EXHIBIT 1
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RIGHTS AGREEMENT
dated as of October 12, 1998
between
▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY
and
THE PROVIDENT BANK,
as Rights Agent
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TABLE OF CONTENTS
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issue of Right Certificates
Section 4. Form of Right Certificates
Section 5. Execution, Authentication and Delivery
Section 6. Registration, Registration of Transfer and Exchange
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights
Section 9. Cancellation of Right Certificates
Section 10. Authorization of Shares
Section 11. Record Date
Section 12. Adjustment of Purchase Price, Number of Shares or Number of
Rights
Section 13. Certificate of Adjusted Purchase Price or Number of Shares
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power
Section 15. Fractional Rights and Fractional Shares
Section 16. Rights of Action
Section 17. Agreement of Right Holders
Section 18. Right Certificate Holder Not Deemed a Stockholder
Section 19. Concerning the Rights Agent
Section 20. Duties of Rights Agent
Section 21. Merger or Consolidation or Change of Name of Rights Agent
Section 22. Change of Rights Agent
Section 23. Issuance of New Right Certificates
Section 24. Redemption
Section 25. Mandatory Redemption
Section 26. Notice of Certain Events
Section 27. Securities Laws Registrations
Section 28. Notices
Section 29. Supplements and Amendments
Section 30. Successors
Section 31. Benefits of this Agreement; Determinations and Actions by the
Board of Directors
Section 32. Severability
Section 33. Governing Law
Section 34. Counterparts
Section 35. Descriptive Headings
Exhibits:
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
RIGHTS AGREEMENT
This Rights Agreement, dated as of October 12, 1998, is between ▇▇▇▇▇▇▇
Piano & Organ Company, a Delaware corporation (the "Company"), and The Provident
Bank, 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 October 22, 1998 (the "Record Date")
of one Right with respect to each Common Share of the Company outstanding on the
Record Date, and has further authorized and directed the issuance of one Right
with respect to each Common Share that shall become outstanding between the
Record Date 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 then outstanding other than pursuant to a
Qualifying Offer, but, in any event, shall not include (i) 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, or (ii) any Person who became the
Beneficial Owner of 15% or more of the Voting Shares prior to October 11, 1998
(an "Existing Owner"); provided, however, that, if an Existing Owner shall,
after such date and at a time when an Existing Owner is the Beneficial Owner of
15% or more of the Voting Shares then outstanding, become the Beneficial Owner
of additional Voting Shares representing more than 1% of the Voting Shares, then
such Existing Owner 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 shares beneficially
owned by such Person to 15% 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 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, become the Beneficial Owner of additional Voting Shares
representing more than 1% of the Voting Shares, then such Person shall be deemed
to be an "Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the prior sentence of this paragraph,
has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer, be an "Acquiring Person," as defined pursuant to this paragraph, then
such Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.
"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 that (without duplication):
(i) such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of Section 13 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, but only if such agreement, arrangement
or understanding (1) arises solely from a revocable proxy 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 under the Exchange Act,
and (2) is not also then reportable on Schedule 13D under the Exchange Act or
any comparable or successor form.
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 Ohio are authorized or obligated by
law or executive order to close.
"Board of Directors" shall mean the Board of Directors of the Company.
"Close of Business" on any given date shall mean 5:00 P.M., Cincinnati,
Ohio time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., Cincinnati, Ohio 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 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 National Association of Securities Dealers, 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. 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, after consultation with a nationally recognized investment banking
firm, 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, $0.01 par
value, 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 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 ▇▇▇▇▇▇▇ Piano & Organ Company, a Delaware corporation,
and its successors. Where any action on the part of the Company is required or
permitted in this Agreement, such action shall be taken or authorized by the
Board of Directors.
"Company Order" means a written request or order signed in the name of the
Company by its Chairman of the Board, its President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Rights Agent.
"Corporate Trust Office" means the principal office of the Rights Agent at
which it administers its corporate trust business.
"Distribution Date" shall mean the earlier of the close of business on (i)
the tenth day after the Shares Acquisition Date or such earlier or later date
(not beyond the thirtieth day after such Shares Acquisition Date) as the Board
of Directors may from time to time fix by resolution adopted prior to the
Distribution Date that otherwise would have occurred or (ii) the tenth Business
Day (or such later date as may be determined from time to time by action of the
Board of Directors prior to such time as any Person becomes an Acquiring Person)
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; provided, however, that an occurrence described in clause (ii) of this
definition above shall not cause the occurrence of the Distribution Date if any
tender or exchange offer referred to in clause (ii) of this Definition is
cancelled, terminated or otherwise withdrawn prior to such tenth Business Day,
such offer shall be deemed, for purposes of this definition, never to have
occurred.
