
made to the Purchase Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of one one-hundredths of a Preferred
Share (or other securities or amount of cash or combination thereof) purchasable
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Preferred Share (or other securities) (calculated to the nearest one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a Preferred Share (or other securities) covered by a Right
immediately before this adjustment by (y) the Purchase Price in effect
immediately before such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share (or other
securities) purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the
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number of one one-hundredths of a Preferred Share (or other securities) for
which a Right was exercisable immediately before such adjustment. Each Right
held of record before such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately before adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, it shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders are 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 are 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 Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
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(j) Regardless of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share (or other securities) issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value of the number of one one-hundredths of a
Preferred Share issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue such fully paid and
non-assessable number of one one-hundredths of a Preferred Share (or other
securities) at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of one one-hundredths of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ββββ or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
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(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such shareholders.
(n) If at any time between the date of this Agreement and the
Distribution Date, the Company (i) declares or pays any dividend on the Common
Shares payable in Common Shares or (ii) effects a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then (A) the number of one one-hundredths of a Preferred Share
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a Preferred Share
so purchasable immediately before such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately before such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall be
made
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successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(p)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(p) hereof) or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions outside the ordinary course of
the Company's business, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(p) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the Person which constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
distributed or otherwise transferred to its stockholders or other persons
holding an equity interest in such Person Rights previously owned by such Person
or any of, its Affiliates and Associates; provided, however, this Section 11(o)
shall not affect the ability of any Subsidiary of the Company to effect a share
exchange with, merge with or into, or sell or transfer assets or earning power
to, any other Subsidiary of the Company.
(p) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 27, take (or permit any Subsidiary to take)
any action if at the time such action is taken
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it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares 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.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If, at any time after a Person has become an Acquiring Person,
directly or indirectly, (x) the Company consolidates with, or merges with and
into, any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(p) hereof) , (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(p)
hereof) merges with and into the Company and the Company is the continuing or
surviving corporation of such merger and, in connection with such merger, all or
part of the Common Shares are changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property or
engages in a consolidation with the Company in which all or part of the Common
Shares are changed into or exchanged for stock or other securities of any other
Person or (z) the Company sells or otherwise transfers (or one or more of its
Subsidiaries sells or otherwise transfers), in one or more transactions, assets
or earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies
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with Section 11(p) hereof (any such event being a "Section 13 Event") then, and
in each such case, proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided in Section 7(e) hereof) shall thereafter
have the right to receive, upon the exercise thereof at a price equal to the
then current Purchase Price, in accordance with the terms of this Agreement and
in lieu of Preferred Shares, such number of validly authorized and issued and
fully paid and non-assessable Common Shares of the Principal Party (as
hereinafter defined) (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share 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
one-hundredths of a Preferred Share for which a Right would be exercisable
hereunder but for the occurrence of such Section 11(a)(ii) Event by the Purchase
Price which would be in effect hereunder but for such first occurrence) and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event all the obligations and duties of the Company under 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 only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares in accordance with Section 9 hereof) in connection with the
consummation of any such transaction to assure that the provisions
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hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) shall be of no further
effect following the first occurrence of any Section 13 Event.
