EXHIBIT 3
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FORM OF RIGHTS AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇▇ AMERICAN INC.
AND
THE BANK OF NEW YORK,
AS RIGHTS AGENT
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TABLE OF CONTENTS
1. Certain Definitions....................................................................................
2. Appointment of Rights Agent............................................................................
3. Issue of Right Certificates............................................................................
4. Form of Right Certificates.............................................................................
5. Countersignature and Registration......................................................................
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates...........................................................................
7. Exercise of Rights; Purchase Price; Expiration Date of Rights..........................................
8. Cancellation and Destruction of Right Certificates.....................................................
9. Company Covenants Concerning Securities and Rights.....................................................
10. Record Date............................................................................................
11. Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights........................
12. Certificate of Adjusted Purchase Price or Number of Securities.........................................
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...................................
14. Fractional Rights and Fractional Securities............................................................
15. Rights of Action.......................................................................................
16. Agreement of Rights Holders............................................................................
17. Right Certificate Holder Not Deemed a Stockholder......................................................
18. Concerning the Rights Agent............................................................................
19. Merger or Consolidation or Change of Name of Rights Agent..............................................
20. Duties of Rights Agent.................................................................................
21. Change of Rights Agent.................................................................................
22. Issuance of New Right Certificates.....................................................................
23. Redemption.............................................................................................
24. Exchange...............................................................................................
25. Notice of Certain Events...............................................................................
26. Notices................................................................................................
27. Supplements and Amendments.............................................................................
28. Successors; Certain Covenants..........................................................................
29. Benefits of This Agreement.............................................................................
30. Governing Law..........................................................................................
31. Severability...........................................................................................
32. Descriptive Headings, Etc..............................................................................
33. Determinations and Actions by the Board................................................................
34. Counterparts...........................................................................................
Exhibit A....................................................................................................
Exhibit B....................................................................................................
Exhibit C....................................................................................................
(ii)
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of , 2004 (this "AGREEMENT"), is
made and entered into by and between ▇▇▇▇▇▇▇▇ American Inc., a North Carolina
corporation (the "COMPANY"), and The Bank of New York, as Rights Agent (the
"RIGHTS AGENT").
RECITALS
WHEREAS, on July 30, 2004, the Board of Directors of the Company
authorized and declared a dividend distribution of one right (a "RIGHT") for
each share of Common Stock, par value $0.0001 per share, of the Company (a
"COMMON SHARE") outstanding as of the Close of Business (as hereinafter defined)
on July 30, 2004 (the "RECORD DATE"), each Right initially representing the
right to purchase one one-hundredth of a Preferred Share (as hereinafter
defined), on the terms and subject to the conditions herein set forth, and
further authorized and directed the issuance of one Right (subject to adjustment
as provided herein) with respect to each Common Share issued or delivered by the
Company (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date (as
hereinafter defined) and the Expiration Date (as hereinafter defined) or as
provided in Section 22.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" means any Person who or which, together with all
Affiliates and Associates of such Person, shall at any time after
the Effective Time be the Beneficial Owner of a percentage equal to
or greater than the Applicable Percentage of the then-outstanding
Common Shares, but shall not include (i) the Company, (ii) any
Related Person, or (iii) any PLC Company; provided, however, that
(a) if the Board determines in good faith that a Person who would
otherwise be an "Acquiring Person" became, together with its
Affiliates and Associates, the Beneficial Owner of a number of
Common Shares such that the Person would otherwise qualify as an
"Acquiring Person" inadvertently (including without limitation
because (x) such Person was unaware that it Beneficially Owned a
number of Common Shares that would otherwise cause such Person to be
an "Acquiring Person" or (y) such Person was aware of the extent of
its Beneficial Ownership of Common Shares but had no actual
knowledge of the consequences of such Beneficial Ownership under
this Agreement) and without any intention of changing or influencing
control of the Company, then such Person shall not be deemed to be
or have become an "Acquiring Person" for any purposes of this
Agreement unless and until such Person shall have failed to divest
itself, as soon as practicable (as determined by the Board of
Directors of the Company taking into account restrictions on trading
in the Company's securities relating to possession of material
nonpublic information), of Beneficial Ownership of a sufficient
number of Common Shares so that such Person would no longer
otherwise qualify as an "Acquiring Person," provided, further,
however, that such Person need not divest itself of such Beneficial
Ownership if the Board of Directors of the Company determines that
such divestiture is not necessary; and (b) no Person shall become an
"Acquiring Person" solely as the result of reduction in the number
of Common Shares outstanding, including without limitation a
reduction in the number of Common Shares outstanding due to any
acquisition of Common Shares by the Company which, by reducing the
number of Common Shares outstanding, increases the proportionate
number of Common Shares Beneficially Owned by such Person unless and
until (X) such Person shall thereafter become the Beneficial Owner
of any additional Common Shares (other than as a result of a stock
dividend, stock split or similar transaction effected by the Company
in which all holders of Common Shares are treated equally) or (Y)
any other Person who or which is the Beneficial Owner of Common
Shares thereafter becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, the PLC Companies shall immediately
cease to be excluded from the definition of Acquiring Person
pursuant to clause (iii) above if (A) either a PLC Automatic
Termination, a PLC Fiduciary Termination, a PLC Representation
Termination or a PLC Wilful Breach shall have occurred; provided,
however, that no PLC Company shall be deemed to be an Acquiring
Person solely as a result of taking any action that would have been
permitted under Section 4.03(b) of the Governance Agreement as in
effect as of the date of such termination or breach.
(b) "AFFILIATE" and "ASSOCIATE" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this
Agreement, provided, however, that a Person will not be deemed to be
the Affiliate or Associate of another Person solely because either
or both Persons are or were Directors of the Company.
Notwithstanding the foregoing, with respect to any PLC Company, the
Affiliates and Associates of such PLC Company shall not include (i) any Person
who beneficially owns less than 30% of the voting power of the equity securities
of PLC unless such Person is acting on behalf of a PLC Company or has any
agreement, arrangement or understanding (whether or not in writing) with any PLC
Company (or any of their Affiliates or Associates) with respect to acquiring,
holding, voting or disposing of any securities of the Company or (ii) any
employee benefit or stock ownership plan of PLC or of any of its Subsidiaries or
any entity holding Common Shares for or pursuant to the terms of any such plan.