"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 12,
2008.
"Person" shall mean any individual, firm, group (as such term is used in
Rule 13d-5 under the Exchange Act, as such rule is in effect on the date of this
Agreement), corporation, partnership, limited partnership, limited liability
company, trust or other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Purchase Price" shall mean the initial price at which the holder of a
Right may, subject to the terms and conditions of this Agreement, purchase one
Common Share (which initial price is set forth in Section 8(b) herein), as such
price shall be adjusted pursuant to the terms of this Agreement.
"Qualifying Offer" shall mean an all cash tender offer for all outstanding
Voting Shares which meets all of the following requirements:
(1) on or prior to the date such offer is commenced within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, such Person has, and has provided to the Company, firm written
commitments from responsible financial institutions, which have been
accepted by such Person (or one of its Affiliates), to provide, subject
only to customary terms and conditions, funds for such offer which, when
added to the amount of cash and cash equivalents which such Person then has
available and has irrevocably committed in writing to the Company to
utilize for purposes of such offer, will be sufficient to pay for all
Voting Shares outstanding on a fully diluted basis pursuant to the offer
and the second-step transaction required by clause (5) below and all
related expenses, together with copies of all written materials prepared by
such Person for such financial institutions in connection with obtaining
such financing commitments;
(2) after consummation of such offer, such Person, alone or together
with any of its Affiliates and Associates, owns Voting Shares representing
at least 75% of the then outstanding Voting Shares;
(3) such offer remains open for at least 45 Business Days; provided,
however, that (x) if there is any increase in the price of such offer, such
offer must remain open for at least an additional 20 Business Days after
the last such increase, (y) such offer must remain open for at least 20
Business Days after the date that any bona fide alternative offer is made
which, in the opinion of one or more investment banking firms designated by
the Company, provides for consideration per share in excess of that
provided for in such offer, and (z) such offer must remain open for at
least 20 Business Days after the date on which such Person reduces the per
share price offered in accordance with clause (5)(y) below; provided
further, however, that such offer need not remain open, as a result of this
clause (3), beyond (i) the time which any other offer satisfying the
criteria for a Qualifying Offer is then required to be kept open under this
clause (3), or (ii) the scheduled expiration date, as such date may be
extended by public announcement on or prior to the then scheduled
expiration date, of any other tender or exchange offer for Voting Shares
with respect to which the Board of Directors has agreed to redeem the
Rights immediately prior to acceptance for payment of Voting Shares
thereunder (unless such other offer is terminated prior to its expiration
without any Voting Shares having been purchased thereunder);
(4) such offer is accompanied by a written opinion, in customary form,
of a nationally recognized investment banking firm which is addressed to
the Company, the Company's Board of Directors and holders of Voting Shares
and states that the price to be paid to holders of Voting Shares (other
than such Person) pursuant to the offer is fair from a financial point of
view to such holders and includes any written presentation of such firm
showing the analysis and range of values underlying such conclusions, such
written opinion to be updated and provided to the Company within two
Business Days prior to the date such offer is consummated; and
(5) prior to or on the date that such offer is commenced within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, such Person makes an irrevocable written commitment to the
Company (x) to consummate a transaction or transactions promptly upon the
completion of such offer, whereby all Voting Shares not purchased in such
offer will be acquired at the same price per share paid in such offer,
subject only to the condition that the Board of Directors shall have
granted any approvals required to enable such Person to consummate such
transaction or transactions following consummation of such offer without
obtaining the vote of any other stockholder, (y) that such person will not
make any amendment to the original offer which reduces the per share price
offered (other than a reduction to reflect any dividend declared by the
Company after the commencement of such offer or any material change in the
capital structure of the Company initiated by the Company after the
commencement of such offer, whether by way of recapitalization,
reorganization, repurchase or otherwise), changes the form of consideration
offered, or reduces the number of shares being sought or which is in any
other respect materially adverse to the Company's stockholders, and (z)
that neither such Person nor any of its Affiliates or Associates will make
any offer for any equity securities of the Company for a period of six
months after the commencement of the original offer if such original offer
does not result in the tender of the number of Voting Shares required to be
purchased pursuant to clause (2) above, unless another tender offer by
another party for all outstanding Voting Shares is commenced (a) at a price
per share in excess of that provided for in such original offer, (b) on
terms satisfying clauses (1) and (5) above (in which event, any new offer
by such Person or of any of its Affiliates or Associates must be at a price
no less than that provided for in such original offer) or (c) with the
approval of the Board of Directors of the Company (in which event any new
offer by such Person or of any of its Affiliates or Associates must be at a
price no less than that provided for in such approved offer).