(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), (A) the Person that is
the issuer of any securities into which Common Shares are
converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of Common Shares that
has the highest aggregate current market price (determined
pursuant to Section 11(d)); and (B) if no securities are so
issued, the Person that is the other party to such merger or
consolidation, or, if there is more than one such Person, the
Person the Common Shares of which has the highest aggregate
current market price (determined pursuant to Section 11(d));
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 largest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or
transactions receives the same portion of the assets or
earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of
the assets or earning power cannot be determined, whichever
Person the Common Shares of which has the highest aggregate
current market price (determined pursuant to Section 11(d));
provided, however, that in any such case, (1) if the
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Common Shares of such Person are not at such time and have not
been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act ("Registered
Common Shares"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person
that has Registered Common Shares outstanding, "Principal
Party" shall refer to such other Person; (2) if the Common
Shares of such Person are not Registered Common Shares or such
Person is not a corporation, and such Person is a direct or
indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered
Common Shares outstanding, "Principal Party" shall refer to
the ultimate parent entity of such first-mentioned Person; (3)
if the Common Shares of such Person are not Registered Common
Shares or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Shares
outstanding, "Principal Party" shall refer to whichever of
such other Persons is the issuer of the Registered Common
Shares having the highest aggregate current market price
(determined pursuant to Section 11(d)); and (4) if the Common
Shares of such Person are not Registered Common Shares or such
Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of
such other Persons have Registered Common Shares outstanding,
"Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest stockholders
equity or, if no such ultimate
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parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net
assets.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
its authorized Common Shares which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with Section 13, and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement under the
Securities Act with respect to the Common Shares that may be acquired upon
exercise of the Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the requirement of the
Securities Act) until the Expiration Date, and (C) as soon as practicable
following the execution of such agreement, take such action as may be required
to ensure that any acquisition of such Common Shares upon the exercise of the
Rights complies with any applicable state security or "blue sky" laws; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its certificate of incorporation or bylaws or other instrument
governing its corporate affairs, which provision would have the effect
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of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, Common Shares of such Principal Party at less than the then current market
price per share (determined pursuant to Section 11(d)) or securities exercisable
for, or convertible into, Common Shares of such Principal Party at less than
such then current market price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Shares of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or mergers or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to such fraction of the current market value
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of a whole Right. For purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading Day
immediately before the date on which such fractional Rights would otherwise have
been issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted sales
price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the Board
of Directors shall be used and such determination shall be described in a
statement filed with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) (or other securities) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share) (or other securities). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
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such agreement shall provide that the holders of such depositary receipts have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share (or other securities), the Company
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a Preferred Share
(or other securities). For purposes of this Section 14(b), the current market
value of one one-hundredth of a Preferred Share (or other securities) shall be
the closing price of a Preferred Share (or other securities) (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately before the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), 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 Shares), may, on his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such, Right Certificate and in
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this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) before the Distribution Date, the Rights are transferable only in
connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer;
(c) subject to Section 6(a) and Section 7(f), the Company and the Rights
Agent may deem and treat the person in whose name the Right Certificate (or,
before the Distribution Date, the associated Common Shares 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 Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(e),
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 Person as a
result of its inability to perform any of
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its obligations hereunder by reason of any preliminary or permanent injunction
or any other order, decree or ruling of a court of competent jurisdiction, a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must take reasonable measures to have any
such order, decree or ruling lifted or otherwise reversed.
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 Preferred Shares 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
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
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Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
(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 the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
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
stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
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the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
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(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman and Chief
Executive Officer, the President and Chief Operating Officer, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount
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thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by an act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares, Preferred Shares, or any
other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman and Chief Executive Officer, the President and Chief
Operating Officer, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered by
it in good faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement.
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(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents.
(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, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with the
Company. If such certificate has been completed and signed, the Rights Agent may
assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) and shall not be charged with
any knowledge to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares 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 upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail and to the holders of the Right Certificates by
first-class mail. If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company fails to make such appointment within a period of 30 days after
giving notice of such
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removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing business under the
laws of the United States or of the State of Tennessee (or of any other state of
the United States so long as such corporation is authorized to do business as a
banking institution in the State of Tennessee), in good standing, having an
office in the State of Tennessee, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000.00 or (b) a Subsidiary 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 held
by it hereunder and shall 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 Shares or
Preferred Shares, 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.