(c) "APPLICABLE PERCENTAGE" means 15%; provided, however, that, with
respect to the PLC Companies only, (i) in the event that a PLC
Representation Termination shall have occurred such percentage shall
be equal to the sum of (A) the percentage of outstanding Common
Shares that are Beneficially Owned by the PLC Companies as of the
date of the PLC Representation Termination and (B) the percentage of
additional outstanding Common Shares which the PLC Companies could
have acquired Beneficial Ownership as of the date of the PLC
Representation Termination (assuming that the provisions of Article
IV of the Governance Agreement were in full force and effect as of
such date) and (C) 1%,
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(ii) in the event that a PLC Wilful Breach shall have occurred, such
percentage shall be equal to the percentage of outstanding Common
Shares which the PLC Companies could have Beneficially Owned without
breaching Article IV of the Governance Agreement (assuming that the
provisions of Article IV of the Governance Agreement were in full
force and effect as of such date), and (iii) in the event that a PLC
Fiduciary Termination shall have occurred, such percentage shall be
equal to 1% plus the greater of (A) 42% and (B) the sum of (y) the
percentage of outstanding Common Shares that are Beneficially Owned
by the PLC Companies as of the date of the PLC Fiduciary Termination
and (z) the percentage of additional outstanding Common Shares which
the PLC Companies could have acquired Beneficial Ownership as of the
date of the PLC Fiduciary Termination (assuming that the provisions
of Article IV of the Governance Agreement were in full force and
effect as of such date).
(d) A Person will be deemed the "BENEFICIAL OWNER" of, and to
"BENEFICIALLY OWN," any securities:
(i) the beneficial ownership of which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, warrants, options or other rights (in each case, other
than upon exercise or exchange of the Rights); provided,
however, that a Person will not be deemed the Beneficial Owner
of, or to Beneficially Own, 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; or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has or shares the right to
vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if such
Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in
writing) with such other Person (or any of such other Person's
Affiliates or Associates) with respect to acquiring, holding,
voting or disposing of any securities of the Company;
provided, however, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (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 of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of
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such Person's status as a "clearing agency," as defined in Section 3(a)(23) of
the Exchange Act; provided further, however, that nothing in this paragraph (c)
will cause a Person engaged in business as an underwriter of securities to be
the Beneficial Owner of, or to Beneficially Own, any securities acquired through
such Person's participation in good faith in an underwriting syndicate until the
expiration of 40 calendar days after the date of such acquisition, or such later
date as the Directors of the Company may determine in any specific case.
(e) "BUSINESS DAY" means any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York
(or such other state in which the principal office of the
Rights Agent is located) are authorized or obligated by law or
executive order to close.
(f) "CLOSE OF BUSINESS" on any given date means 5:00 p.m., Eastern
time, on such date; provided, however, that if such date is
not a Business Day it means 5:00 p.m., Eastern time, on the
next succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the Company means
the shares of Common Stock, par value $0.0001 per share, of
the Company; provided, however, that if the Company is the
continuing or surviving corporation in a transaction described
in Section 13(a)(ii), "Common Shares" when used with reference
to the Company means shares of the capital stock or units of
the equity interests with the greatest aggregate voting power
of the Company. "Common Shares" when used with reference to
any corporation or other legal entity other than the Company,
including an Issuer, means shares of the capital stock or
units of the equity interests with the greatest aggregate
voting power of such corporation or other legal entity.
(h) "COMPANY" means ▇▇▇▇▇▇▇▇ American Inc., a North Carolina
corporation.
(i) "DISTRIBUTION DATE" means the earlier of: (i) the Close of
Business on the tenth calendar day following the Share
Acquisition Date, or (ii) the Close of Business on the tenth
Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by
the Board of Directors of the Company) after the commencement
of a tender or exchange offer by any Person (other than the
Company or any Related Person), if upon the consummation
thereof such Person would be the Beneficial Owner of a
percentage equal to or greater than the Applicable Percentage
of the then-outstanding Common Shares.
(j) "EFFECTIVE TIME" has the meaning set forth in the Business
Combination Agreement, dated as of October 27, 2003, between
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ Tobacco Corporation and ▇.▇. ▇▇▇▇▇▇▇▇
Tobacco Holdings, Inc., a Delaware corporation, as it may be
amended from time to time.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(l) "EXPIRATION DATE" means the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which
the Rights are redeemed as provided in
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Section 23, and (iii) the time at which all exercisable Rights
are exchanged as provided in Section 24.
(m) "FINAL EXPIRATION DATE" means the tenth anniversary of the
Record Date.
(n) "FLIP-IN EVENT" means any event described in clauses (A), (B)
or (C) of Section 11(a)(ii).
(o) "GOVERNANCE AGREEMENT" means the Governance Agreement, dated
as of July 30, 2004, among ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ Tobacco
Corporation, a Delaware corporation, PLC, and the Company, as
it may be amended from time to time.
(p) "FLIP-OVER EVENT" means any event described in clauses (i),
(ii) or (iii) of Section 13(a).
(q) "ISSUER" has the meaning set forth in Section 13(b).
(r) "NASDAQ" means The Nasdaq Stock Market.
(s) "PERSON" means any individual, firm, corporation or other
legal entity, and includes any successor (by merger or
otherwise) of such entity.
(t) "PLC" means British American Tobacco p.l.c., a public limited
company incorporated under the laws of England and Wales.
(u) "PLC AUTOMATIC TERMINATION" means the termination of the
Governance Agreement by PLC pursuant to Section 6.11(a)(i)
thereof.
(v) "PLC COMPANIES" means PLC and each of its Subsidiaries (other
than the Company and its Subsidiaries).
(w) "PLC FIDUCIARY TERMINATION" means the termination of the
Governance Agreement by PLC pursuant to Section 6.11(b)(i)
thereof.
(x) "PLC REPRESENTATION TERMINATION" means the termination of the
Governance Agreement by PLC pursuant to Section 6.11(b)(ii)
thereof.
(y) "PLC WILFUL BREACH" means any wilful, deliberate and material
breach by any PLC Company of its obligations under Section
4.01 of the Governance Agreement (subject to any applicable
exceptions set forth in Section 4.03 of the Governance
Agreement).
(z) "PREFERRED SHARES" means shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of
the Company having the rights and preferences set forth in the
Articles of Incorporation of the Company attached as Exhibit
A.
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(aa) "PURCHASE PRICE" means initially $130.00 per one one-hundredth
of a Preferred Share, subject to adjustment from time to time
as provided in this Agreement.
(bb) "RECORD DATE" has the meaning set forth in the Recitals to
this Agreement.