"Record Date" shall have the meaning specified in the Recitals.
"Redemption Date" shall mean the time at which the Rights are redeemed
pursuant to Section 24 herein or the time at which all of the Rights are
mandatorily redeemed and exchanged pursuant to Section 25 hereof.
"Redemption Price" shall have the meaning specified in Section 24(b)
herein.
"Right" shall mean one Common Share purchase right which initially
represents the right of the registered holder thereof to purchase one Common
Share upon the terms and subject to the conditions herein set forth.
"Right Certificate" shall mean a certificate, in substantially the form of
Exhibit A attached to this Rights Agreement, evidencing the Rights registered in
the name of the holder thereof.
"Rights Agent" shall mean The Provident Bank, 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.
"Rights Register" shall have the meanings specified in Section 6.
"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.
"Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the outstanding capital stock or other equity interests
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 Common
Shares in substantially the form attached as Exhibit B to this Agreement.
"Trading Day" shall mean a day on which the principal national securities
exchange or market on which any of the Voting Shares are listed or admitted to
trading is open for the transaction of business or, if none of the Voting Shares
is listed or admitted to trading on 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 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
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 in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) From and after the Record Date
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 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. From and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) As soon as practicable after the Record Date, 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 the
Record Date, at the address of such holder shown on the stock transfer records
of the Company. With respect to Common Shares outstanding on the Record Date,
the certificates evidencing such Common Shares shall, together with copies of
such Summary of Rights, 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
the Record Date, 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 the Record Date 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 Common Shares at the same Purchase Price as the Rights then
outstanding.
(d) Certificates for Common Shares issued after the Record Date 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 the Record Date 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 ▇▇▇▇▇▇▇
Piano & Organ Company and The Provident Bank, dated as of October 12,
1998 (as such may be amended from time to time, the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of ▇▇▇▇▇▇▇ Piano & Organ Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. ▇▇▇▇▇▇▇ Piano & Organ Company 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 the
Record Date, but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled 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 Common 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 A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed or as may be necessary to conform to usage. The Right
Certificates shall be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. 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 Common 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 the Record Date 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 Common Shares at the
Purchase Price per one Common Share as to which a Right would be exercisable if
the Distribution Date were the Record Date; no adjustment of the Purchase Price
or the number of Common 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, at
the Company's expense, 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 Corporate Trust 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 Chairman of the Board, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon 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 and prior to the Distribution Date, 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 manual signature of an authorized
signatory, which need not be the same authorized signatory for all of the Right
Certificates, 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 Corporate
Trust 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 by the holder 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, along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, 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 a registration number not
contemporaneously outstanding.
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 save 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 Corporate Trust Office, together with payment in cash
of the Purchase Price for each one Common Share (or other securities) as to
which the Rights are exercised plus an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 10, 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 Common Share pursuant to the exercise
of a Right shall initially be $45.00, 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 by the holder of such Right
Certificate in accordance with Section 10 in cash, or by certified check or
cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Common Shares
(or other securities) certificates for such number of Common Shares (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, (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 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 duly authorized
assigns, subject to the provisions of Section 15 hereof.
Section 9. Cancellation 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 canceled by it. No Right Certificates
shall be authenticated in lieu of or in exchange for any Right Certificates
canceled as provided in this Section 9 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 canceled Right Certificates to the Company.
Section 10. Authorization of Shares. The Company shall not be required to
reserve and keep available out of its authorized and unissued Common Shares or
any Common Shares held in its treasury, the number of Common Shares that will be
sufficient to permit the exercise of outstanding Rights pursuant to the
adjustments set forth in Section 12(a)(ii) or Section 14 or otherwise until such
time as the Rights become exercisable.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Common 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
original issuance or delivery of the Right Certificates or of any Common Shares
of the Company upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates for Common Shares of the Company upon
exercise of Rights evidenced by Right Certificates 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 for Common Shares
of the Company 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
Common Shares of the Company is issued upon the exercise of, or upon mandatory
redemption and exchange of, Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares represented thereby on, and
such certificate shall be dated, (i) in the case of the exercise of Rights, 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, or (ii) in the case of the mandatory redemption and exchange of
Rights, the date of such mandatory redemption and exchange; provided, however,
that, if the date of such surrender and payment or mandatory redemption and
exchange is a date upon which the transfer books of the Company for its Common
Shares 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. Prior to the
exercise of (or the mandatory redemption and exchange of) the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of Common Shares of the Company for which the Rights shall be
exercisable, including without limitation the rights to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive my notice of any proceedings of the Company, except
as provided herein.