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Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the earlier to occur of the Redemption Date or the Final Expiration
Date, the Company (a) shall, with respect to Common Shares so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the person to whom such Right Certificate would be issued, and
(ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination. (a) The Board of Directors of
the Company may at its option, at any time before the earlier of (i) the Close
of Business on the tenth day following the Shares Acquisition Date and (ii) the
Close of Business on the Final Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction
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occurring after the date hereof (such redemption price being the "Redemption
Price'), and the Company may, at its option, by action of the Board of
Directors, pay the Redemption Price either in Common Shares (based on the
"current market price," as defined in Section 11(d), of the Common Shares at the
time of redemption) or cash; provided that if the Company elects to pay the
Redemption Price in Common Shares, the Company shall not be required to issue
fractional Common Shares. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be issuable an amount of
cash equal to the same fraction of the current per share market price of a whole
Common Share. Notwithstanding anything in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares. 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
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redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive a number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly
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give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or common equivalent shares, as such
term is defined in Section 11(b) hereof) for Common Shares exchangeable for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Shares pursuant to the
terms thereof, so that the fraction of a Preferred Share delivered in lieu of
each Common Share shall have the same voting rights as one Common Share.
(d) In the event that there are not sufficient Common Shares or
Preferred Shares authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares or Preferred
Shares for issuance upon exchange of the Rights.
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(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) If the Company proposes (i) to
pay any dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its Preferred Shares
(other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, any Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(p) hereof) or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 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 a Subsidiary of the Company in a transaction which complies with Section
11(p) hereof), or to engage in a share exchange with any other Person (other
than a Subsidiary of the Company in a transaction which
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complies with Section 11(p) hereof) in which all or part of the Common Shares
are changed into or exchanged for stock or securities of, any other Person, (v)
to effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
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, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier; provided, however, no such notice shall be required pursuant to this
Section 25, if any Subsidiary of the Company effects a share exchange or merger
with or into, or effects a sale or other transfer of assets or earnings power
to, any other Subsidiary of the Company.
(b) In case of any events set forth in Section 11(a)(ii) hereof occur,
then the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
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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:
Genesco Inc.
Genesco Park
ββββ ββββββββββββ ββββ
βββββββββ, βββββββββ βββββ-ββββ
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company), as follows:
First Chicago Trust Company of New York
ββ ββββ ββββββββ
βββ ββββ, βββ ββββ βββββ
Attention: Tenders and Exchanges Administration
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, if prior
to the Distribution Date, to the holder of certificates representing Common
Shares) 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 Rights Agent, or, if prior to the Distribution Date on the
registry books of the transfer agent for Common Shares.
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59
Section 27. Supplements and Amendments. Before the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of Common Shares. From and
after the Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights (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 be consistent with, and
for the purpose of fulfilling, the objectives of the Board of Directors adopting
this Agreement; provided, however, that from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of Rights, provided,
however, that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Without limiting the foregoing, the Company may at any time
prior to such time as any Person becomes an Acquiring Person amend this
Agreement to change the Purchase Price hereunder. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement
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or amendment shall be made which changes the Redemption Price, the Purchase
Price, the Expiration Date or the number of one one-hundredths of a Preferred
Share for which a Right is exercisable without the approval of a majority of the
Board of Directors. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of Common
Shares.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares 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 Exchange Act Regulations as in effect on the date
hereof. Except as otherwise specifically provided herein, the Board of Directors
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power (i) to
interpret the provisions of this Agreement, and (ii) to make all determinations
deemed necessary or advisable for the administration of this 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 in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other
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parties, and (y) not subject the Board of Directors or any member thereof to any
liability to the holders of the Rights.
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, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
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.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Tennessee and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, except for Sections 18, 19, 20 and 21,
which for all purposes shall be governed and construed in accordance with the
laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
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Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
GENESCO INC.
By: /s/ βββββ β. ββββββ
----------------------------------------
Name: βββββ β. ββββββ
--------------------------------------
Title: Secretary
-------------------------------------
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By: /s/ ββββββ β'βββββ
----------------------------------------
Name: ββββββ β'βββββ
--------------------------------------
Title: Managing Director
-------------------------------------
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63
EXHIBIT A
FORM OF DESIGNATION OF SERIES SIX
SUBORDINATED SERIAL PREFERRED STOCK
The following is the designation of the rights and preferences of the
Genesco Inc. Series 6 Subordinated Serial Preferred Stock. This designation is
contained in Genesco Inc.'s Restated Charter as amended as of August 28, 2000.