(cc) "REDEMPTION PRICE" means $.01 per Right, subject to adjustment
by resolution of the Board of Directors of the Company to
reflect any stock split, stock dividend or similar transaction
occurring after the Record Date.
(dd) "RELATED PERSON" means (i) any Subsidiary of the Company or
(ii) any employee benefit or stock ownership plan of the
Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan.
(ee) "RIGHT" has the meaning set forth in the Recitals to this
Agreement.
(ff) "RIGHT CERTIFICATES" means certificates evidencing the Rights,
in substantially the form attached as Exhibit B.
(gg) "RIGHTS AGENT" means The Bank of New York, unless and until a
successor Rights Agent has become such pursuant to the terms
of this Agreement, and thereafter, "Rights Agent" means such
successor Rights Agent.
(hh) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(ii) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company (by press release, filing made
with the Securities and Exchange Commission or otherwise) that
an Acquiring Person has become such.
(jj) "SUBSIDIARY" when used with reference to any Person means any
corporation or other legal entity of which a majority of the
voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person;
provided, however, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any
corporation or other legal entity of which at least 20% of the
voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person.
(kk) "TRADING DAY" means any day on which the principal national
securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business
or, if the Common Shares are not listed or admitted to trading
on any national securities exchange, a Business Day.
(ll) "TRIGGERING EVENT" means any Flip-in Event or Flip-over Event.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3, will also be, prior to the Distribution
Date, the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts
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such appointment and hereby certifies that it complies with the
requirements of the New York Stock Exchange governing transfer agents and
registrars. The Company may from time to time act as Co-Rights Agent or
appoint such Co-Rights Agents as it may deem necessary or desirable. Any
actions which may be taken by the Rights Agent pursuant to the terms of
this Agreement may be taken by any such Co-Rights Agent. To the extent
that any Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent will be entitled to all of the rights and protections of,
and subject to all of the applicable duties and obligations imposed upon,
the Rights Agent pursuant to the terms of this Agreement.
3. Issue of Right Certificates. (a) Until the Distribution Date, (i)
the Rights will be evidenced by the certificates representing Common
Shares registered in the names of the record holders thereof (which
certificates representing Common Shares will also be deemed to be Right
Certificates), (ii) the Rights will be transferable only in connection
with the transfer of the underlying Common Shares, and (iii) the surrender
for transfer of any certificates evidencing Common Shares in respect of
which Rights have been issued will also constitute the transfer of the
Rights associated with the Common Shares evidenced by such certificates.
(b) Rights will be issued by the Company in respect of all Common Shares
(other than Common Shares issued upon the exercise or exchange of
any Right) issued or delivered by the Company (whether originally
issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date and the
Expiration Date. Certificates evidencing such Common Shares will
have stamped on, impressed on, printed on, written on, or otherwise
affixed to them the following legend or such similar legend as the
Company may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or
transaction reporting system on which the Common Shares may from
time to time be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between ▇▇▇▇▇▇▇▇ American Inc.
and The Bank of New York, dated as of July 30, 2004 (the "RIGHTS
AGREEMENT"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of ▇▇▇▇▇▇▇▇ American Inc. The Rights are not exercisable prior to
the occurrence of certain events specified in the Rights Agreement. Under
certain circumstances, as set forth in the Rights Agreement, such Rights
may be redeemed, may be exchanged, may expire, may be amended, or may be
evidenced by separate certificates and no longer be evidenced by this
Certificate. ▇▇▇▇▇▇▇▇ American Inc. will mail to the holder of this
Certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances as set forth in the Rights
Agreement, Rights that are or were beneficially owned
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by an Acquiring Person or any Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement) may become null
and void.
(c) Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Right Certificate issued at
any time upon the transfer of any Rights to an Acquiring Person or
any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate and any Right Certificate
issued pursuant to Section 6 or 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to
in this sentence, shall be subject to and contain the following
legend or such similar legend as the Company may deem appropriate
and as is not inconsistent with the provisions of this Agreement, or
as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section 11(a)(ii)
or Section 13 of the Rights Agreement.
(d) As promptly as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign and the
Company will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class, insured, postage prepaid mail, to
each record holder of Common Shares as of the Close of Business on
the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one Right for
each Common Share so held, subject to adjustment as provided herein.
As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(e) In the event that the Company purchases or otherwise acquires any
Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares will be deemed
canceled and retired so that the Company will not be entitled to
exercise any Rights associated with the Common Shares so purchased
or acquired.
4. Form of Right Certificates. The Right Certificates (and the form of
election to purchase and the form of assignment to be printed on the
reverse thereof) will be substantially in the form attached as Exhibit B
with such changes and marks of identification or designation, and such
legends, summaries or endorsements printed thereon, as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or transaction reporting system on which
the Rights may from time to
8
time be listed or quoted, or to conform to usage. Subject to the
provisions of Section 22, the Right Certificates, whenever issued, on
their face will entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as are set forth therein at the
Purchase Price set forth therein, but the Purchase Price, the number and
kind of securities issuable upon exercise of each Right and the number of
Rights outstanding will be subject to adjustment as provided herein.
5. Countersignature and Registration. (a) The Right Certificates will
be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by facsimile
signature, and will have affixed thereto the Company's seal or a facsimile
thereof which will be attested by the Secretary or an Assistant Secretary
of the Company, either manually or by facsimile signature. The Right
Certificates will be manually countersigned by the Rights Agent and will
not be valid for any purpose unless so countersigned. In case any officer
of the Company who signed any of the Right Certificates ceases to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and
delivered by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of
such Right Certificate, is a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at the principal office of the Rights Agent designated
for such purpose and at such other offices as may be required to
comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange or any transaction reporting system on which the Rights may
from time to time be listed or quoted, books for registration and
transfer of the Right Certificates issued hereunder. Such books will
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of
the Right Certificates and the date of each of the Right
Certificates.
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Subject to
the provisions of Sections 7(d) and 14, at any time after the Close of
Business on the Distribution Date and prior to the Expiration Date, any
Right Certificate or Right Certificates representing exercisable Rights
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share (or
other securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any such Right Certificate or
Rights Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right
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Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent designated for such
purpose. Thereupon or as promptly as practicable thereafter, subject to
the provisions of Sections 7(d) and 14, the Company will prepare, execute
and deliver to the Rights Agent, and the Rights Agent will countersign and
deliver, a Right Certificate or Right Certificates, as the case may be, as
so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
them, and, if requested by the Company, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will prepare, execute and
deliver a new Right Certificate of like tenor to the Rights Agent
and the Rights Agent will countersign and deliver such new Right
Certificate to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a)
The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date and prior to the Expiration
Date, upon surrender of the Right Certificate, with the form of election
to purchase on the reverse side thereof duly executed, to the Rights Agent
at the office or offices of the Rights Agent designated for such purpose,
together with payment in cash, in lawful money of the United States of
America by certified check or bank draft payable to the order of the
Company, equal to the sum of (i) the exercise price for the total number
of securities as to which such surrendered Rights are exercised and (ii)
an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with the provisions of
Section 9(d).