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 or pay a dividend on
the Common Shares payable in Common Shares, (B) subdivide the outstanding Common
Shares, or (C) combine the outstanding Common Shares into a smaller number of
Common Shares or (D) issue any shares of its capital stock in a reclassification
of the Common 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 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 Common Shares 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
Common 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.
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) Subject to action of the Board of Directors pursuant to Section 25 of
this Agreement, if any Person shall become an Acquiring Person, each holder of a
Right shall thereafter have the right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of
Common Shares for which a Right is then exercisable, in accordance with the
terms of this Agreement, such number of Common Shares of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of Common Shares 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. 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 that are or were
acquired or beneficially owned by any such Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) 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 canceled.
(iii) In the event that there shall not be sufficient issued but not
outstanding, or authorized but unissued, Common Shares to permit the exercise or
exchange in full of all outstanding Rights in accordance with the foregoing
subparagraph (ii) or Section 25, the Company shall either (i) call a meeting of
shareholders seeking approval to cause sufficient additional shares to be
authorized and take all such additional action as is within its power to provide
for the authorization of such additional shares (provided that if such approval
is not obtained the Company will take the action specified in clause (ii) of
this sentence) or (ii) take such action as shall be necessary to ensure and
provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Shares Acquisition Date to which the Company is a
party, that each Right shall thereafter constitute the right to receive (x) at
the Company's option, either (A) in return for the Purchase Price, debt or
equity securities (including, in the Company's discretion, any available Common
Shares) or other assets (or a combination thereof) having a fair value equal to
twice the Purchase Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair market value equal to the Purchase
Price or (y) if the Company elects to exchange the Rights in accordance with
Section 25, debt or equity securities (including, in the Company's discretion,
any available Common Shares) or other assets (or a combination thereof) having a
fair value equal to the product of the then current per share market price of a
Common Share as of the Shares Acquisition Date (determined pursuant to Section
12(d)) multiplied by the number of Common Shares that the holder of the Rights
would be entitled to receive from the Company in mandatory redemption of, and in
exchange for, the outstanding Rights pursuant to Section 25, where in any case
set forth in (x) or (y) above the fair value of such debt or equity securities
or other assets shall be as determined in good faith by the Board of Directors,
after consultation with a nationally recognized investment banking firm.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Shares (or shares having the same rights privileges and
preferences as the Common Shares ("equivalent common shares")) or securities
convertible into or exchangeable for Common Shares or equivalent common shares
at a price per Common Share or equivalent common share (together with any,
additional consideration required upon conversion or exchange in the case of a
security convertible into or exchangeable for Common Shares or equivalent common
shares), less than the then current per share market price of the Common 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 Common Shares outstanding on such
record date plus the number of Common Shares which the aggregate offering price
of the total number of Common Shares and/or equivalent common 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 Common Shares outstanding on such
record date plus the number of additional Common Shares and/or equivalent common
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). 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,
whose determination shall be described in a statement filed with the Rights
Agent. Common 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 Common 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 Common 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 Common 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, 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 Common
Share and the denominator of which shall be such then current per share market
price of the Common Shares. Such adjustments shall be made successively whenever
such a record date is fixed; and, if such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "then 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 then current per share market price of the Common
Shares shall be appropriately adjusted to reflect the current market price per
Common Share equivalent.
(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, as the case may be, and references herein to the "number
of Common Shares" (or similar phrases) shall be construed to include fractions
of a Common Share. Notwithstanding the first sentence of this Section 12(e), any
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 Common Shares, thereafter the
number of such other shares so receivable 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 Common 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
Common Shares 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 Common Share, that number of Common Shares obtained by
(i) multiplying (x) the number of whole Common Shares 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 Common Shares 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 Common Shares 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, along with simultaneous written notice to the Rights Agent, 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 Common Shares 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 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 Common Shares 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 Common Shares which were expressed in the
initial Right Certificates issued hereunder.
(k) 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
Common Shares or other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common 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.
(l) 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 Common Shares, issuance wholly
for cash of any of the Common Shares at less than the current market price,
issuance wholly for cash of Common Shares or securities which by their terms are
convertible into or exchangeable for Common Shares, dividends on Common Shares
payable in Common 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 Common Shares shall not be taxable to such shareholders.
