EXHIBIT 1
RIGHTS AGREEMENT
This Rights Agreement, dated as of October 29, 2004, is between Illini
Corporation, an Illinois corporation (the "Company"), and Illinois Stock
Transfer Company, an Illinois corporation, as Rights Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the holders of record of
Common Shares of the Company outstanding on November 9, 2004 of one Right with
respect to each Common Share of the Company outstanding on November 9, 2004, and
has further authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between November 9, 2004 and the
earlier of the Distribution Date, the Redemption Date and the Final Expiration
Date; and
WHEREAS, the Board of Directors of the Company has authorized and directed
that the terms and conditions under which the Rights are to be distributed,
including without limitation those affecting the exercise thereof, the
securities or other property to be acquired thereby and the purchase price to be
paid therefor, shall be set forth in a written agreement between the Company and
a rights agent made for the benefit of the holders of the Rights to the extent
so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the Voting Shares of the Company then outstanding (other than as a
result of a "Permitted Offer") or was such a Beneficial Owner at any time after
the date of this Agreement, regardless of whether such person continues to be
the Beneficial Owner of 15% or more of the then outstanding Voting Shares, but
shall not include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any trustee
of or fiduciary with respect to any such plan when acting in such capacity;
provided, however, that the term "Acquiring Person" shall not include any of the
Persons described in the following clauses (i) through (v) (or any group
comprised solely of such Persons) who or which would be an Acquiring Person but
for this proviso if but only if all securities of the Company beneficially owned
by all such Persons in the aggregate shall constitute less than 30% of the
Voting Shares of the Company then outstanding (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇ (deceased), any
descendant of ▇▇▇▇▇▇ ▇. ▇▇▇▇ (including descendants by adoption and their
descendants), or any spouse, former spouse or surviving spouse of ▇▇▇▇▇▇ ▇. ▇▇▇▇
or any descendants of any such spouse, former spouse or surviving spouse of
▇▇▇▇▇▇ ▇. ▇▇▇▇ (including descendants by adoption and their descendants)
(collectively defined as the "Family Members"); (ii) any trust which is in
existence on the date of this
Agreement and which has been established by one or more Family Members and any
estate of a Family Member who died on or before the date of this Agreement and
which had been established by one or more Family Members and any estate of a
Family Member who died on or before the date of this Agreement (collectively
defined as "Family Entities"); (iii) any estate of a Family Member who dies
after the date hereof, or any trust established after the date hereof by one or
more Family Members or Family Entities, provided that one or more Family
Members, Family Entities or charitable organizations which qualify as exempt
organizations under Section 501(c) of the Internal Revenue Code of 1986, as
amended ("Charitable Organizations"), collectively, are the beneficiaries of at
least 50% of the actuarially-determined beneficial interests in such estate or
trust; (iv) any corporation of which a majority of the voting power is held,
directly or indirectly, by or for the benefit of one or more Family Members,
Family Entities, estates or trusts described in clauses (ii) or (iii) above; and
(v) any partnership or other entity or arrangement of which a majority of one or
more Family Members, Family Entities, estates or trusts described in clauses
(ii) or (iii) above.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" if such Person, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 15% or more of the then outstanding
Voting Shares, (or, in the case of a Person described in clauses (i) through (v)
of the preceding paragraph, becomes the Beneficial Owner of 30% or more of
Voting Shares then outstanding), as a result of the acquisition of Voting Shares
that the Board of Directors has specifically permitted, authorized or approved
in advance, provided, however, that if after such permitted acquisition, such
Person, together with all Affiliates and Associates of such Person, acquires
additional Voting Shares not so specifically permitted, authorized or approved
in advance by the Board of Directors which, together with all Voting Shares
beneficially owned by the Person, together with all Affiliates or Associates of
such Person, totals 15% or more of the Voting Shares then outstanding, (or, in
the case of a Person described in clauses (i) through (v) of the preceding
paragraph, totals 30% or more of the Voting Shares then outstanding), then such
Person shall be deemed to be an Acquiring Person. Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" as the result of an acquisition of
Voting Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of Voting Shares beneficially
owned by such Person to 15% or more of the Voting Shares of the Company then
outstanding, (or, in the case of a Person described in clauses (i) through (v)
of the preceding paragraph, to 30% or more of the Voting Shares then
outstanding); provided, however, that, if a Person shall become the Beneficial
Owner of 15% or more of the Voting Shares of the Company then outstanding (or in
the case of a Person described in clauses (i) through (v) of the preceding
paragraph, 30% or more of the Voting Shares then outstanding), by reason of
share purchases by the Company and shall, after such share purchases by the
Company and at a time when such Person is the Beneficial Owner of 15% or more of
the Voting Shares then outstanding, (or, in the case of a Person described in
clauses (i) through (v) of the preceding paragraph, the Beneficial Owner of 30%
or more of the Voting Shares then outstanding), become the Beneficial Owner of
any additional Voting Shares, then such Person shall be deemed to be an
"Acquiring Person". Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person", as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as
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practicable a sufficient number of Voting Shares so that such Person would no
longer 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 unless and until such Person
subsequently meets the definition of an Acquiring Person.
"Agreement" shall mean this Rights Agreement as hereafter amended from
time to time.
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"own beneficially" any securities which (without duplication):
(i) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of
either Section 13 or 16 of the Exchange Act;
(ii) such Person or any of such Person's Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a
bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting or
disposing of any securities of the Company; provided, however, that,
for purposes of each clause of this definition, a Person shall not
be deemed the Beneficial Owner of, or to own beneficially,
securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase
or exchange; and provided, further, that, for purposes of each
clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, any security as a
result of any agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (1) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
promulgated under the
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Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report).
Notwithstanding anything in this definition to the contrary, the phrase "then
outstanding", when used with reference to a Person's Beneficial Ownership of
securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the State of Illinois or the state wherein the
principal office of the Rights Agent is located are authorized or obligated by
law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., central time,
on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., central time, on the next succeeding Business Day.
"Closing Price", with respect to any security, shall mean the last sale
price, regular way, on a specific Trading Day or, in case no such sale takes
place on such Trading Day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the Nasdaq Stock Market or the New York Stock Exchange or, if such
security is not then listed or admitted to trading on the Nasdaq Stock Market or
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such security is listed or admitted to
trading or, if such security is not then listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the Nasdaq, Inc. automated quotations system or such other system
then in use, or, if on any such Trading Day 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 of the Company. If such security is not publicly held or so
listed or traded, "Closing Price" shall mean the fair value per unit of such
security as determined in good faith by the Board of Directors of the Company,
whose determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall mean shares
of capital stock of the Company which have no preference over any other class of
stock with respect to dividends or assets, which are not redeemable at the
option of the Company and with respect to which no sinking, purchase or similar
fund is provided and shall initially mean the shares of Common Stock, par value
$0.01, of the Company. "Common Shares" when used with reference to any Person
other than the Company shall, if used with reference to a corporation, mean 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, the Person or
Persons which ultimately control such first-mentioned Person and, if used with
reference to any other Person, mean the equity
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interest in such Person (or, if the net worth determined in accordance with
generally accepted accounting principles of another Person (other than an
individual) which controls such first-mentioned Person is greater than such
first-mentioned Person, then such other Person) with the greatest voting power
or managerial power with respect to the business and affairs of such Person.
"Company" shall mean Illini Corporation, an Illinois corporation, and its
successors.
"Company Order" means a written request or order signed in the name of the
Company by its President or a Vice President and by its Secretary or an
Assistant Secretary, and delivered to the Rights Agent.
"Distribution Date" shall mean the earlier of (i) the Close of Business on
the twentieth day following the Shares Acquisition Date or (ii) the Close of
Business on the twentieth day (or such later date as may be determined by action
of the Board of Directors) after the date of 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 trustee of or fiduciary
with respect to any such plan when acting in such capacity) of, or after the
date of the first public announcement of the intent of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any trustee of or fiduciary with
respect to any such plan when acting in such capacity) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming an
Acquiring Person (including, in the case of both (i) and (ii), any such date
that is after the date of this Agreement and before the issuance of the Rights);
provided, however, that an occurrence described in clause (ii) of this
definition above shall not cause the occurrence of the Distribution Date if the
Board of Directors of the Company shall, prior to such twentieth day (or such
later date as described in clause (ii) above), determine that such tender or
exchange offer is spurious or if such tender offer is terminated, unless
thereafter, the Board of Directors of the Company shall make a contrary
determination, in which event the Distribution Date shall occur on the later to
occur of such twentieth day (or such later date as described in clause (ii)
above) and the date of such latter determination.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on October 29,
2014.