(b) Upon receipt of a Right Certificate representing exercisable Rights
with the form of election to purchase duly executed, accompanied by
payment as described above, the Rights Agent will promptly (i)
requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent) certificates
representing the number of one one-hundredths of a Preferred Share
to be purchased (and the Company hereby irrevocably authorizes and
directs its transfer agent to comply with all such requests), or, if
the Company elects to deposit Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share
as are to be purchased (and the Company hereby irrevocably
authorizes and directs such depositary agent to comply with all such
requests), (ii) after receipt of such certificates (or depositary
receipts, as the case may be), cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate,
10
registered in such name or names as may be designated by such
holder, (iii) when appropriate, requisition from the Company or any
transfer agent therefor (or make available, if the Rights Agent is
the transfer agent) certificates representing the number of
equivalent common shares to be issued in lieu of the issuance of
Common Shares in accordance with the provisions of Section
11(a)(iii), (iv) when appropriate, after receipt of such
certificates, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, (v) when
appropriate, requisition from the Company the amount of cash to be
paid in lieu of the issuance of fractional shares in accordance with
the provisions of Section 14 or in lieu of the issuance of Common
Shares in accordance with the provisions of Section 11(a)(iii), (vi)
when appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate, and (vii)
when appropriate, deliver any due ▇▇▇▇ or other instrument provided
to the Rights Agent by the Company for delivery to the registered
holder of such Right Certificate as provided by Section 11(l).
(c) In case the registered holder of any Right Certificate exercises
less than all the Rights evidenced thereby, the Company will
prepare, execute and deliver a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised and the Rights
Agent will countersign and deliver such new Right Certificate to the
registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company will be obligated to undertake any
action with respect to any purported transfer, split up, combination
or exchange of any Right Certificate pursuant to Section 6 or
exercise of a Right Certificate as set forth in this Section 7
unless the registered holder of such Right Certificate has (i)
completed and signed the certificate following the form of
assignment or the form of election to purchase, as applicable, set
forth on the reverse side of the Right Certificate surrendered for
such transfer, split up, combination, exchange or exercise and (ii)
provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company may reasonably request.
8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of
its stock transfer agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
will be canceled by it, and no Right Certificates will be issued in lieu
thereof except as expressly permitted by the provisions of this Agreement.
The Company will deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent will so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent will deliver all canceled Right
Certificates to the Company, or will, at the written request of the
Company, destroy such canceled
11
Right Certificates, and in such case will deliver a certificate of
destruction thereof to the Company.
9. Company Covenants Concerning Securities and Rights. The Company
covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares
held in its treasury, a number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights
in accordance with Section 7.
(b) So long as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable
upon the exercise of the Rights may be listed on a national
securities exchange, or quoted on Nasdaq, it will endeavor to cause,
from and after such time as the Rights become exercisable, all
securities reserved for issuance upon the exercise of Rights to be
listed on such exchange, or quoted on Nasdaq, upon official notice
of issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure that all
Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) delivered upon
exercise of Rights, at the time of delivery of the certificates for
such securities, will be (subject to payment of the Purchase Price)
duly authorized, validly issued, fully paid and nonassessable
securities.
(d) It will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates and of any
certificates representing securities issued upon the exercise of
Rights; provided, however, that the Company will not be required to
pay any transfer tax or charge which may be payable in respect of
any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary
receipts representing securities issued upon the exercise of Rights
in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue
or deliver any certificates or depositary receipts representing
securities issued upon the exercise of any Rights until any such tax
or charge has been paid (any such tax or charge being payable by the
holder of such Right Certificate at the time of surrender) or until
it has been established to the Company's reasonable satisfaction
that no such tax is due.
(e) It will use its best efforts (i) to file on an appropriate form, as
soon as practicable following the later of the Share Acquisition
Date and the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise
of the Rights, (ii) to cause such registration statement to become
effective as soon as practicable after such filing, and (iii) to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which
12
the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend,
for a period of time after the date set forth in clause (i) of the
first sentence of this Section 9(e), the exercisability of the
Rights in order to prepare and file such registration statement and
to permit it to become effective. Upon any such suspension, the
Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. In addition, if the Company determines that a
registration statement should be filed under the Securities Act or
any state securities laws following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights in
each relevant jurisdiction until such time as a registration
statement has been declared effective and, upon any such suspension,
the Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. Notwithstanding anything in this Agreement to the
contrary, the Rights will not be exercisable in any jurisdiction if
the requisite registration or qualification in such jurisdiction has
not been effected or the exercise of the Rights is not permitted
under applicable law.
(f) Notwithstanding anything in this Agreement to the contrary, after
the later of the Share Acquisition Date and the Distribution Date it
will not take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such
action will eliminate or otherwise diminish the benefits intended to
be afforded by the Rights.
(g) In the event that the Company is obligated to issue other securities
of the Company and/or pay cash pursuant to Section 11, 13, 14 or 24
it will make all arrangements necessary so that such other
securities and/or cash are available for distribution by the Rights
Agent, if and when appropriate.
10. Record Date. Each Person in whose name any certificate representing
Preferred Shares (or Common Shares and/or other securities, as the case
may be) is issued upon the exercise of Rights will for all purposes be
deemed to have become the holder of record of the Preferred Shares (or
Common Shares and/or other securities, as the case may be) represented
thereby on, and such certificate will be dated, the date upon which the
Right Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a
date upon which the transfer books of the Company for the Preferred Shares
(or Common Shares and/or other securities, as the case may be) are closed,
such Person will be deemed to have become the record holder of such
securities on, and such certificate will be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred
Shares (or Common Shares and/or other securities, as the case may be) are
open. Prior to the exercise of the Rights evidenced
13
thereby, the holder of a Right Certificate will not be entitled to any
rights of a holder of any security for which the Rights are or may become
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive rights,
and will not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Securities or
Number of Rights. The Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section
11.