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 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 or Sale or Transfer of Assets or Earning
Power. If, at any time after any Person becomes an Acquiring Person, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into, any
other Person, (b) any Person shall merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with any such merger, all or part of the Common Shares of the Company
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or a series of two or more transactions, assets of
the Company or its Subsidiaries which constitute more than 50% of the assets
(measured by either book value or fair market value) or which produce more than
50% of the operating income or cash flow of the Company and its Subsidiaries
(taken as a whole) to any Person or any Affiliate or Associate of such Person
(other than the Company or one or more of its Wholly-Owned Subsidiaries) or to
two or more such Persons which are affiliated or otherwise acting in concert,
then, and in each such case, the Company agrees that, as a condition to engaging
in any such transaction, it will 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, such number of Common Shares of such other
Person (including the Company as successor thereto or as the surviving
corporation) or, if such other Person is a Subsidiary of another Person, of the
Person or Persons (other than individuals) which ultimately control such
first-mentioned Person, as shall be equal to the result obtained by (X)
multiplying the then current Purchase Price by the number of whole Common Shares
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 then current per share market price of the Common
Shares of such other Person (determined pursuant to Section 12(d)) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company," as
used herein, shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including without limitation the reservation of a
sufficient number of shares 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. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer shall
have executed and delivered to the Rights Agent an agreement supplemental to
this Agreement complying with the provisions of this Section 14. The provisions
of this Section 14 shall similarly apply to successive mergers or consolidations
or sales or other transfers. For the purposes of this Section 14, 50% of the
assets of the Company and its Subsidiaries shall be determined by reference to
the fair market value of such assets or 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.
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(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company may, at its option, 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 Common Shares
upon exercise of the Rights or to distribute scrip or certificates which
evidence fractional Common Shares. If, on the Distribution Date or thereafter, a
Person would otherwise be entitled to receive a fractional Common Share, the
Company may, at its option, 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(b), 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.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute scrip or certificates which evidence fractional Common
Shares. If after any such adjustment or mandatory redemption and exchange, a
Person would otherwise be entitled to receive a fractional Common Share of the
Company upon exercise of any Right Certificate or upon mandatory redemption and
exchange as contemplated by Section 25, the Company shall, in lieu thereof, pay
to such Person at the time such Right is exercised as herein provided or upon
such mandatory redemption and exchange 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 or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise or
mandatory redemption and exchange 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 own behalf and for his 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.
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
together with, and will be transferred by a transfer of the associated 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 Corporate
Trust Office of the Rights Agent duly endorsed or accompanied by a proper
instrument of transfer, along with such other and further documentation as the
Rights Agent may reasonably request;
(c) prior to due presentment of a Right Certificate (or, prior to the
Distribution Date, the associated Common Shaare certificate) for registration of
transfer, 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;
(d) Rights beneficially owned by certain persons will under the
circumstances set forth in Section 12(c)(ii) become null and void;
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 29 hereof; and
(f) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining performance of such
obligation; provided, that the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 18. Right Certificate Holder Not Deemed a Stockholder. 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 Common Shares of the Company or any other securities of the Company
which may at any time be issuable on the exercise (or mandatory redemption and
exchange) 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 stockholder of the Company, including without
limitation any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, to give or withhold consent to
any corporate action, to receive notice of meetings or other actions affecting
stockholders (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 such compensation as shall be agreed to in writing between the
Company and the Rights Agent 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 expenses 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 and defend 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 performance of its duties as set forth in this Agreement, including the
costs and expenses of defending against any claim of liability in the premises.
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 reliance upon any
Right Certificate or certificate for 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 by the proper person or persons and, where necessary,
verified or acknowledged, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
The provisions of this Section 19 shall survive the expiration of the
Rights and the termination of this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations expressly imposed by this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Rights Agent, 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 of its selection (who
may be legal counsel employed by 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 own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its 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 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, 24 and 25, 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 Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Common Shares will, when
issued, be duly authorized, validly issued, fully paid and nonassessable; nor
shall the Rights Agent be responsible for the legality of the terms hereof in
its capacity as such agent.
(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 or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company.
(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,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the portion of the form of assignment or form of
election to purchase (as the case may be) certifying that the Rights are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
has not been completed or indicates that such Rights are beneficially owned by
such Person, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without the written consent of the Company.
(l) In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with the performance of its duties as set forth in this
Agreement if such acts or omissions are in reliance upon (i) the proper
execution of the certification concerning beneficial ownership appended to the
form of assignment and the form of election to exercise attached to any Right
Certificate unless the Rights Agent shall have actual knowledge that, as
executed, such certification is untrue, or (ii) the non-execution of such
certification including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice of
any event or ownership which would prohibit the exercise or transfer of the
Right Certificates.