"Interested Shareholder" shall mean any Acquiring Person or any Affiliate
or Associate of an Acquiring Person or any other Person in which any such
Acquiring Person, Affiliate or Associate has an interest, or any other Person
acting directly or indirectly on behalf of or in concert with any such Acquiring
Person, Affiliate or Associate.
"Permitted Offer" shall mean a tender or exchange offer which is for all
outstanding Common Shares at a price and on terms determined, before the
purchase of shares under such tender or exchange offer, by at least a majority
of the members of the Board of Directors who are
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not officers of the Company and who are not Acquiring Persons or Affiliates,
Associates, nominees or representatives of an Acquiring Person, to be adequate
(taking into account all factors that such Directors deem relevant, including,
without limitation, prices that could reasonably be achieved if the Company or
its assets were sold on an orderly basis designed to realize maximum value) and
otherwise in the best interests of the Company and its shareholders (other than
the Person or any Affiliate or Associate of such Person on whose basis the offer
is being made) taking into account all factors that such directors may deem
relevant.
"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall mean shares of Series A Junior Participating
Preferred Stock of the Company having the rights and preferences set forth in
the form of Statement of Resolution Establishing Series concerning the Series A
Junior Participating Preferred Stock attached hereto as Exhibit A.
"Purchase Price" shall mean the price at which the holder of a Right may,
subject to the terms and conditions of this Agreement, purchase one
one-hundredth (1/100) of a Preferred Share (which initial price is set forth in
Section 8(b) hereof), as such price shall be adjusted pursuant to the terms of
this Agreement.
"Redemption Date" shall mean the time at which the Rights are redeemed
pursuant to Section 24 herein.
"Redemption Price" shall have the meaning specified in Section 24(b)
herein.
"Right" shall mean one preferred share purchase right which initially
represents the right of the registered holder thereof to purchase one
one-hundredth (1/100) of a Preferred Share upon the terms and subject to the
conditions herein set forth.
"Rights Agent" shall mean Illinois Stock Transfer Company, an Illinois
corporation, and any successor thereto appointed in accordance with the terms
hereof, in its capacity as agent for the Company and the holders of the Rights
pursuant to this Agreement.
"Right Certificate" shall mean a certificate, in substantially the form of
Exhibit B attached to this Rights Agreement, evidencing the Rights registered in
the name of the holder thereof.
"Rights Register" and "Rights Registrar" shall have the meanings specified
in Section 6.
"Shareholder Services Office" means the principal office of the Rights
Agent at which it administers shareholder services business, which, in the case
of Illinois Stock Transfer Company shall, until hereafter changed, be its office
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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"Shares Acquisition Date" shall mean the first date of public announcement
(which for purposes of this definition shall include without limitation a report
filed pursuant to Section 13(d) or Section 16(a) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such;
provided that, if such Person is determined not to have become an Acquiring
Person pursuant to this Section 1, then no Shares Acquisition Date shall be
deemed to have occurred.
"Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the outstanding capital stock or other equity interest
having ordinary voting power in the election of directors or similar officials
is owned, directly or indirectly, by such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase Preferred
Shares in substantially the form attached as Exhibit C to this Agreement.
"Trading Day" shall mean a day on which the Nasdaq Stock Market or the
principal national securities exchange on which any of the Voting Shares of the
Company are listed or admitted to trading is open for the transaction of
business or, if none of the Voting Shares of the Company is listed or admitted
to trading on the Nasdaq Stock Market or any national stock exchange, a Business
Day.
"Voting Shares" shall mean (i) the Common Shares of the Company and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Shares in
respect of any merger or consolidation of the Company, any statutory share
exchange involving the Company, any sale of all or substantially all of the
Company's assets or any liquidation, dissolution or winding up of the Company.
Whenever any provision of this Agreement requires a determination of whether a
number of Voting Shares comprising a specified percentage of such Voting Shares
is, was or will be beneficially owned or has been voted, tendered, acquired,
sold or otherwise disposed of or a determination of whether a Person has offered
or proposed to acquire a number of Voting Shares comprising such specified
percentage, the number of Voting Shares comprising such specified percentage of
Voting Shares shall in every such case be deemed to be the number of Voting
Shares comprising the specified percentage of all the Company's then outstanding
Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any corporation or other
entity all the outstanding capital stock or other equity interests of which
having ordinary voting power in the election of directors or similar officials
(other than directors' qualifying shares or similar interests) are owned,
directly or indirectly, by such Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares of the Company) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior written notice to the
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Rights Agent. The Rights Agent shall have no duty to supervise, and in no event
be liable for, the acts and omissions of any such co-Rights Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) From and after November 9, 2004 until the Distribution Date, (i)
outstanding Rights will be evidenced (subject to the provisions of paragraph (b)
of this Section 3) by the certificates for outstanding Common Shares of the
Company and not by separate Right Certificates, and (ii) the right to receive
Right Certificates will be transferable only in connection with the transfer of
Common Shares of the Company. As soon as practicable after the Rights Agent is
notified in writing by the Company of the occurrence of the Distribution Date,
the Rights Agent will send, by first-class, postage-prepaid mail, to each record
holder of Common Shares of the Company as of the Close of Business on the
Distribution Date, at the address of such holder shown on the stock transfer
records of the Company, a Right Certificate evidencing one Right for each Common
Share so held, subject to adjustment as provided in this Agreement. From and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On November 9, 2004, or as soon thereafter as practicable, the Company
will send a copy of a Summary of Rights, by first-class, postage-prepaid mail to
each record holder of Common Shares of the Company as of the Close of Business
on November 9, 2004, at the address of such holder shown on the stock transfer
records of the Company. With respect to Common Shares outstanding on November 9,
2004, the certificates evidencing such Common Shares shall thereafter also
evidence the outstanding Rights (as such Rights may be amended or supplemented)
distributed with respect thereto until the earlier of the Distribution Date or
the date of surrender thereof to the Company's transfer agent for registration
of transfer or exchange of Common Shares. Until the Distribution Date (or, if
earlier, the Redemption Date or Final Expiration Date), the surrender for
registration of transfer or exchange of any certificate for Common Shares
outstanding as of the Close of Business on November 9, 2004, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
surrender for registration of transfer or exchange of the outstanding Rights
associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after November 9, 2004 and prior
to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
the same number of one one-hundredths (1/100s) of a Preferred Share at the same
Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after November 9, 2004 but prior
to the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date, whether upon registration of transfer or exchange of Common
Shares outstanding on November 9, 2004
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or upon original issue or out of treasury thereafter, shall have impressed on,
printed on, 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 a Rights Agreement between Illini Corporation and
Illinois Stock Transfer Company, dated as of October 29, 2004 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Illini Corporation. 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. Illini
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, Rights issued to or
acquired by any Acquiring Person or any Affiliate or Associate thereof
(each as defined in the Rights Agreement) shall under certain
circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common Shares after
November 9, 2004, but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES. The form of Right Certificates (and
the forms of election to purchase Preferred Shares (or other securities) and of
assignment to be printed on the reverse thereof) shall in form and substance 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 may deem appropriate and as are not inconsistent
with the provisions of this Agreement, as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or trading market on which the Rights
may from time to time be listed or as may be necessary to conform to usage.