PART C-VII -- SUBORDINATED SERIAL PREFERRED STOCK, SERIES 6
The sixth Series of Subordinated Serial Preferred Stock shall be known
as "Subordinated Serial Preferred Stock, Series 6" (hereinafter referred to as
"Series 6 Serial Preferred Stock"), shall consist of 800,000 shares without
nominal or par value, and shall have in addition to the rights and preferences
granted by law and by Part C-I of this Article Sixth, the following
characteristics, rights and preferences:
(1) DIVIDENDS. (a) Subject to the rights of the holders of any shares
of any class or series of Preferred Stock (or any similar stock) ranking prior
and superior to the Series 6 Serial Preferred Stock with respect to dividends,
the holders of shares of Series 6 Serial Preferred Stock, in preference to the
holders of the Cumulative Preferred Stock, the Employees' Preferred Stock, the
Common Stock and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last days of January,
April, July and October in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share of Series 6 Serial Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series 6 Serial Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series 6 Serial Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the
64
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series 6 Serial Preferred Stock as provided in paragraph (a) of this Section (1)
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series 6 Serial Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series 6 Serial Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series 6 Serial Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series 6
Serial Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series 6 Serial Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
(2) VOTING RIGHTS. The holders of shares of Series 6 Serial Preferred
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series 6 Serial Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series 6 Serial Preferred Stock were entitled
65
immediately prior to such event shall be adjusted (to the nearest whole vote per
share) by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other Charter
Amendment creating a series of preferred stock or any similar stock, or by law,
the holders of shares of Series 6 Serial Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of shareholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series 6 Serial Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
(3) CERTAIN RESTRICTIONS. (a) Whenever quarterly dividends or other
dividends or distributions payable on the Series 6 Serial Preferred Stock as
provided in Section (1) are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
6 Serial Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series 6 Serial
Preferred Stock;
(ii) declare or pay any dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series 6 Serial
Preferred Stock, except dividends paid ratably on the Series 6 Serial
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series 6 Serial
Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior
(both as to
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dividends and upon dissolution, liquidation or winding up) to the Series
6 Serial Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series 6 Serial Preferred Stock, or any shares of stock
ranking on a parity with the Series 6 Serial Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation, unless the Corporation could, under paragraph (a) of
this Section (3), purchase or otherwise acquire such shares at such time and in
such manner.
(4) REACQUIRED SHARES. Any shares of Series 6 Serial Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Subordinated Serial Preferred Stock and may be reissued as part of a new series
of Subordinated Serial Preferred Stock, subject to the conditions and
restrictions on issuance set forth herein, in the Charter or in any amendment
thereto creating a series of Subordinated Serial Preferred Stock or any similar
stock or as otherwise required by law.
(5) LIQUIDATION. Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series 6 Serial Preferred Stock, unless prior thereto the
holders of shares of Series 6 Serial Preferred Stock shall have received $100
per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series 6 Serial Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (ii) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series 6 Serial Preferred
Stock, except distributions made ratably on the Series 6 Serial Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
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Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount per share
determined under clause (i) of the preceding sentence immediately prior to such
event shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(6) CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, share exchange, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case each
share of Series 6 Serial Preferred Stock shall at the same time be similarly
exchanged or changed into shares of such other stock or securities, cash and/or
other property having a value per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate value of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is exchanged or changed.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number 100 set forth in the preceding sentence (as adjusted, if
applicable) shall be adjusted by multiplying such number (or adjusted number) by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(7) NO REDEMPTION OR CONVERSION. The shares of Series 6 Serial
Preferred Stock shall not be redeemable or convertible.
(8) RELATIVE RIGHTS AND PREFERENCES. The Series 6 Serial Preferred
Stock ranks junior to the Series 1, 3 and 4 Serial Preferred Stock and senior to
all other series of Serial Preferred Stock, as to dividends and upon
liquidation, dissolution or winding up.
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EXHIBIT B
[Form of Right Certificate]
Certificate No. __________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF THE REDEMPTION DATE OR THE FINAL
EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT). THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE AMENDED
AND RESTATED RIGHTS AGREEMENT UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE
AMENDED AND RESTATED RIGHTS AGREEMENT). RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT].(1)
Right Certificate
GENESCO INC.