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 of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 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 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, 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 the
Rights Agent or 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 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 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 its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price 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.
Section 24. Redemption. (a) The Rights may be redeemed by action of the
Board of Directors pursuant to paragraph (b) of this Section 24, or may be
redeemed and exchanged by action of the Board of Directors pursuant to Section
25 herein, but shall not be redeemed in any other manner.
(b) The Board of Directors may, at its option, at any time prior to the
Distribution Date redeem all but not less than all the then outstanding Rights
at a redemption price of one-tenth of one cent ($0.001) per Right then
outstanding, appropriately adjusted to reflect any adjustment in the number of
Rights outstanding pursuant to Section 12(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.
(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 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. Within 10 days after the
adoption of any redemption resolution pursuant to paragraph (b) of this Section
24, the Company shall give notice of such redemption to the Rights Agent and 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 agents 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 or in Section 25 herein, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.
Section 25. Mandatory Redemption. (a) The Board of Directors may, at its
option, at any time after any Person becomes an Acquiring Person, issue Common
Shares of the Company in mandatory redemption or, and in exchange for, all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section
12(a)(ii) hereof) at an exchange ratio of one Common Share for each two Common
Shares for which each Right is then exercisable pursuant to the provisions of
Section 12(a)(ii) hereof. Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such redemption and exchange at any time after
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any such Subsidiary, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Voting Shares then outstanding other than pursuant to a
Qualifying Offer.
(b) Immediately upon the action of the Board of Directors ordering the
mandatory redemption and exchange of any Rights pursuant to subsection (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 such number of Common Shares as is
provided in paragraph (a) of this Section 25. The Company shall promptly give
public notice of any such redemption and exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such redemption and exchange. The Company promptly shall mail a notice of any
such redemption and exchange to the Rights Agent and to all 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
mandatory redemption and exchange shall state the method by which the redemption
and exchange of the Common Shares for Rights will be effected and, in the event
of any partial redemption and exchange, the number of Rights which will be
redeemed and exchanged. Any partial redemption and exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become null
and void pursuant to the provisions of Section 12(a)(ii) hereof) held by each
holder of Rights.
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 Common Shares, (b) to offer to the holders of its Common Shares
rights, options or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities, rights,
options or warrants, (c) to make any other distribution to the holders of its
Common Shares (other than a regular quarterly cash dividend), (d) to effect any
reclassification of its Common Shares (other than a reclassification involving
only the subdivision of outstanding Common Shares), (e) to effect any
consolidation or merger into or 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), (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 the Rights Agent and 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, and record date
for, such stock dividend or such distribution of rights or warrants or the date
on which such reclassification, consolidation, merger, 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 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), (c) or (g) above at least 20
days prior to the record date for determining holders of the Common Shares of
the Company, 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 Common Shares of the
Company, 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 the Rights Agent and 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 Common 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 Common Shares. Should
the Rights become exercisable with respect to securities of the Company or one
of its Subsidiaries other than Common 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 sale and
delivery of such other securities and the Company will, thereafter, uses 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 Common 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.
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:
▇▇▇▇▇▇▇ Piano & Organ Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
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:
The Provident Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Stock Transfer Department
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. The Company may from time to time
supplement or amend 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 Right Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, to make any other provisions in
regard to matters or questions arising hereunder, or to add, delete, modify or
otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date and,
provided that at the time of such amendment or supplement the Distribution Date
has not occurred, the period during which the Rights may be redeemed; provided,
however, that from and after such time as any Person becomes an Acquiring
Person, any such amendment or supplement shall not materially and adversely
affect the interests of the holders of Right Certificates. Without limiting the
foregoing, the Board of Directors may by resolution adopted at any time prior to
such time as any Person becomes an Acquiring Person amend this Agreement to
lower the threshold set forth in the definitions of Acquiring Person and
Distribution Date herein from 15% to a percentage not less than the greater of
(i) any percentage greater than the largest percentage of the outstanding Voting
Shares then known to the Company to be beneficially owned by any Person (other
than an Existing Person, 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), and (ii) 10% if the Board of Directors shall determine that a Person
whose interests are adverse to the Company and its shareholders may seek to
acquire control of the Company.
Notwithstanding any other provision hereof, the Rights Agent's consent must
be obtained regarding any amendment or supplement pursuant to this Section 29
which alters the Rights Agent's rights or duties.
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; Determinations and Actions by the
Board of Directors. (a) 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, of 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, of the Common Shares).