(a) (i) In the event that the Company at any time after the Record
Date (A) declares a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivides the outstanding Preferred Shares, (C) combines the
outstanding Preferred Shares into a smaller number of Preferred Shares, or
(D) issues any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), 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/or the number and/or kind of shares of capital stock
issuable on such date upon exercise of a Right, will be proportionately
adjusted so that the holder of any Right exercised after such time is
entitled to receive upon payment of the Purchase Price then in effect the
aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
transfer books of the Company for the Preferred Shares were open, the
holder of such Right would have owned upon such exercise (and, in the case
of a reclassification, would have retained after giving effect to such
reclassification) and would have been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares
of capital stock issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) or Section 13, the adjustment provided for in this
Section 11(a)(i) will be in addition to, and will be made prior to, any
adjustment required pursuant to Section 11(a)(ii) or Section 13.
(i) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or Associate of
any Acquiring Person, directly or indirectly, (1) merges
into the Company or otherwise combines with the Company
and the Company is the continuing or surviving
corporation of such merger or combination (other than in
a transaction subject to Section 13), (2) merges or
otherwise combines with any Subsidiary of the Company,
(3) in one or more transactions (otherwise than in
connection with the exercise, exchange or conversion of
securities exercisable or
14
exchangeable for or convertible into shares of any class
of capital stock of the Company or any of its
Subsidiaries) transfers cash, securities or any other
property to the Company or any of its Subsidiaries in
exchange (in whole or in part) for shares of any class
of capital stock of the Company or any of its
Subsidiaries or for securities exercisable or
exchangeable for or convertible into shares of any class
of capital stock of the Company or any of its
Subsidiaries, or otherwise obtains from the Company or
any of its Subsidiaries, with or without consideration,
any additional shares of any class of capital stock of
the Company or any of its Subsidiaries or securities
exercisable or exchangeable for or convertible into
shares of any class of capital stock of the Company or
any of its Subsidiaries (otherwise than as part of a pro
rata distribution to all holders of shares of any class
of capital stock of the Company, or any of its
Subsidiaries), (4) sells, purchases, leases, exchanges,
mortgages, pledges, transfers or otherwise disposes (in
one or more transactions) to, from, with or of, as the
case may be, the Company or any of its Subsidiaries
(otherwise than in a transaction subject to Section 13),
any property, including securities, on terms and
conditions less favorable to the Company than the
Company would be able to obtain in an arm's-length
transaction with an unaffiliated third party, (5)
receives any compensation from the Company or any of its
Subsidiaries other than compensation as a director or a
regular full-time employee, in either case at rates
consistent with the Company's (or its Subsidiaries')
past practices, or (6) receives the benefit, directly or
indirectly (except proportionately as a stockholder), of
any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantage provided by the Company or any of its
Subsidiaries; or
(C) during such time as there is an Acquiring Person, there
is any reclassification of securities of the Company
(including any reverse stock split), or any
recapitalization of the Company, or any merger or
consolidation of the Company with any of its
Subsidiaries, or any other transaction or series of
transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person), other than a transaction
subject to Section 13, which has the effect, directly or
indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
Subsidiaries, or of securities exercisable or
exchangeable for or convertible into equity securities
of the Company or any of its Subsidiaries, of which an
Acquiring Person, or any Affiliate or Associate of any
Acquiring Person, is the Beneficial Owner;
15
then, and in each such case, from and after the latest of the Distribution
Date, the Share Acquisition Date and the date of the occurrence of such
Flip-in Event, proper provision will be made so that each holder of a
Right, except as provided below, will thereafter have the right to
receive, upon exercise thereof in accordance with the terms of this
Agreement at an exercise price per Right equal to the product of the
then-current Purchase Price multiplied by the number of one one-hundredths
of a Preferred Share for which a Right was exercisable immediately prior
to the date of the occurrence of such Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, the product of the
then-current Purchase Price multiplied by the number of one one-hundredths
of a Preferred Share for which a Right was exercisable immediately prior
to the date of the first occurrence of a Flip-in Event), in lieu of
Preferred Shares, such number of Common Shares as equals the result
obtained by (x) multiplying the then-current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the occurrence of such
Flip-in Event (or, if any other Flip-in Event shall have previously
occurred, multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the first occurrence of a Flip-in Event),
and dividing that product by (y) 50% of the current per share market price
of the Common Shares (determined pursuant to Section 11(d)) on the date of
the occurrence of such Flip-in Event. Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (A) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (B) a
transferee of any Acquiring Person (or any such Affiliate or Associate)
who becomes a transferee after the occurrence of a Flip-in Event, or (C) a
transferee of any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the occurrence of a
Flip-in Event pursuant to either (1) a transfer from an Acquiring Person
to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Directors of the Company
have determined is part of a plan, arrangement or understanding which has
the purpose or effect of avoiding the provisions of this Section
11(a)(ii), and subsequent transferees of any of such Persons, will be void
without any further action and any holder of such Rights will thereafter
have no rights whatsoever with respect to such Rights under any provision
of this Agreement. The Company will use all reasonable efforts to ensure
that the provisions of this Section 11(a)(ii) are complied with, but will
have no liability to any holder of Right Certificates or any other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
Upon the occurrence of a Flip-in Event, no Right Certificate that
represents Rights that are or have become void pursuant to the provisions
of this Section 11(a)(ii) will thereafter be issued pursuant to Section 3
or Section 6, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the provisions
of this Section 11(a)(ii) will be canceled. Upon the occurrence of a
Flip-over Event, any Rights that shall not have been previously exercised
pursuant to this Section 11(a)(ii) shall
16
thereafter be exercisable only pursuant to Section 13 and not pursuant to
this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are not
sufficient Common Shares authorized but unissued or issued but not
outstanding to permit the issuance of all the Common Shares issuable in
accordance with Section 11(a)(ii) upon the exercise of a Right, the Board
of Directors of the Company will use its best efforts promptly to
authorize and, subject to the provisions of Section 9(e), make available
for issuance additional Common Shares or other equity securities of the
Company having equivalent voting rights and an equivalent value (as
determined in good faith by the Board of Directors of the Company) to the
Common Shares (for purposes of this Section 11(a)(iii), "EQUIVALENT COMMON
SHARES"). In the event that equivalent common shares are so authorized,
upon the exercise of a Right in accordance with the provisions of Section
7, the registered holder will be entitled to receive (A) Common Shares, to
the extent any are available, and (B) a number of equivalent common
shares, which the Board of Directors of the Company has determined in good
faith to have a value equivalent to the excess of (x) the aggregate
current per share market value on the date of the occurrence of the most
recent Flip-in Event of all the Common Shares issuable in accordance with
Section 11(a)(ii) upon the exercise of a Right (the "EXERCISE VALUE") over
(y) the aggregate current per share market value on the date of the
occurrence of the most recent Flip-in Event of any Common Shares available
for issuance upon the exercise of such Right; provided, however, that if
at any time after 90 calendar days after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of
the most recent Flip-in Event, there are not sufficient Common Shares
and/or equivalent common shares available for issuance upon the exercise
of a Right, then the Company will be obligated to deliver, upon the
surrender of such Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available), equivalent common shares
(to the extent available) and then cash (to the extent permitted by
applicable law and any agreements or instruments to which the Company is a
party in effect immediately prior to the Share Acquisition Date), which
securities and cash have an aggregate value equal to the excess of (1) the
Exercise Value over (2) the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to the date of the
occurrence of the most recent Flip-in Event (or, if any other Flip-in
Event shall have previously occurred, the product of the then-current
Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right would have been exercisable immediately
prior to the date of the occurrence of such Flip-in Event if no other
Flip-in Event had previously occurred). To the extent that any legal or
contractual restrictions prevent the Company from paying the full amount
of cash payable in accordance with the foregoing sentence, the Company
will pay to holders of the Rights as to which such payments are being made
all amounts which are not then restricted on a pro rata basis and will
continue to make payments on a pro rata basis as promptly as funds become
available until the full amount due to each such Rights holder has been
paid.