Subject to the provisions of Section 23 hereof the Right Certificates, whenever
issued, shall be dated as of the date of authentication thereof, but, regardless
of any adjustments of the Purchase Price or the number of Preferred Shares (or
other securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after November 9, 2004 and prior to the date of such authentication,
such Right Certificates may, on their face, without invalidating or otherwise
affecting any such adjustment, expressly entitle the holders thereof to purchase
such number of Preferred Shares at the Purchase Price per one one-hundredth
(1/100) of a Preferred Share as to which a Right would be exercisable if the
Distribution Date were
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November 9, 2004; no adjustment of the Purchase Price or the number of Preferred
Shares (or other securities) as to which a Right is exercisable, or both,
effected subsequent to the date of authentication of any Right Certificate shall
be invalidated or otherwise affected by the fact that such adjustment is not
expressly reflected on the face or in the provisions of such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company may
execute, and upon Company Order the Rights Agent shall authenticate and send, by
first-class postage-prepaid mail to each record holder of Common Shares of the
Company as of the Close of Business on the Distribution Date, temporary Right
Certificates which are printed, lithographed, typewritten, mimeographed or
otherwise produced substantially of the tenor of the definitive Right
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Right Certificates may determine, as evidenced by their execution
of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Shareholder Services Office
of the Rights Agent, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Right Certificates, the Company shall
execute and the Rights Agent shall authenticate and deliver in exchange therefor
one or more definitive Right Certificates, evidencing a like number of Rights.
Until so exchanged, the temporary Right Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Right
Certificates.
SECTION 5. EXECUTION, AUTHENTICATION AND DELIVERY. The Right Certificates
shall be executed on behalf of the Company by its President or one of its Vice
Presidents, and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Right Certificates may be manual
or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement, the Company may deliver Right Certificates executed
by the Company to the Rights Agent for authentication, together with a Company
Order for the authentication and delivery of such Right Certificates; and the
Rights Agent in accordance with such Company Order shall authenticate and
deliver such Right Certificates as in this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such Right
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Rights Agent by
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manual signature, and such certificate upon any Right Certificate shall be
conclusive evidence, and the only evidence, that such Right Certificate has been
duly authenticated and delivered hereunder.
SECTION 6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. From and
after the Distribution Date and prior to the earlier of the Redemption Date and
the Final Expiration Date, the Company shall cause to be kept at the Shareholder
Services Office of the Rights Agent a Rights Register (a "Rights Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Right Certificates and of transfers of
Rights. The Rights Agent is hereby appointed the registrar and transfer agent
(the "Rights Registrar") for the purpose of registering Right Certificates and
transfers of Rights as herein provided and the Rights Agent agrees to maintain
such Rights Register in accordance with such regulations so long as it continues
to be designated as Rights Registrar hereunder. Upon surrender to the Rights
Agent for registration of transfer of any Right Certificate, the Company shall
execute, and the Rights Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Right Certificates
evidencing a like number of Rights.
At the option of the holder, Right Certificates may be exchanged for other
Right Certificates upon surrender of the Right Certificates to be exchanged to
the Rights Agent. Whenever any Right Certificates are so surrendered for
exchange, the Company shall execute, and the Rights Agent shall authenticate and
deliver, the Right Certificates which the holder making the exchange is entitled
to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
SECTION 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES. If
any mutilated Right Certificate is surrendered to the Rights Agent, the Company
shall execute and the Rights Agent shall authenticate and deliver in exchange
therefor a new Right Certificate of like tenor, for a like number of Rights and
bearing registration number not contemporaneously outstanding.
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If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of rights and bearing a registration number not
contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
SECTION 8. 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 its Shareholder Services Office, together with payment of
the Purchase Price for each one one-hundredth (1/100) of a Preferred Share (or
other securities) as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on the Final Expiration Date, or (ii) the
time of redemption on the Redemption Date.
(b) The Purchase Price for each one one-hundredth (1/100) of a Preferred
Share pursuant to the exercise of a Right shall initially be one hundred thirty
dollars ($130.00), shall be subject to adjustment from time to time as provided
in Sections 12 and 14 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) 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 securities to be purchased and an amount equal to any
applicable transfer tax required to be paid
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by the holder of such Right Certificate in cash, or by certified check or
cashiers check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or other securities) certificates for such number of one one-hundredths
(1/100s) of a Preferred Share (or other securities) as are to be purchased and
registered in such name or names as may be designated by the registered holder
of such Right Certificate or, if appropriate, in the name of a depositary agent
or its nominee, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, and (B) requisition from a depositary agent
appointed by the Company, if any, depositary receipts representing such number
of one one-hundredths (1/100s) of a Preferred Share as are to be purchased and
registered in such name or names as may be designated by such holder (in which
case certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with such depositary agent), and the Company
hereby directs such depositary agent to comply with all such requests, (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 15, (iii) promptly
after receipt of such certificates or depositary receipts registered in such
name or names as may be designated by such holder, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate and (iv) when appropriate, after receipt, promptly deliver such cash
to or upon the order of such holder.
(d) If the registered holder of the Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate evidencing Rights
equal to the Rights remaining unexercised shall be issued by the Rights Agent to
the registered holder of such Right Certificate or to his, her or its duly
authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 8 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth in the reverse side of the Right Certificate surrendered for
exercise, and (2) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
SECTION 9. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer or exchange
shall, if surrendered to the Company or to any of its other agents, be delivered
to the Rights Agent for such purpose and for cancellation or, if surrendered to
the Rights Agent for such purpose, shall be cancelled by it. No Right
Certificates shall be authenticated in lieu of or in exchange for any Right
Certificates cancelled as provided in this Section except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation, and the Rights Agent shall so cancel, any other
Right Certificate purchased or acquired by the Company. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, pursuant to a
Company Order, destroy such cancelled Right Certificates and in such case shall
deliver a certificate of destruction thereof to the Company.
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SECTION 10. RESERVATION AND AVAILABILITY OF SHARES. The Company covenants
and agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights. The Company covenants and agrees
that it will take all such action as may be necessary to ensure that all
Preferred Shares of the Company issued upon exercise of Rights shall (subject to
payment of the Purchase Price) be duly authorized, validly issued, fully paid
and nonassessable.
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 Preferred Shares upon the exercise of a Right. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or in
respect of the issuance or delivery of certificates or depositary receipts for
the Preferred Shares in a name other than, that of the registered holder of the
Right Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
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 thereof) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 11. RECORD DATE. Each Person in whose name any certificate for
Preferred Shares or Common Shares of the Company 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 Common Shares represented thereby, and such certificate
shall be dated the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided however, that, if the date of such surrender
and payment is a date upon which the transfer books of the Company for its
Preferred Shares or Common Shares, as the case may be, are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which such
transfer books of the Company are open.
SECTION 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares of capital stock of
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred
Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
12(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
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kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
thereafter shall be entitled to receive, upon payment of the
Purchase Price for the number of one one-hundredths (1/100s) of a
Preferred Share for which a Right was exercisable immediately prior
to such date, the aggregate number and kind of shares of capital
stock which, if such Right had been duly exercised immediately prior
to such date (at a time when the Preferred Shares transfer books of
the Company were open), such holder would have acquired upon such
exercise and been entitled to receive upon payment or effectuation
of such dividend, subdivision, combination or reclassification;
provided however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon
exercise of one Right. If an event occurs which would require an
adjustment under both Section 12(a)(i) and Section 12(a)(ii), the
adjustment provided for in this Section 12(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required
pursuant to Section 12(a)(ii).
(ii) If any Person shall become an Acquiring Person, each holder of
a Right shall commencing on the Distribution Date (subject to
Section 24 hereof) and ending on the earliest of (i) the Close of
Business on the Final Expiration Date, or (ii) the time of
redemption on the Redemption Date, have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths (1/100s) of a
Preferred Share for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of the Company as shall equal the
quotient obtained by (x) multiplying the then current Purchase Price
by the number of one one-hundredths (1/100s) of a Preferred Share
for which a Right is then exercisable and dividing that product by
(y) 50% of the then current per share market price of the Company's
Common Shares (determined pursuant to Section 12(d)) on the date
such Person became an Acquiring Person; provided, however, that if
the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 14, then
only the provisions of Section 14 shall apply and no adjustment
shall be made pursuant to this Section 12(a)(ii). Subject to Section
24 hereof, if any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any
action which would eliminate or diminish the benefits intended to be
afforded by the Rights.