(b) Except as explicitly otherwise provided in this Agreement, the
Board of directors shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend this Agreement and determination of whether an
offer constitutes a Qualifying Offer and whether there is an Acquiring Person).
(c) Nothing contained in this Agreement shall be deemed to be in
derogation of the obligation of the Board of Directors to exercise its fiduciary
duty. Without limiting the foregoing, nothing contained herein shall be
construed to suggest or imply that the Board of Directors shall not be entitled
to reject any Qualifying Offer or any other tender offer, or to recommend that
holders of Common Shares reject any Qualifying Offer or any other tender offer,
or to take any other action (including, without limitation, the commencement,
prosecution, defense or settlement of any litigation and the submission of
additional or alternative offers or other proposals) with respect to any
Qualifying Offer or any other tender offer that the Board of Directors believes
is necessary or appropriate in the exercise of such fiduciary duty.
(d) It is understood that the Independent Directors Committee (as
defined below) of the Board of Directors shall review and evaluate this
Agreement in order to consider whether the maintenance of this Agreement
continues to be in the interests of the Company, its shareholders and any other
relevant constituencies of the Company, at least every two years, or sooner than
that if any Person shall have made a proposal to the Company, or taken any such
other action, that, if effective, could cause such Person to become an Acquiring
Person hereunder, if a majority of the members of the Independent Directors
Committee shall deem such review and evaluation appropriate after giving due
regard to all relevant circumstances. Following each such review, the
Independent Directors Committee will communicate its conclusions to the full
Board of Directors, including any recommendation in light thereof as to whether
this Agreement should be modified or the Rights should be redeemed. The
Independent Directors Committee shall be comprised of the Directors of the
Company who are not officers or employees of the Company.
Section 32. Severability. If any term, provision, covenant 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
Delaware 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.
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.
▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
THE PROVIDENT BANK
By: /s/ Unreadable
Its Vice President
THE PROVIDENT BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Its Trust Officer
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- ---------- Rights
NOT EXERCISABLE AFTER OCTOBER 12, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 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) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY
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 12, 1998 (the "Rights Agreement"), between
▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY, a Delaware corporation (the "Company"), and THE
PROVIDENT BANK (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., Eastern Standard Time, on October 12, 2008, at the
Corporate Trust Office of the Rights Agent (or at the office of its successor as
Rights Agent), one fully paid nonassessable share of Common Stock, $0.01 par
value (the "Common Shares"), of the Company, at a purchase price of forty-five
dollars ($45.00) per Common 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 Common Shares 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 October 22, 1998, based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of Common
Shares 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.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or receives assets of the Company
other than Common Shares, all as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust 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
Common 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 the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$0.001 per Right or (ii) may be exchanged by the Company in whole or in part for
Common Shares (or, in certain cases, other securities or assets of the Company).
No fractional Common Shares will be issued upon the exercise of any Right
or Rights evidenced hereby, but in lieu thereof a cash payment will be made as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Common 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 and
its corporate seal.
Dated as of
ATTEST: ▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY
[SEAL]
------------------------ By:------------------------------------
Secretary President
Authentication by:
The Provident Bank, Rights Agent
By:----------------------------------
Date of Authentication:--------------
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED ------------------------- hereby sells, assigns and
transfers unto --------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ---------------- Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:-------------, 19-
Signature Guaranteed:
----------------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Right
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Right Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-----------------------------------
Signature
--------------------------------------------------------------------------------
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Right Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Right Certificate to be void and not transferable or
exercisable.
[To be Attached to Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO ▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY:
The undersigned hereby irrevocably elects to exercise -----------------
Rights represented by this Right Certificate to purchase the Common Shares (or
other securities) issuable upon the exercise of such Rights and requests that
certificates for such Common 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 --------------------------------, ------------------.
-----------------------------------
Signature
[Form of Reverse Side of Right Certificate - continued]
Signature Guaranteed:
Signatures must have an acceptable guarantee.
------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-----------------------------------
Signature
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.
EXHIBIT B
▇▇▇▇▇▇▇ PIANO & ORGAN COMPANY
STOCKHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On October 12, 1998, the Board of Directors of ▇▇▇▇▇▇▇ Piano & Organ
Company (the "Company"), authorized the issuance of one common share purchase
right (a "Right") with respect to each outstanding share of common stock, $0.01
par value (the "Common Shares"), of the Company. The rights were issued on
October 23, 1998 to the holders of record of Common Shares on October 22, 1998.
Each Right entitles the registered holder to purchase from the Company one
Common Share at a price of $45.00 per Common Share (the "Purchase-Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement"), dated October 12, 1998, between the
Company and the Provident Bank, as Rights Agent (the "Rights Agent").