(b) In the event that the Company fixes a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
17
purchase Preferred Shares (or securities having equivalent rights,
privileges and preferences as the Preferred Shares (for purposes of
this Section 11(b), "EQUIVALENT PREFERRED SHARES")) or securities
convertible into Preferred Shares or equivalent preferred shares at
a price per Preferred Share or equivalent preferred share (or having
a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (determined
pursuant to Section 11(d)) on such record date, the Purchase Price
to be in effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which is the number of
Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to
be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current per share market price and the denominator of which is the
number of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock issuable upon exercise of one
Right. In case such subscription price may be paid in a
consideration part or all of which is in a form other than cash, the
value of such consideration will be as determined in good faith by
the Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent. Preferred
Shares owned by or held for the account of the Company will not be
deemed outstanding for the purpose of any such computation. Such
adjustment will be made successively whenever such a record date is
fixed, and in the event that such rights, options or warrants are
not so issued, the Purchase Price will be adjusted to be the
Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In the event that the Company fixes a record date for the making of
a distribution to all holders of Preferred Shares (including any
such distribution made in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash (other than a regular periodic cash
dividend), assets, stock (other than a dividend payable in Preferred
Shares) or subscription rights, options or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect
after such record date will be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which is the current per share market
price of the Preferred Shares (as determined pursuant to Section
11(d)) on such record date or, if earlier, the date on which
Preferred Shares begin to trade on an ex-dividend or when issued
basis for such distribution, less the fair market value (as
determined in good faith by the Board of Directors of the Company,
whose determination will be described in a statement filed with the
Rights Agent) of the portion of the evidences of indebtedness, cash,
assets or
18
stock so to be distributed or of such subscription rights, options
or warrants applicable to one Preferred Share, and the denominator
of which is such current per share market price of the Preferred
Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate
par value of the shares of capital stock issuable upon exercise of
one Right. Such adjustments will be made successively whenever such
a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price will again be adjusted to be the
Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder, the "CURRENT PER
SHARE MARKET PRICE" of Common Shares on any date will 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 in the event that the current per share market price of the
Common Shares is determined during a period following the announcement by
the issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into
such Common Shares (other than the Rights) or (B) any subdivision,
combination or reclassification of such Common Shares, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price will be appropriately adjusted to take into account
ex-dividend trading or to reflect the current per share market price per
Common Share equivalent. The closing price for each day will be the last
sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Common Shares are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Common
Shares are listed or admitted to trading or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by Nasdaq or
such other system then in use, or, if on any such date the Common Shares
are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Common Shares selected by the Board of Directors of the
Company. If the Common Shares are not publicly held or not so listed or
traded, or are not the subject of available bid and asked quotes, "current
per share market price" will mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent.
(ii) For the purpose of any computation hereunder, the "CURRENT PER
SHARE MARKET PRICE" of the Preferred Shares will be determined
in the same manner as set forth above for Common Shares in
Section 11(d)(i), other than the last sentence thereof. If the
current per share market price of the
19
Preferred Shares cannot be determined in the manner provided
above, the "current per share market price" of the Preferred
Shares will be conclusively deemed to be an amount equal to
the current per share market price of the Common Shares
multiplied by one hundred (as such number may be appropriately
adjusted to reflect events such as stock splits, stock
dividends, recapitalizations or similar transactions relating
to the Common Shares occurring after the date of this
Agreement). If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, or the
subject of available bid and asked quotes, "current per share
market price" of the Preferred Shares will mean the fair value
per share as determined in good faith by the Board of
Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent. For all
purposes of this Agreement, the current per share market price
of one one-hundredth of a Preferred Share will be equal to the
current per share market price of one Preferred Share divided
by one hundred.
(e) Except as set forth below, no adjustment in the Purchase Price will
be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required
to be made will be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 will
be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of a Common Share or other
security, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 will
be made no later than the earlier of (i) three years from the date
of the transaction which requires such adjustment and (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised becomes entitled to receive
any securities of the Company other than Preferred Shares,
thereafter the number and/or kind of such other securities so
receivable upon exercise of any Right (and/or the Purchase Price in
respect thereof) will 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 Preferred Shares (and the Purchase
Price in respect thereof) contained in this Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares (and the Purchase Price in respect thereof) will
apply on like terms to any such other securities (and the Purchase
Price in respect thereof).
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder will evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preferred Share issuable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
20
(h) Unless the Company has exercised its election as provided in Section
11(i), upon each adjustment of the Purchase Price pursuant to
Section 11(b) or Section 11(c), each Right outstanding immediately
prior to the making of such adjustment will thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest
one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a Preferred Share issuable
upon exercise of a Right immediately prior to such adjustment of the
Purchase Price 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 in substitution for
any adjustment in the number of one one-hundredths of a Preferred
Share issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights will be
exercisable for the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of
the number of Rights will 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 will make a public announcement
of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. Such 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, will be at least 10
calendar days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company will,
as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to the provisions of Section 14, the additional
Rights to which such holders are entitled as a result of such
adjustment, or, at the option of the Company, will cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof if required by
the Company, new Right Certificates evidencing all the Rights to
which such holders are entitled after such adjustment. Right
Certificates so to be distributed will be issued, executed, and
countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and will be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Without respect to any adjustment or change in the Purchase Price
and/or the number and/or kind of securities issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the
21
Purchase Price and the number and kind of securities which were
expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares or below the then par value, if any, of
any other securities of the Company issuable upon exercise of the
Rights, the Company will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Preferred
Shares or such other securities, as the case may be, at such
adjusted Purchase Price.