Notwithstanding any other provision of this Agreement, from
and after the time any Person shall become an Acquiring Person, any
Rights Beneficially Owned by (i) any Acquiring Person (or any
Associate or Affiliate of an Acquiring Person), (ii) a transferee of
an Acquiring Person (or any Affiliate or Associate thereof) who
becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) who becomes a transferee prior to or concurrently
with the Acquiring Person
-15-
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has a continuing
agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
12(a)(ii), shall be null and void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned
by an Acquiring Person whose Rights would be null and void pursuant
to the preceding sentence or by any Associate or Affiliate thereof;
no Right Certificate shall be issued at any time upon the transfer
of any Rights to an Acquiring Person whose Rights would be null and
void pursuant to the preceding sentence or to any Associate or
Affiliate thereof or to any nominee (acting in its capacity as such)
of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be null and void pursuant to the
preceding sentence or to any Associate or Affiliate thereof or to
any nominee (acting in its capacity as such) of such Acquiring
Person, Associate or Affiliate shall be cancelled. The Company shall
use all reasonable efforts to insure that the provisions of this
Section 12(a)(ii) are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring
person or its Affiliates, Associates or transferees under this
Agreement.
(iii) If on or after the Distribution Date there shall not be
sufficient Common Shares authorized but unissued to permit the
exercise in full of all outstanding Rights in accordance with the
foregoing subparagraph (ii), the Company shall take all such action
as is within its power, including without limitation appropriate
action by its Board of Directors, as may be necessary to amend the
Company's articles of incorporation to authorize additional Common
Shares for issuance upon exercise of the Rights. If, notwithstanding
the foregoing, the shareholders shall not approve an amendment to
the Company's articles of incorporation authorizing such additional
Common Shares, the adjustment prescribed in Section 12(a)(ii) shall
not be made but, in lieu thereof each holder of a Right shall have
the right to receive, upon exercise thereof in accordance with the
terms of this Agreement, such number of one one-hundredths (1/100s)
of a Preferred Share as shall equal the quotient obtained by (x)
multiplying the then current Purchase Price by the number of one
one-hundredths (1/100s) of a Preferred Share for which a Right is
then exercisable and dividing that product by (y) 50% of the then
current per share market price of one one-hundredth (1/100) of a
Preferred Share (determined pursuant to Section 12(d)) on the date
such Person became an Acquiring Person.
-16-
(b) If the Company shall fix 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 or exchangeable for Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(together with any additional consideration required upon conversion or exchange
in the case of a security Convertible into or exchangeable for Preferred Shares
or equivalent preferred shares), less than the current per share market price of
the Preferred Shares (determined pursuant to Section 12(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 prior to 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 (together with the aggregate of any
additional consideration required upon conversion or exchange in the case of any
convertible or exchangeable 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 or for which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case all or
part of such subscription or purchase price may be paid in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent. Preferred Shares owned by or held for
the account of the Company or any of its Subsidiaries shall not be deemed
outstanding for the purpose of any computation described in this Section 12(b).
The adjustment described in this Section 12(b) shall be made successively
whenever such a record date is fixed and, if none of such rights, options or
warrants is 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 shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 12(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Shares (determined pursuant
to Section 12(d)) on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
-17-
Preferred Shares; provided however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon the exercise of one
Right. 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 then 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 the Common Shares on any date shall be deemed
to be the average of the daily Closing Prices per share of such
Common Shares for the 30 consecutive Trading Days immediately prior
to such date; provided however, that, if the issuer of such Common
Shares shall announce (A) a dividend or distribution on such Common
Shares payable in such Common Shares or securities convertible into
such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification, shall occur during
such period of 30 Trading Days, then, and in each such case, the
current per share market price of the Common Shares shall be
appropriately adjusted to reflect the current market price per
Common Share equivalent.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph
(i) of this Section 12(d). If the current per share market price of
the Preferred Shares cannot be determined in the manner provided
above, the "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 (determined in the manner provided above)
multiplied by one hundred.
(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
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one ten-millionth of a Preferred Share, as the case may
be, and references herein to the "number of one one-hundredths (1/100s) of a
Preferred Share" (or similar phrases) shall be construed to include fractions of
one one-hundredth (1/100) of a Preferred Share. Notwithstanding the first
sentence of this Section 12(e), each adjustment required by this Section 12
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 thirtieth day preceding
the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 12(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Shares, thereafter
the number of such other shares so receivable
-18-
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in this Section 12, and the provisions of this
Agreement, including without limitation Sections 8, 10, 11 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 subsequent to any
adjustment made to the Purchase Price hereunder shall, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths (1/100s) of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 12(i), upon each adjustment of the Purchase Price pursuant to Section
12(b) or 12(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price per one one-hundredth (1/100) of a Preferred Share, that number
of one one-hundredths (1/100s) of a Preferred Share obtained by (i) multiplying
(x) the number of one-hundredths (1/100s) of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of one one-hundredths (1/100s) of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths (1/100s) of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. Until such record date, however, any
adjustment in the number of one one-hundredths (1/100s) of a Preferred Share for
which a Right shall be exercisable made as required by this Agreement shall
remain in effect. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 12(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 15 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the
-19-
date of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and authenticated in the manner provided for herein and shall
be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths (1/100s) of a Preferred Share 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
(1/100s) 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 one one-hundredth (1/100) of the amount of consideration
per Preferred Share determined by the Board of Directors of the Company to be
capital, or below one one-hundredth (1/100) of the par value, if any, per
Preferred Share issuable upon exercise of the Rights, the Company agrees to take
such corporate action as is within its power, including without limitation
appropriate action by its Board of Directors, and which is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-hundredth (1/100) of a Preferred Share at
such adjusted Purchase Price.
(l) In any case in which this Section 12 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 the
Preferred Shares or other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares or 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 ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Preferred Shares, 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 subsection (b) of this Section 12, hereafter effected by the
Company to holders of its Preferred Shares shall not be taxable to such
shareholders.
(n) If at any time prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares payable in Common Shares or
(ii) effect a subdivision or combination 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 in any
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such case (i) the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision or combination shall
be adjusted by multiplying such Purchase Price 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 (ii) the number of Rights outstanding
immediately after such event shall be adjusted, either through cancellation of
outstanding Rights or through distribution of additional Rights (but without
duplication of the Company's obligations under Section 3(c)), so that the
certificate evidencing each Common Share outstanding immediately after such
event shall also evidence the associated Right to purchase the same number of
one one-hundredths (1/100s) of a Preferred Share as to which a Right would have
entitled the holder thereof to purchase immediately prior to such event. The
adjustment provided for in this Section 12(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision or
combination is effected. If an event occurs which would require an adjustment
under Section 12(a)(ii) and this Section 12(n), the adjustments provided for in
this Section 12(n) shall be in addition and prior to any adjustment required
pursuant to Section 12(a)(ii).
SECTION 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares of
the Company and the Preferred Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of record of a Right Certificate in
accordance with Section 28 hereof.