Detachment of Rights: Exercise. Initially, the Rights will attach to all
Common Share certificates representing outstanding shares and no separate Right
Certificate will be distributed. The Rights will separate from the Common Shares
and a Distribution Date will occur upon the earlier of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding Voting Shares (as defined in the Rights Agreement) of the Company
other than pursuant to a "Qualifying Offer" (as defined in the Rights Agreement)
or such earlier or later date (not beyond the thirtieth day after such Shares
Acquisition Date) as the Board of Directors may from time to time by resolution
adopted prior to the Distribution Date that otherwise would have occurred, or
(ii) 10 business days following the commencement or announcement of an intention
to commence a tender offer or exchange offer the consummation of which would
result in any person becoming an Acquiring Person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced, with respect to any of the Common
Shares outstanding on October 22, 1998, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after October 12, 1998, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of October 22, 1998, even without such notation
or a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on October 12, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.
If any person becomes an Acquiring Person, each Right then outstanding
(other than Rights beneficially owned by the Acquiring Person which would become
null and void) would become a right to buy that number of Common Shares that at
the time of such acquisition would have a market value of two times the Purchase
price of the Right.
If, at any time after a person becomes an Acquiring Person, the Company
were acquired in a merger or other business combination transaction or more than
50% of its consolidated assets or earning power were sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value of two times the Purchase
Price of the Right.
Registration and Listing of Common Shares. The offer and sale of the Common
Shares issuable upon exercise of the Rights will be registered with the
Securities and Exchange Commission but such registration will not be effective
until the Rights become exercisable. As described above, however, the Rights
will not be transferable separately from the Common Stock until the Distribution
Date.
Anti-dilution and Other Adjustments. The number of Common Shares or other
securities or property issuable upon exercise of the Rights, and the Purchase
Price payable, are subject to customary adjustments from time to time to prevent
dilution.
The number of outstanding Rights and the number of Common Shares issuable
upon exercise of each Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
Exchange Option. At any time after a person becomes an Acquiring Person and
before the acquisition by a person or group of 50% or more of the Outstanding
Voting Shares (other than pursuant to a Qualifying Offer), the Board of
Directors, may, at its option, issue Common Shares in mandatory redemption of,
or in exchange for, all or part of the then outstanding and exercisable Rights
(other than Rights owned by such Acquiring Person or group which would become
null and void) at an exchange ratio of one Common Share for each two Common
Shares for which each Right is then exercisable, subject to adjustment.
Redemption of Rights. At any time before a person becomes an Acquiring
Person, the Board of Directors, may redeem all, but not less than all, of the
then outstanding Rights at a price of $0.001 per Right (the "Redemption Price").
The redemption of the Rights 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. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
No Rights as Shareholder. Until a Right is exercised, the holder thereof,
as such, will have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
Amendment of Rights. The terms of the Rights may be amended by the Board of
Directors without the consent of the holders of the Rights, including an
amendment to extend the Final Expiration Date, and, provided a Distribution Date
has not occurred, to extend the period during which the Rights may be redeemed,
except that after the Distribution Date no such amendment may materially and
adversely affect the interests of the holders of the Rights.
Qualifying Offer. The Rights will not be exercisable if a person or group
were to acquire 15% or more of the Voting Shares pursuant to a "Qualifying
Offer." A "Qualifying Offer" is defined as an all cash tender offer for all
outstanding voting shares of the Company which meets the requirements specified
in the Agreement, including:
(1) the offer is accompanied by firm written commitments from
responsible financial institutions to provide funds for such offer which,
when added to the offeror's available cash, will be sufficient to pay for
all shares on a fully-diluted basis and the second-step transaction
described below; and
(2) after consummation of the offer, the offeror will own at least 75%
of the then outstanding voting shares of the Company; and
(3) the offer remains open for at least 45 Business Days; and
(4) the offer is accompanied by a written opinion of a nationally
recognized investment banking firm stating that the price to be paid in the
offer is fair from a financial point of view to the Company's stockholders;
and
(5) the offeror agrees to consummate the second-step transaction in
which all shares not acquired upon completion of the tender offer will be
acquired at the same price per share paid in such offer.
Independent Directors Committee. The Independent Directors Committee of the
Company will review the Rights Plan at least every two years and, if a majority
of the members of the Independent Directors Committee deems it appropriate, may
recommend a modification or termination of the Rights Plan.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS HEREBY
INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Form 8-K dated October 12,
1998. A copy of the Rights Agreement is available free of charge from the
Company.