(l) In any case in which this Section 11 otherwise requires 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 the number of Preferred Shares or
other securities of the Company, if any, issuable upon such exercise
over and above the number of Preferred Shares or other 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 delivers to such holder a due ▇▇▇▇ or
other appropriate instrument evidencing such holder's right to
receive such additional Preferred Shares or other securities upon
the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary, the
Company will be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the
Board of Directors of the Company determines to be advisable in
order that any (i) consolidation or subdivision of the Preferred
Shares, (ii) issuance wholly for cash of Preferred Shares at less
than the current per share market price therefor, (iii) issuance
wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares,
(iv) stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Shares is not taxable to such stockholders.
(n) Notwithstanding anything in this Agreement to the contrary, in the
event that the Company at any time after the Record Date prior to
the Distribution Date (i) pays a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivides the outstanding
Common Shares, (iii) combines the outstanding Common Shares into a
smaller number of shares, or (iv) issues any shares of its capital
stock in a reclassification of the outstanding Common Shares
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), the number of Rights associated with each
Common Share then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, will be proportionately adjusted so
that the number of Rights thereafter associated with each Common
Share following any such event equals the result obtained by
multiplying the number of
22
Rights associated with each Common Share immediately prior to such
event by a fraction the numerator of which is the total number of
Common Shares outstanding immediately prior to the occurrence of the
event and the denominator of which is the total number of Common
Shares outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11(n) will be
made successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.
12. Certificate of Adjusted Purchase Price or Number of Securities.
Whenever an adjustment is made as provided in Section 11 or Section 13,
the Company will promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent
for the Preferred Shares and the Common Shares a copy of such certificate,
and (c) if such adjustment is made after the Distribution Date, mail a
brief summary of such adjustment to each holder of a Right Certificate in
accordance with Section 26.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that:
(i) at any time after a Person has become an Acquiring Person, the
Company consolidates with, or merges with or into, any other
Person and the Company is not the continuing or surviving
corporation of such consolidation or merger; or
(ii) at any time after a Person has become an Acquiring Person, any
Person consolidates with the Company, or merges with or into
the Company, and the Company is the continuing or surviving
corporation of such merger or consolidation and, in connection
with such merger or consolidation, all or part of the Common
Shares is changed into or exchanged for stock or other
securities of any other Person or cash or any other property;
or
(iii) at any time after a Person has become an Acquiring Person, the
Company, directly or indirectly, sells or otherwise transfers
(or one or more of its Subsidiaries sells or otherwise
transfers), in one or more transactions, assets or earning
power (including without limitation securities creating any
obligation on the part of the Company and/or any of its
Subsidiaries) representing in the aggregate more than 50% of
the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons other
than the Company or one or more of its wholly owned
Subsidiaries;
then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and the
date of the occurrence of such Flip-over Event (A) each holder of a Right
thereafter has the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the Share Acquisition Date, such
23
number of duly authorized, validly issued, fully paid, nonassessable and freely
tradeable Common Shares of the Issuer, free and clear of any liens, encumbrances
and other adverse claims and not subject to any rights of call or first refusal,
as equals the result obtained by (x) multiplying the then-current Purchase Price
by the number of one one-hundredths of a Preferred Share for which a Right is
exercisable immediately prior to the Share Acquisition Date and dividing that
product by (y) 50% of the current per share market price of the Common Shares of
the Issuer (determined pursuant to Section 11(d)), on the date of the occurrence
of such Flip-over Event; (B) the Issuer will thereafter be liable for, and will
assume, by virtue of the occurrence of such Flip-over Event, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term "COMPANY"
will thereafter be deemed to refer to the Issuer; and (D) the Issuer will take
such steps (including without limitation the reservation of a sufficient number
of its Common Shares to permit the exercise of all outstanding Rights) in
connection with such consummation as may be necessary to assure that the
provisions hereof are thereafter applicable, as nearly as reasonably may be
possible, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights.
(b) For purposes of this Section 13, "ISSUER" means (i) in the case of
any Flip-over Event described in Sections 13(a)(i) or (ii) above,
the Person that is the continuing, surviving, resulting or acquiring
Person (including the Company as the continuing or surviving
corporation of a transaction described in Section 13(a)(ii) above),
and (ii) in the case of any Flip-over Event described in Section
13(a)(iii) above, the Person that is the party receiving the
greatest portion of the assets or earning power (including without
limitation securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however, that, in any such
case, (A) if (1) no class of equity security of such Person is, at
the time of such merger, consolidation or transaction and has been
continuously over the preceding 12-month period, registered pursuant
to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of
equity security of which is and has been so registered, the term
"Issuer" means such other Person; and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, a class
of equity security of two or more of which are and have been so
registered, the term "Issuer" means whichever of such Persons is the
issuer of the equity security having the greatest aggregate market
value. Notwithstanding the foregoing, if the Issuer in any of the
Flip-over Events listed above is not a corporation or other legal
entity having outstanding equity securities, then, and in each such
case, (x) if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity
securities, then all references to Common Shares of the Issuer will
be deemed to be references to the Common Shares of the corporation
or other legal entity having outstanding equity securities which
ultimately controls the Issuer, and (y) if there is no such
corporation or other legal entity having outstanding equity
securities, (I) proper provision will be made so that the Issuer
creates or otherwise makes available for purposes of the exercise of
the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least
equal to the economic value of the Common Shares which
24
each holder of a Right would have been entitled to receive if the
Issuer had been a corporation or other legal entity having
outstanding equity securities; and (II) all other provisions of this
Agreement will apply to the issuer of such securities as if such
securities were Common Shares.