SECTION 14. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) If, on or following the Shares Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, merge with and into, or
engage in a statutory share exchange with, any Interested Shareholder or, if in
such merger, consolidation or share exchange all holders of Common Shares are
not treated alike, any other Person, (b) the Company shall consolidate with,
merge with, or engage in a statutory share exchange with, any Interested
Shareholder or, if in such merger, consolidation or share exchange all holders
of Common Shares are not treated alike, any other Person, and the Company shall
be the continuing or surviving corporation of such consolidation, merger or
share exchange (other than, in a case of any transaction described in (a) or
(b), a merger, consolidation or share exchange which would result in all of the
Voting Shares outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into securities of the
surviving entity) all of the Voting Shares of the Company or such surviving
entity outstanding immediately after such merger, consolidation or share
exchange and the holders of such securities not having changed as a result of
such merger or consolidation), or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of two or more related transactions, assets of
the Company or its Subsidiaries which constitute more than 50% of the assets or
which produce more than 50% of the earning power of the Company and its
Subsidiaries (taken as a whole) to any Interested Shareholder or Shareholders
or, if in
-21-
such transaction all holders of Common Shares are not treated alike, any other
Person (other than the Company or any Subsidiary of the Company in one or more
transactions each of which does not, except as permitted by Section 24 or 29,
have the purpose of, or reasonably foreseeably have the effect to, materially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights), then, and in each such case, the Company shall, as a condition to
engaging in any such transaction, make or cause to be made proper provision so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement and in lieu of Preferred Shares, such number of
freely tradable Common Shares of the Principal Party (as defined below), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the quotient obtained by (X) multiplying the then
current Purchase Price by the number of one one-hundredths (1/100s) of a
Preferred Share for which a Right is then exercisable (without taking into
account any adjustment previously made pursuant to Section 12(a)(ii)) and
dividing that product by (Y) 50% of the current per share market price of the
Common Shares of such Principal Party (determined pursuant to Section 12(d)) on
the date of consummation of such consolidation, merger, share exchange, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, share exchange, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company", as used herein, shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 12 shall apply only to such Principal Party following such
consolidation, merger, share exchange, sale or transfer; and (iv) such Principal
Party shall take such steps (including without limitation the reservation of a
sufficient number of its Common Shares in accordance with Section 10) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise of
the Rights. The Company shall not enter into any transaction of the kind
referred to in this Section 14 if at the time of such transaction there are
outstanding any rights, warrants, instruments or securities or any agreement or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. For the purposes of this Section 14, 50% of the assets
of the Company and its Subsidiaries shall be determined by reference to the book
value of such assets as set forth in the most recent consolidated balance sheet
of the Company and its Subsidiaries (which need not be audited) and 50% of the
earning power of the Company and its Subsidiaries shall be determined by
reference to the mathematical average of the operating income resulting from the
operations of the Company and its Subsidiaries for the two most recent full
fiscal years as set forth in the consolidated and consolidating financial
statements of the Company and its Subsidiaries for such years; provided,
however, that, if the Company has, during such period, engaged in one or more
transactions to which purchase accounting is applicable, such determination
shall be made by reference to the pro forma operating income of the Company and
its Subsidiaries giving effect to such transactions as if they had occurred at
the commencement of such two-year period.
(b) "Principal Party" shall mean:
-22-
(i) in the case of any transaction described in clause (a) or (b) of
the first sentence of Section 14(a), the Person that is the issuer
of any securities into which Common Shares of the Company are
converted in such merger, consolidation or share exchange, and if no
securities are so issued, the person that is the surviving party to
such merger, consolidation or share exchange (including, if
applicable, the Company if it is the surviving corporation); and
(ii) in the case of any transaction described in clause (c) of the
first sentence of Section 14(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
however, that in any of the foregoing cases, (1) if the Common
Shares of such Person are not at such time and have not been
continuously over the preceding 12 month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another person the Common Shares of which are
and have been so registered, "Principal Party" shall refer to such
other Person, (2) in case such Person is a Subsidiary, directly or
indirectly or more than one Person, the Common Shares of two or more
of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common
Shares having the greatest aggregate market value; and (3) in case
such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2)
above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary"
of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section
14 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, share
exchange, 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
this Section 14 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent an agreement supplemental
to this Agreement providing for the terms set forth in, and complying with the
provisions of, this Section 14 and further providing that, as soon as
practicable after the date of any consolidation, merger, share exchange, sale or
transfer mentioned in Section 14(a), the Principal Party at its own expense
shall:
(i) prepare and file a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the
Rights and the securities purchasable upon exercise of the Rights on
an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities
Act) until the Final Expiration Date;
-23-
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate;
and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 under the Securities
Exchange Act of 1934, as amended. The provisions of this Section 14
shall similarly apply to successive mergers, consolidations, share
exchanges, sales or other transfers.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue or distribute Right
Certificates which evidence fractional Rights. If, on the Distribution Date or
thereafter, as a result of any adjustment effected pursuant to Section 12 or
otherwise hereunder, a Person would otherwise be entitled to receive a Right
Certificate evidencing a fractional Right, the Company shall, in lieu thereof,
pay or cause to be paid to such Person an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purpose of this
Section 15(a), the current market value of a whole Right shall be the Closing
Price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
(1/100) of a Preferred Share) 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 (1/100) of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth (1/100)
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 such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the Preferred
Shares. If, on the Distribution Date or thereafter, as a result of any
adjustment effected hereunder in the number of one one-hundredths (1/100s) of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-hundredth (1/100) of a Preferred Share, the Company
shall, in lieu thereof, pay to such Person at the time such Right is exercised
as herein provided an amount in cash equal to the same fraction (which is not an
integral multiple of one one-hundredth (1/100) of a Preferred Share) of the
current market value of one Preferred Share. For purposes of this Section 15(b),
the current market value of a Preferred Share shall be the Closing Price of a
Preferred Share for the Trading Day immediately prior to the date of such
exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) occur, the
Company shall not be required to issue fractions of Common Shares upon exercise
of the Rights or to distribute certificates which evidence fractional Common
Shares. If after any such adjustment, a
-24-
Person would otherwise be entitled to receive a fractional Common Share of the
Company upon exercise of any Right Certificate, the Company shall, in lieu
thereof, pay to such Person at the time such Right is exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Common Share. For purposes of this Section 15(c), the current
market value of a Common Share shall be the Closing Price of a Common Share for
the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance thereof expressly waives his,
her or its right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
SECTION 16. RIGHTS OF ACTION.
(a) All rights of action in respect of the obligations and duties owed to
the holders of the Rights under this Agreement are vested in the registered
holders of the Rights; and, without the consent of the Rights Agent or of the
holder of any other Rights, any registered holder of any Rights may, in his, her
or its own behalf and for his, her or its own benefit, enforce, and may
institute and maintain any suit, action or proceeding, judicial or otherwise,
against the Company to enforce, or otherwise to act in respect of such holder's
right to exercise such Rights in the manner provided in the Right Certificate
evidencing such Rights and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
(b) No right or remedy herein conferred upon or reserved to the registered
holder of Rights is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy, whether hereunder or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
(c) No delay or omission of any registered holder of Rights to exercise
any right or remedy accruing hereunder shall impair any such right or remedy or
constitute a waiver of any default hereunder or an acquiescence therein. Every
right and remedy given hereunder or by law to such holders may be exercised from
time to time, and as often as may be deemed expedient, by such holders.
(d) Holders of Rights shall be entitled to recover the reasonable costs
and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement, provided that they prevail in such
action as determined by the final decision of a court of competent jurisdiction
after all appeals or the time therefore has expired. Holders of Rights shall be
deemed to have prevailed in the action if such final decision determines that
the holders of Rights may exercise the Rights.
-25-
SECTION 17. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares of the Company,
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the Shareholder
Services Office of the Rights Agent duly endorsed or accompanied by a proper
instrument of transfer, and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
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, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder,
as such, of any Right (whether or not then evidenced by a Right Certificate)
shall be entitled to vote, receive dividends or be deemed for any purpose the
holder of Preferred Shares, Common Shares of the Company 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 any such holder, as such, any of the
rights of a shareholder of the Company, including without limitation any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 26) or to receive dividends or
subscription rights until the Right or Rights evidenced by such Right
Certificate shall have been exercised (or mandatorily redeemed and exchanged) in
accordance with the provisions hereof.
SECTION 19. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against any loss, liability or expense, incurred without 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.
-26-
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 Preferred Shares, Common Shares of the Company or other
securities of the Company, Company Order, 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 executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound.
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter 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 of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken 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 or any other
Person only for its gross negligence, bad faith or willful misconduct. Anything
in this Agreement to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including, but not limited to, lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(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 authentication thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not have any responsibility with respect to the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or with respect to the validity or
execution of any Right Certificate (except its authentication 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
-27-
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 12(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Sections 3, 12, 14 and 24, or the ascertainment 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 any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares to be issued pursuant to
this Agreement or any Right Certificates or as to whether any Preferred Shares
or Common Shares will, when issued, be duly authorized, validly issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss of the Company resulting from any such act, default, bad
faith, neglect, gross negligence or willful misconduct provided reasonable care
was exercised in the selection and continued employment thereof.