This certifies that _____________________________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the registered holder thereof, subject to the
terms and conditions of the Amended and Restated Rights Agreement dated August
28, 2000 (the "Rights Agreement") between Genesco Inc., a Tennessee corporation
(the "Company"), and First Chicago Trust Company of New York as Rights Agent
(the "Rights Agent," which term shall include any successor Rights Agent under
the Rights Agreement), to purchase from
--------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
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the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to the earlier of the Redemption Date or the
Final Expiration Date (as such terms are defined in the Rights Agreement) at the
office of the Rights Agent or its successor designated for such purpose, one
one-hundredth of a fully paid non-assessable share of Subordinated Serial
Preferred Stock, Series 6, no par value per share (the "Preferred Share"), of
the Company at the Purchase Price initially of $90.00 per one one-hundredth of a
Preferred Share, upon presentation and surrender of this Right Certificate with
the Election to Purchase and related certificate duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one one-hundredths
of a Preferred Share which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per one one-hundredth of a Preferred Share set
forth above shall be subject to adjustment in certain events as provided in the
Rights Agreement.
Upon the occurrence of a Section ll(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement) or, under certain circumstances described in the Rights Agreement, a
transferee of any such Acquiring Person, Associate or Affiliate, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section ll(a)(ii)
Event.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive cash or other assets, all
as provided in the Rights Agreement.
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This Right Certificate is subject to all of the terms and conditions of
the Rights Agreement, which terms and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights Agreement are on
file at the principal office of the Company and are available from the Company
upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Right Certificate or Right Certificates surrendered. If
this Right Certificate shall be exercised in part, the registered holder shall
be entitled to receive, upon surrender hereof, another Right Certificate or
Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate (i) may be redeemed by the Company under certain
circumstances at its option at a redemption price of $0.01 per Right, payable at
the Company's option in cash or in Common Stock of the Company, subject to
adjustment in certain events as provided in the Rights Agreement or (ii) may be
exchanged in whole or in part for shares of Common Stock.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
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No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of a Preferred
Share or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the 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.
Dated as of
-----------------------------.
ATTEST: GENESCO INC.
By:
---------------------------------- -----------------------------------
Title: Title:
---------------------------- ---------------------------------
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By
-------------------------------
Authorized Signature
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[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: .
--------------------------
-----------------------------------
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: .
--------------------------
-----------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
NOTICE
This 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.
This signature must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Right Certificates issued in exchange for this
Right Certificate.
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FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Right Certificate)
To: GENESCO INC.
The undersigned hereby irrevocably elects to exercise
________________________ Rights represented by this Right Certificate to
purchase the Preferred Shares, 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 Units
be issued in the name of and delivered to:
--------------------------------------------------------------------------------
(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:
--------------------------
-----------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated:
--------------------------
-----------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
This signature must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Right Certificates issued in exchange for this
Right Certificate.
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EXHIBIT C
FORM OF
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On August 28, 2000 we amended and restated our existing rights
agreement (commonly known as a "poison pill") which we have amended three times
before. The discussion below describes the amended and restated rights agreement
but is not complete, so you should read it together with the amended and
restated rights agreement which you may obtain from us free of charge.
ISSUANCE OF RIGHTS
Under the amended and restated rights agreement, we will issue the
following stock purchase rights:
- For each share of our common stock outstanding on August 22,
1990 we will issue one right.
Rights were initially issued to shareholders of record as of the close
of business on August 22, 1990. In addition, one right has previously
automatically attached to each share of common stock that we have issued since
August 22, 1990. One right will continue to automatically attach to each share
of our common stock issued from the date of the amended and restated rights
agreement until the time that the rights become exercisable. When exercised,
each right will entitle its holder to purchase from us one one-hundredth of a
share of our Series 6 subordinated serial preferred stock (the "Series 6
Preferred Stock"), at an initial exercise price of $90.00 per one one-hundredth
of a share, subject to adjustment.