SECTION 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business or shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights
-28-
Agent under the provisions of Section 22. If at the time such successor Rights
Agent shall succeed to the agency created by this Agreement any of the Right
Certificates shall have been authenticated but not delivered, any such successor
Rights Agent may adopt the authentication of the predecessor Rights Agent and
deliver such Right Certificates so authenticated, and, if at that time any of
the Right Certificates shall not have been authenticated, any successor Rights
Agent may authenticate 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.
If at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate 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 22. 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
for the Common Shares of the Company and the 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 for the Common Shares of the Company
and the Preferred Shares by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares), then any
registered holder of a Right Certificate (or, prior to the Distribution Date, of
Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, which is authorized under such laws to exercise corporate trust or
shareholder services 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 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent for the Common Shares of the
Company and the Preferred Shares, and
-29-
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 23. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at is option, issue new Rights 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 per share and the number or kind or class of shares or other
securities 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 before the earlier of
the Redemption Date and the Final Expiration Date, the Company (1) 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, notes or debentures issued by the Company,
and (2) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (a) the Company shall not be obligated to issue any such Right
Certificate 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 (b) no 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 24. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of Directors of the
Company pursuant to paragraph (b) of this Section 24, but shall not be redeemed
in any other manner.
(b) The Board of Directors of the Company may, at its option, at any time
prior to the earlier of (i) the Close of Business on the twentieth day following
the Shares Acquisition Date, or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.01 per
Right then outstanding, appropriately adjusted to reflect any adjustment in the
number of Rights outstanding pursuant to Section 12(a)(i) herein (such
redemption price being hereinafter referred to as the "Redemption Price"). Any
such redemption of the Rights by the Board of Directors may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. The Company may, at its option, pay the
Redemption Price either in Common Shares (based on the "current per share market
price," as defined in Section 12(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 any
fractional Common Shares and the number of Common Shares issuable to each holder
of Rights shall be rounded down to the next whole share.
-30-
(c) The right of the registered holders of Right Certificates to exercise
the Rights evidenced thereby or, if the Distribution Date has not theretofore
occurred, the inchoate right of the registered holders of Rights to exercise the
same shall, without notice to such holders or to the Rights Agent and without
further action, terminate and be of no further force or effect effective as of
the time of adoption by the Board of Directors of the Company of a resolution
authorizing and directing the redemption of the Rights pursuant to paragraph (b)
of this Section 24 (or, alternatively, if the, Board of Directors qualified such
action as to time, basis or conditions, then at such time, on such basis and
with such conditions as the Board of Directors may have established pursuant to
such paragraph (b)); thereafter, the only right of the holders of Rights shall
be to receive the Redemption Price. The Company shall promptly give public
notice of any redemption resolution pursuant to paragraph (b) of this Section
24; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Notice of such
redemption shall be given to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common 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 redemption shall state
the method by which the payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates may
acquire (other than, in the case of such Affiliates and Associates, in their
capacity as holders of Common Shares of the Company), redeem or purchase for
value any Rights at any time in any manner other than as specifically set forth
in this Section 24, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
SECTION 25. 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 12(a)(ii) 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 of the Company 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 25
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to
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the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange 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 12(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 25, the Company shall take all such action as may
be necessary to authorize additional Common Shares for issuance upon exchange of
the Rights. In the event the Company shall, after good faith effort, be unable
to take all such action as may be necessary to authorize such additional Common
Shares, the Company shall substitute, for each Common Share that would otherwise
be issuable upon exchange of a Right, a number of Preferred Shares or fraction
thereof such that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such Preferred Shares or
fraction thereof.
(d) 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 per share market price of a whole Common Share. For the purposes
of this Section 25(d), the current per share market price of a Common Share
shall be the closing price of a Common Share (as determined pursuant to Section
12(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 25.
SECTION 26. NOTICE OF CERTAIN EVENTS. If the Company shall on or after the
Distribution Date, propose (a) to pay any dividend or other distribution payable
in stock of any class of the Company or any Subsidiary of the Company to the
holders of its Preferred Shares, (b) to distribute 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, (c) to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (d) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation with, merger into or with or statutory
share exchange with, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (determined as provided in Section 14 herein) to,
any other Person (other than the Company or a Wholly-Owned Subsidiary or
Wholly-Owned Subsidiaries
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of the Company), (f) to effect the liquidation, dissolution or winding up of the
Company or (g) if the Rights have theretofore become exercisable with respect to
Common Shares pursuant to Section 12(a)(ii) herein, to declare or pay any
dividend or other distribution on the Common Shares payable in Common Shares or
in stock of any other class of the Company or any Subsidiary of the Company or
to effect a subdivision or combination 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 28 hereof, notice of such proposed action, which shall
specify the date of authorization by the Board of Directors of the Company, and
record date for, such stock dividend or such distribution of rights or warrants
or the date on which such reclassification, consolidation, merger, share
exchange, sale, transfer, liquidation, dissolution, winding up, subdivision or
combination is to take place and the date of participation therein by the
holders of the Common Shares of the Company or the Preferred Shares, or both, if
any such date is to be fixed. Such notice shall be so given in the case of any
action covered by clause (a), (b) or (g) above at least 20 days prior to the
record date for determining holders of the Preferred Shares or of the Common
Shares of the Company, as the case may be, for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Preferred Shares or Common Shares of the Company, as the case may
be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
12(a)(ii) hereof.
SECTION 27. SECURITIES LAWS REGISTRATIONS. To the extent legally required,
the Company agrees that it will prepare and file no later than the Distribution
Date, and will use its best efforts to cause to be declared effective, a
registration statement under the Securities Act of 1933, as amended, registering
the offering, sale and delivery of the Preferred Shares issuable upon exercise
of the Rights, and the Company will, thereafter, use its best efforts to
maintain such registration statement (or another) continuously in effect so long
as any Rights remain outstanding and exercisable with respect to Preferred
Shares. Should the Rights become exercisable with respect to securities of the
Company or one of its Subsidiaries other than Preferred Shares, the Company
agrees that it will, to the extent legally required, promptly thereafter prepare
and file, or cause to be prepared and filed, and will use its best efforts to
cause to be declared effective, a registration statement under such Act
registering the offering sale and delivery of such other securities and the
Company will, thereafter, use its best efforts to maintain such registration
statement (or another) continuously in effect so long as any outstanding Rights
are exercisable with respect to such securities. The Company further agrees to
use its best efforts, from and after the Distribution Date, to qualify or
register for sale the Preferred Shares or other securities of the Company or one
of its Subsidiaries issuable upon exercise of the Rights under the securities or
"blue sky" laws (to the extent legally required thereunder) of all jurisdictions
in which registered holders of Right Certificates reside determined by reference
to the Rights Register.
-33-
SECTION 28. 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:
Illini Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 22 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:
Illinois Stock Transfer Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
SECTION 29. SUPPLEMENTS AND AMENDMENTS. Before the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of certificates representing Rights or 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 Right Certificates in order (1) to cure any ambiguity, (2) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (3) to shorten or lengthen any
time period under this Agreement, or (4) to change or supplement the provisions
under this Agreement in any manner that the Company deems necessary or desirable
and that shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (3) 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. Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in
-34-
compliance with the terms of this Section 29, the Rights Agent shall execute
such supplement or amendment, provided that such supplement or amendment does
not adversely affect the rights or obligations of the Rights Agent under Section
19 or 20 of this Agreement. Before the Distribution Date, the interests of the
holders of the Rights shall be deemed coincident with the interests of the
holders of Common Shares.
SECTION 30. 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 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights (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 Rights (and, prior
to the Distribution Date, the Common Shares).
SECTION 32. 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 33. 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 Illinois and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 34. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original and all such counterparts shall together constitute but one and
the same instrument.
SECTION 35. 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.