INITIAL EXERCISE OF RIGHTS
The rights initially will not be exercisable. Instead, the rights will
be attached to and trade with all shares of our common stock outstanding as of,
and issued after August 22, 1990. The rights will separate from the common stock
and will become exercisable upon the earlier of the following events (the
"distribution date"):
- The close of business on the tenth day following the first
public announcement that a person or group of affiliated or
associated persons has become an "Acquiring Person", defined,
with certain exceptions, as a person or group which acquires
or obtains the rights to acquire beneficial ownership of 15%
or more of our shares of common stock then outstanding, or 10%
or more of such shares if the Board, after reasonable inquiry
and investigation, determines to declare the Acquiring Person
an "Adverse Person" under guidelines set forth in the amended
and restated rights agreement; or
77
- The close of business on the tenth day (or some later day as
our board of directors may determine) following the
commencement of or first public announcement of a tender offer
or exchange offer that could result in a person or group
becoming the beneficial owner of 15% or more of our shares of
common stock then outstanding.
The rights will expire at the close of business on August 28, 2010,
unless we redeem or exchange the rights as described below.
EVIDENCE OF RIGHTS
Until the rights become exercisable:
- The rights will be evidenced by and transferred with our
common stock certificates; and
- New common stock certificates issued after August 28, 2000
will contain a notation incorporating the amended and restated
rights agreement by reference; and
- Any surrender for transfer of any certificates for our common
stock will also constitute the transfer of the rights
associated with the common stock represented by those
certificates.
As soon as practicable after the rights become exercisable, we will
mail out right certificates to the holders of our common stock who are eligible
to receive rights. After we mail them out, the separate right certificates alone
will represent the rights.
EXERCISE AFTER SOMEONE BECOMES AN ACQUIRING PERSON
After public announcement that a person has become an Acquiring Person,
each holder of a right will have the right to receive upon exercise of the
rights that number of shares of common stock (or in our board's discretion, some
other consideration), having a value of two times the then current purchase
price of the right. However, this will not apply to an Acquiring Person or its
associates or affiliates, whose rights will have become null and void.
Under certain circumstances, each holder of a right will have the right
to receive upon exercise of the rights common stock of an acquiring company
having a value equal to two times the then current purchase price of the right.
Each holder of a right will receive the right contemplated by this paragraph in
the event that, at any time on or after the date it is publicly announced that a
person has become an Acquiring Person:
- We directly or indirectly consolidate with, or merge with and
into, any other person, and we are not the continuing or
surviving corporation; or
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- Any person directly or indirectly consolidates with us, or
merges with us and we are the continuing or surviving
corporation of that merger and, in connection with that
merger, all or part of the shares of our common stock are
changed into or exchanged for stock or other securities of any
other person or cash or any other property; or
- We directly or indirectly sell or transfer 50% or more of our
assets or earning power.
Under certain circumstances, the holder of a right will continue to
have this right whether or not that holder has previously exercised its right in
accordance with the first paragraph of this subsection. Rights that are or were
beneficially owned by an Acquiring Person may (under certain circumstances
specified in the rights agreement) become null and void.
EXCHANGE
At any time after a person becomes an Acquiring Person, we may, at the
option of our board, exchange all or part of the outstanding and exercisable
rights for shares of our common stock at an exchange ratio of one common share
per right (adjusted to reflect certain Company capitalization changes). We
generally may not make an exchange after any person becomes the beneficial owner
of 50% or more of our common stock.
ADJUSTMENT
The purchase price and the number of shares of common stock or other
securities or property issuable upon exercise of the rights is subject to
adjustment from time to time to prevent certain types of dilution. With certain
exceptions, the purchase price of the rights will not be adjusted until
cumulative adjustments amount to at least 1% of the purchase price. We are not
obligated to issue fractional shares of common or preferred stock. If we decide
not to issue fractional shares, we will make an adjustment in cash based on the
fair market value of a share on the last trading date prior to the date of
exercise.
REDEMPTION
We may redeem the rights in whole, but not in part, at a price of $0.01
per right (payable in common stock or cash). However, we may only redeem the
rights until the earlier of (1) ten days after public announcement that someone
has become an Acquiring Person or (2) the close of business on August 28, 2010.