SECTION 36. DETERMINATIONS AND ACTIONS BY THE BOARD. 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, will be made in accordance with Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of Directors of
the Company will have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including without limitation
the right and power to (i) interpret the provisions of this Agreement
-35-
and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including any determination as to whether
particular Rights shall have become void). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (B) below,
any omission with respect to any of the foregoing) that are done or made by the
Board of Directors of the Company in good faith will (A) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (B) not subject the Board of Directors of the Company to any
liability to any Person, including without limitation the Rights Agent and the
holders of such Rights.
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.
ILLINI CORPORATION.
By /s/▇▇▇▇▇▇ ▇. Black
-----------------------------------------
▇▇▇▇▇▇ ▇. Black, Chairman
Attest:
/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary
ILLINOIS STOCK TRANSFER COMPANY
As Rights Agent
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Attest:
/s/▇. ▇. ▇▇▇▇
----------------------------------
▇. ▇. ▇▇▇▇
-36-
EXHIBIT A
FORM BCA 6.10 (rev. Dec. 2003)
STATEMENT OF RESOLUTION
ESTABLISHING SERIES
Business Corporation Act
▇▇▇▇▇ ▇▇▇▇▇, Secretary of State
Department of Business Services
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Remit payment in the form of a
check or money order payable
to the Secretary of State.
__________________ File #________________________ Filing Fee: $ 25.00 Approved:
________________Submit in duplicate ____________________ Type or Print clearly
in black Ink____________________ Do not write above this line __________________
1. CORPORATE NAME: Illini Corporation
2. The Board of Directors on October 29, 2004 duly adopted the following
------------- -------
(Month & Day) (Year)
resolution establishing and designating one or more series and fixing and
determining the relative rights and preferences thereof:
IF NOT SUFFICIENT SPACE TO COVER THIS POINT, ADD ONE OR MORE SHEETS OF THIS SIZE
See Schedule 1 attached hereto and made a part hereof.
3. The undersigned corporation has caused this statement to be signed by a
duly authorized officer, who affirms, under penalties of perjury, that the
facts stated herein are true. All signatures must be in BLACK INK.)
Dated October 29, 2004 Illini Corporation
------------------------------------ ------------------------------
(Month, Day & Year) (Exact Name of Corporation)
------------------------------------
(Any Authorized Officer's Signature)
▇▇▇▇▇▇ ▇. Black, Chairman
------------------------------------
(Type or Print Name and Title)
This form is applicable only where the articles of incorporation expressly
vest authority in the board of directors to establish series and to fix
and determine the relative rights and preferences thereof. In such case
series may be established and rights and preferences fixed and determined
by resolution of the board of directors only to the extent not already
established, fixed and determined by the articles of incorporation.
Note: Only special and preferred classes of stock can be established in
series.
SCHEDULE 1 TO STATEMENT OF
RESOLUTION ESTABLISHING SERIES
ILLINI CORPORATION
RESOLVED, that, pursuant to the authority expressly granted to and vested
in the Board of Directors of Illini Corporation (the "Corporation") in
accordance with the provisions of the Articles of Incorporation, a series of the
Preferred Stock of the Corporation, $0.01 par value per share, be, and hereby
is, created and that the voting powers, designations, number of shares,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations and restrictions
thereof are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock"), the shares of such series shall be $0.01 par value and the
number of shares constituting the Series A Preferred Stock shall be 50,000. Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the "Common Stock"), of the Corporation, 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 on the last business day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date") as provided in paragraphs (B) and (C) of this Section 2 in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 in cash or
(b) subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount (payable in cash) of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of Common Stock
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 A Preferred Stock. If 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 of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
clause (b) of the
Page 3 of 7
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section 2 immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, if no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share payable in cash on the
Series A Preferred Stock shall nevertheless accrue and be cumulative on the
outstanding shares of Series A Preferred Stock as provided in paragraph (C) of
this Section 2.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, 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 A 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 A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights, but only to the extent not
prohibited by the Corporation's Articles of Incorporation as now or hereinafter
in effect:
(A) Subject to the provisions for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the stockholders of the Corporation. If
the Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that was outstanding immediately
prior to such event.
Page 4 of 7
(B) Except as otherwise provided herein, in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock, of by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise provided by law, holders of
Series A Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, or declared and a sum sufficient for the payment therefor be
set apart for payment and be in the process of payment, 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 A
Preferred Stock;
(ii) declare or pay 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 A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(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 A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (as to both dividends and upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock or any shares of stock
ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer
made in 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
Page 5 of 7
in good faith will result in fair and equitable treatment
among the holders of 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 4,
purchase or otherwise acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A 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
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Certificate of Designation creating a
series of Preferred Stock or any similar stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or as
to amounts payable upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless prior thereto, the holders of Series A Preferred Stock
shall have received an amount per share (rounded to the nearest cent) equal to
the greater of (a) $130.00 per share, or (b) an 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 Common Stock, plus, in either
case, an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or (2) to the holders of
stock ranking on a parity (either as to dividends or as to amounts payable upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
Shares are entitled upon such liquidation, dissolution or winding up. If the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the provision clause (1)(b) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
SECTION 7. CONSOLIDATION, MERGER, ETC. If the Corporation shall enter into
any consolidation, merger, statutory share exchange, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities cash or any other property, or any combination
thereof then in any such case each share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash or any other property
(payable in kind), or any combination thereof as the
Page 6 of 7
case may be, into which or for which each share of Common Stock is changed or
exchanged. If 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) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that was outstanding immediately prior to such event.
SECTION 8. REDEMPTION. The shares of Series A Preferred Stock shall not be
redeemable. So long as any shares of Series A Preferred Stock remain
outstanding, the Corporation shall not purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolving or winding up) to the Series A Preferred Stock unless
the Corporation shall substantially concurrently also purchase or acquire for
consideration a proportionate number of shares of Series A Preferred Stock.
SECTION 9. RANK. The Series A Preferred Stock shall rank, with respect to
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
Page 7 of 7
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R-_________________ ____________ Rights
NOT EXERCISABLE AFTER OCTOBER 29, 2014 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS
DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT), ANY ASSOCIATE OR AFFILIATE
OF SUCH ACQUIRING PERSONS OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
RIGHT CERTIFICATE
ILLINI CORPORATION
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of October 29, 2004 (the, "Rights Agreement"), between ILLINI
CORPORATION, an Illinois corporation (the "Company"), and ILLINOIS STOCK
TRANSFER COMPANY, (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 p.m., central time, on October 29, 2014, unless the Rights
evidenced hereby shall have been previously redeemed by the Company, at the
Stockholder Services Office of the Rights Agent (or at the office of its
successor as Rights Agent), one one-hundredth (1/100) of a fully paid
non-assessable share of Series A Junior Participating Preferred Stock, no par
value per share (the "Preferred Shares"), of the Company, at a purchase price of
$130.00 per one one-hundredth (1/100) of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of November 9, 2004,
based on the Preferred Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon that
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the Stockholder Services Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Stockholder Services Office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to and in accordance with the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $0.0l per Right or (ii) may be exchanged by the Company in
whole or in part for shares of the Company's common stock, par value $0.01 per
share.
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, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the Company.
Dated as of _______________, 20___.
ATTEST ILLINI CORPORATION
_________________________________ By:____________________________________
_____________________ , Secretary ____________________________________
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Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
ILLINOIS STOCK TRANSFER COMPANY, as Rights Agent
By:___________________________________
Authorized Signature
Title:________________________________
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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 as of ________________, 20_____.
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, broker, dealer, savings
institution or other eligible institution participating in a signature guarantee
medallion program recognized by the Securities Transfer Association, Inc.
________________________________________________________________________________
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
__________________________
Signature
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[Form of Reverse Side of Right Certificate - continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Right
Certificate)
TO ILLINI CORPORATION:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
securities) issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares (or other securities) be issued in the
name of:
Please insert social security or other identifying number: ____________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number: ___________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated as of _______________, 20____.
__________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, broker, dealer, savings
institution or other eligible institution participating in a signature guarantee
medallion program recognized the Securities Transfer Association, Inc.
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired from, an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
_______________________
Signature
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NOTICE
The signature in the foregoing Form of Assignment or Form of Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent 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 such Assignment or
Election to Purchase will not be honored.