Once redeemed, the rights will terminate immediately and the only right
of the holders of the rights will be to receive the redemption price.
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AMENDMENT OF RIGHTS AGREEMENT
Except with respect to certain specified matters, we may amend the
amended and restated rights agreement without the approval of the holders of our
common stock until the distribution date. After the distribution date, we will
only be able to amend the amended and restated rights agreement without the
approval of common stockholders in order to cure any ambiguity, to correct or
supplement defective or inconsistent provisions, to shorten or lengthen any time
period (with certain exceptions), or to make changes that the Company deems
necessary or desirable and which are consistent with the purposes of the amended
and restated rights agreement. However, after someone becomes an Acquiring
Person, no amendment shall be made that adversely affects the interests of the
holder of the rights.
OTHER
Until a right is exercised, the holder will have no rights as a
stockholder of ours as a result of the rights. This means, for example, that
until it is exercised, a right will not entitle its holder to vote or receive
dividends like one of our shareholders. The distribution of the rights will not
be taxable to our shareholders or to us. However, shareholders may, depending
upon the circumstances, recognize taxable income in the event that the rights
become exercisable for shares of common stock, other consideration or for common
stock of an acquiring company.
The discussion above describes the rights and the amended and restated
rights agreement but is not complete, so you should read it together with the
amended and restated rights agreement, which you may obtain from us upon
request.
As of July 31, 2000, 21,677,578 shares of our common stock were issued
and outstanding. Each share of our common stock outstanding on August 22, 1990
and shares of our common stock issued thereafter will receive one right. As long
as the rights are attached to our common stock, we will issue one right for each
share of our common stock issued between August 22, 1990 and the distribution
date. A total of 800,000 shares of Series 6 Preferred Stock have been reserved
for issuance upon exercise of the rights, subject to adjustment.
Each one one-hundredth of a share of Series 6 Preferred Stock that may
be acquired upon exercise of the rights will be nonredeemable and rank junior to
the Company's Series 1, 3 and 4 Serial Preferred Stock.
Each share of Series 6 Preferred Stock will be entitled to receive, an
aggregate dividend of the greater of (1) 100 times the dividend declared per
share of our common stock and (2) a cumulative quarterly dividend of $1.00.
In the event of liquidation, the holder of a share of Series 6
Preferred Stock will be entitled to receive in preference to all junior classes
of our stock, the greater of (1) $1.00 per share and (2) an aggregate payment of
100 times the payment made per share of our common stock.
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Each one one-hundredth of a share of Series 6 Preferred Stock issued to
a holder of our common stock will have one vote, voting together with our common
stock.
In the event of any merger, share exchange or other transaction in
which shares of our common stock are exchanged, each one one-hundredth of a
share of Series 6 Preferred Stock will be entitled to receive the per share
amount paid in respect of each share of common stock.
The rights of holders of the Series 6 Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and share exchanges, are
protected by customary anti-dilution provisions.
Because of the nature of the Series 6 Preferred Stock's dividend,
liquidation and voting rights, the economic value of each one one-hundredth of a
share of Series 6 Preferred Stock that may be acquired upon the exercise of each
right should approximate the economic value of one share of common stock.
The rights may have certain anti-takeover effects. The rights will
cause substantial dilution to a person or group that attempts to acquire us on
terms not approved by a majority of our board of directors unless the offer is
conditioned on a substantial number of rights being acquired. However, the
rights should not interfere with any merger or other business combination
approved by our board of directors since the rights may be redeemed by us at
$0.01 per right at any time on or prior to the tenth day following the
announcement that someone has become an Acquiring Person. Thus, the rights are
intended to encourage persons who may seek to acquire control of us to initiate
such an acquisition through negotiations with our board of directors. However,
the effect of the rights may be to discourage a third party from making a
partial tender offer or otherwise attempting to obtain a substantial equity
position in the equity securities of, or seeking to obtain control of, us. To
the extent any potential acquirers are deterred by the rights, the rights may
have the effect of preserving incumbent management in office.
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