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On October 29, 2004, the Board of Directors of Illini Corporation (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding Common Share, par value $0.01 per share (the "Common
Shares"), of the Company. The dividend is payable to the stockholders of record
at the close of business on November 9, 2004 (the "Record Date"), and with
respect to Common Shares issued thereafter until the Distribution Date (as
defined below) and, in some circumstances, with respect to Common Shares issued
after the Distribution Date. Except as set forth below, each Right, when it
becomes exercisable, entitles the registered holder to purchase from the Company
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
$0.01 par value per share (the "Preferred Shares"), of the Company at a price of
$130.00 per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and Illinois
Stock Transfer Company, as Rights Agent (the "Rights Agent"), dated as of
October 29, 2004.
Initially, the Rights will be evidenced by the certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will become exercisable and separate from the Common
Shares upon the earlier to occur of (1) the close of business on the twentieth
day after the first date of public announcement that a person or group of
affiliated or associated persons, other than the Company, any subsidiary, or an
employee benefit plan of the Company or one of its subsidiaries, has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Voting Shares (except pursuant to a Permitted Offer, as defined
below, specified acquisitions of Common Shares by the Company, specified
inadvertent acquisitions, and specified acquisitions specifically permitted by
the Company's Board of Directors); or (2) the close of business on the twentieth
day (or such later date as the Company's Board of Directors may determine) after
the commencement of, or a public announcement of an intention to commence (which
tender offer is not terminated within such twenty days), a tender or exchange
offer the consummation of which would result in a person or group becoming an
Acquiring Person (as defined below), the earlier of such dates being called the
"Distribution Date." A person or group whose acquisition of Voting Shares causes
a Distribution Date pursuant to clause (1) above is an "Acquiring Person." The
first date of public announcement that a person or group has become an Acquiring
Person is the "Shares Acquisition Date." ▇▇▇▇▇▇ ▇. ▇▇▇▇ (deceased), together
with all of his Family Members and Family Entities and related Charitable
Organizations (as such terms are defined in the Rights Agreement) will not be
deemed to be Acquiring Persons as long as all such persons beneficially own in
the aggregate no more than 30% of the Voting Stock of the Company.
The Rights Agreement provides that, until the Distribution Date, the right
to receive Right Certificates will be transferable only with the Common Shares.
Until the Distribution Date (or redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or redemption or
expiration of the Rights), the transfer of any certificates for Common Shares,
with or without such notation or a copy of this Summary of Rights attached, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date (and to each initial record
holder of certain Common Shares issued after the Distribution Date), and,
thereafter, such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on October 29, 2014 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer for all outstanding Common Shares at a price and
on terms which a majority of the Company's directors determines to be adequate
and in the best interests of the Company and its stockholders, other than such
Acquiring Person, its affiliates and associates (a "Permitted Offer")), each
holder of a Right will, commencing on the Distribution Date and ending on the
Final Expiration Date, have the right (the "Flip-In Right") to receive upon
exercise, at the then current exercise price of the Right, that number of Common
Shares (or, in certain circumstances, one one-hundredth of a Preferred Share)
having an average market value during a specified time period equal to two times
the exercise price of such Right. Notwithstanding the foregoing, following the
occurrence of a person becoming an Acquiring Person, any Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void. In other words, the Rights holders, other than the
Acquiring Person and certain others, may purchase Common Shares (or, in certain
circumstances, Preferred Shares) at a 50% discount.
Alternatively, in the event that, at any time on or following the Shares
Acquisition Date, (1) the Company is a party to a merger or statutory share
exchange in which the holders of all of the outstanding Common Shares
immediately before the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (2) more than 50% of the
Company's assets or earning power is sold or transferred, in either case with or
to an Acquiring Person or any affiliate or associate or any other person in
which such Acquiring Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such Acquiring Person, affiliate
or associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights that
have been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, upon exercise, at the then current exercise price
of the Right, common shares of the acquiring or surviving company having an
average market value during a specified time period equal to two times the
exercise price of the Right. In other words, the Rights holders, other than the
Acquiring Person and certain others, may purchase the acquiring or surviving
company's common shares at a 50% discount.
The Purchase Price payable, and the number of one one-hundredths of a
Preferred Share or Common Shares issuable, upon exercise of the Rights, are
subject to adjustment from time to
-2-
time to prevent dilution (1) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Shares, (2) upon
the grant to holders of the Preferred Shares of certain rights, options or
warrants to subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price, less than the then
current market price of the Preferred Shares, or (3) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above). The number of outstanding Rights
and the exercise price of the Rights are also subject to adjustment in the event
of a stock dividend on the Common Shares payable in Common Shares or
subdivisions or combinations of the Common Shares occurring, in any such case,
before the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. The Company will not be required to issue fractional
Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts) or fractional Common Shares and, in lieu
thereof, an adjustment in cash may be made based on the market price of the
Preferred Shares or Common Shares, as applicable, on, or an average ending
immediately before, the last trading date before the date of exercise.
At any time before the earlier of (i) the twentieth day after a Shares
Acquisition Date or (ii) the Final Expiration Date, the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right (the "Redemption
Price"), which redemption shall be effective upon the action of the Board of
Directors. The Redemption Price may, at the option of the Company, be paid in
cash or Common Shares. Effective at the time of adoption by the Board of
Directors of a resolution authorizing the redemption of the Rights (or such
other date chosen by the Board of Directors in authorizing such redemption), the
right to exercise the Rights shall terminate and the only right of holders of
the Rights will be to receive the Redemption Price.
After a person becomes an Acquiring Person, the Company may exchange all
or part of the Rights which are then exercisable for Common Shares at an
exchange ratio of one Common Share per Right. Immediately upon action of the
Board of Directors to exchange the Rights, the right to exercise the Rights
shall terminate and the only right of holders of the Rights will be to receive
the Common Shares in exchange for the Rights.
The Preferred Shares purchasable upon the exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a preferential quarterly
dividend in an amount equal to the greater of $1.00 per share and 100 times the
dividend declared on each Common Share. In the event of liquidation, the holders
of Preferred Shares will receive a preferential liquidation payment equal to the
greater of $130.00 per share and 100 times the payment made per Common Share,
plus, in each case, accrued and unpaid dividends.
In the event of any merger, consolidation, statutory share exchange,
combination or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
Common Share. Subject to restrictions contained in the Articles of
Incorporation, each Preferred Share will have 100 votes, voting together with
the
-3-
Common Shares. The Company's Articles of Incorporation currently do no permit
the Preferred Shares to have voting rights. Therefore, unless the Company's
Articles of Incorporation are amended in the future to eliminate this
prohibition, holders of Preferred Shares will not have voting rights. The rights
of the holders of Preferred Shares as to dividends, liquidation and voting (if
applicable), and in the event of mergers, consolidations and statutory share
exchanges, are protected by customary anti-dilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote (if applicable) or to receive dividends. While the distribution of the
Rights should not be taxable to stockholders or to the Company, stockholders
will recognize taxable income if the Rights are redeemed and may, depending on
the circumstances, recognize taxable income if the Rights become exercisable or
are exercised or upon the occurrence of certain events thereafter. Stockholders
are encouraged to consult their own tax advisers concerning the tax treatment in
their particular situation.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company before the Distribution Date without the consent of
the Rights holders. From and after the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board in order to cure any ambiguity, to
correct or supplement any provision contained in the Rights Agreement which may
be defective or inconsistent with any other provision, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement, so long as no amendment to
adjust the time period governing redemption shall be made at a time when the
Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired, and under certain circumstances the Rights
beneficially owned by such a person or group may become void. The Rights should
not interfere with any merger, statutory share exchange or other business
combination approved by the Board of Directors because, if the Rights would
become exercisable as a result of such merger, share exchange or business
combination, the Board of Directors may, at its option, redeem all (but not less
than all) of the then outstanding Rights at the Redemption Price.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A, dated
November 3, 2004. A copy of the Rights Agreement is available free of charge
from the Company and may be obtained by contacting the Company's Secretary. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
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