(c) The Company will not consummate any Flip-over Event if, (i) at the
time of or immediately after such Flip-over Event, there are or
would be any rights, warrants, instruments or securities outstanding
or any agreements or arrangements in effect which would eliminate or
substantially diminish the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after such
Flip-over Event, the stockholders of the Person who constitutes, or
would constitute, the Issuer for purposes of Section 13(a) shall
have received a distribution of Rights previously owned by such
Person or any of its Affiliates or Associates, or (iii) the form or
nature of the organization of the Issuer would preclude or limit the
exercisability of the Rights. In addition, the Company will not
consummate any Flip-over Event unless the Issuer has a sufficient
number of authorized Common Shares (or other securities as
contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights
in accordance with this Section 13 and unless prior to such
consummation the Company and the Issuer have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms
set forth in subsections (a) and (b) of this Section 13 and further
providing that as promptly as practicable after the consummation of
any Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under the
Securities Act with respect to the Rights and the
securities issuable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such
registration statement to (1) become effective as soon
as practicable after such filing and (2) remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration
Date;
(B) take all such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the
exercisability of the Rights; and
(C) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates
which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a
Flip-in Event, except for Rights that have become void pursuant to
Section 11(a)(ii), Rights that shall not have been previously
exercised will cease to be exercisable in the manner provided in
25
Section 11(a)(ii) and will thereafter be exercisable in the manner
provided in Section 13(a).
14. Fractional Rights and Fractional Securities. (a) The Company will
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company will pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional
Rights otherwise would be issuable, an amount in cash equal to the same
fraction of the current market value of one Right. For the purposes of
this Section 14(a), the current market value of one Right is the closing
price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights otherwise would have been issuable. The
closing price for any day is the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use, or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If the Rights are not publicly held or are not
so listed or traded, or are not the subject of available bid and asked
quotes, the current market value of one Right will mean the fair value
thereof as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed with
the Rights Agent.
(b) The Company will not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or
to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares
in integral multiples of one one-hundredth of a Preferred Share may,
at the election of the Company, be evidenced by depositary receipts
pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement provides
that the holders of such depositary receipts have all the rights,
privileges and preferences to which they are entitled as beneficial
owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the
Company may pay to any Person to whom or which such fractional
Preferred Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of one Preferred
Share. For purposes of this Section 14(b), the current market value
of one Preferred Share is
26
the closing price of the Preferred Shares (as determined in the same
manner as set forth for Common Shares in the second sentence of
Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise; provided, however, that if the closing price of
the Preferred Shares cannot be so determined, the closing price of
the Preferred Shares for such Trading Day will be conclusively
deemed to be an amount equal to the closing price of the Common
Shares (determined pursuant to the second sentence of Section
11(d)(i)) for such Trading Day multiplied by one hundred (as such
number may be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar transactions
relating to the Common Shares occurring after the date of this
Agreement); provided further, however, that if neither the Common
Shares nor the Preferred Shares are publicly held or listed or
admitted to trading on any national securities exchange, or the
subject of available bid and asked quotes, the current market value
of one Preferred Share will mean the fair value thereof as
determined in good faith by the Board of Directors of the Company,
whose determination will be described in a statement filed with the
Rights Agent.
(c) Following the occurrence of a Triggering Event, the Company will not
be required to issue fractions of Common Shares or other securities
issuable upon exercise or exchange of the Rights or to distribute
certificates which evidence any such fractional securities. In lieu
of issuing any such fractional securities, the Company may pay to
any Person to whom or which such fractional securities would
otherwise be issuable an amount in cash equal to the same fraction
of the current market value of one such security. For purposes of
this Section 14(c), the current market value of one Common Share or
other security issuable upon the exercise or exchange of Rights is
the closing price thereof (as determined in the same manner as set
forth for Common Shares in the second sentence of Section 11(d)(i))
for the Trading Day immediately prior to the date of such exercise
or exchange; provided, however, that if neither the Common Shares
nor any such other securities are publicly held or listed or
admitted to trading on any national securities exchange, or the
subject of available bid and asked quotes, the current market value
of one Common Share or such other security will mean the fair value
thereof as determined in good faith by the Board of Directors of the
Company, whose determination will mean the fair value thereof as
will be described in a statement filed with the Rights Agent.
15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18,
are vested in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the holder of any Common Shares), may in his own
behalf and for his own benefit enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right
27
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to this Agreement.
16. Agreement of Rights 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 are transferable only in
connection with the transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificate or the associated Common Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent will be
affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any fractional
Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent will have any liability to any
holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company
will use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Right Certificate will be entitled to vote, receive
dividends, or be deemed for any purpose the holder of Preferred Shares or
any other securities of the Company which may at any time be issuable upon
the exercise of the Rights represented thereby, nor will anything
28
contained herein or in any Right Certificate be construed to confer upon
the holder of any Right Certificate, as such, any of the rights of a
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 Section 25), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions of
this Agreement or exchanged pursuant to the provisions of Section 24.
18. Concerning the Rights Agent. (a) The Company will pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company will also indemnify the
Rights Agent for, and hold it harmless against, any loss, liability, suit,
action, proceeding or expense, incurred without negligence, bad faith, or
willful misconduct on the part of the Rights Agent, for anything done or
omitted to be done by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.
(b) The Rights Agent will be protected and will incur no liability for
or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance
upon any Right Certificate or certificate evidencing Preferred
Shares or Common Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to
be genuine and to be signed, executed, and, where necessary,
verified or acknowledged, by the proper Person or Persons.
19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent is a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions
of Section 21. If at the time such successor Rights Agent succeeds to the
agency created by this Agreement any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the
29
successor Rights Agent; and in all such cases such Right Certificates will
have the full force provided in the Right Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent changes and at such time
any of the Right Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and if
at that time any of the Right Certificates have not been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates will have the full force
provided in the Right Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, will be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will 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 deems 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 Secretary or the Treasurer of the Company and
delivered to the Rights Agent, and such certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct; provided, however, that
the Rights Agent shall not be responsible for any indirect, special,
consequential or punitive damages.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals
are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor will it be responsible
for any breach by the Company of any covenant contained in this
Agreement or in any Right Certificate; nor will it be responsible
for any
30
adjustment required under the provisions of Sections 11 or 13
(including any adjustment which results in Rights becoming void) or
responsible for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any shares of stock or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares
of stock or other securities will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
(f) The Company 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 Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with
its duties, and it will not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement.
Nothing herein will preclude the Rights Agent from acting in any
other capacity for the Company or for any other Person.
(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 will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof. The Rights Agent will not be under
any duty or responsibility to ensure compliance with any applicable
federal or state securities laws in connection with the issuance,
transfer or exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise, transfer, split up, combination or exchange,
either (i) the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or 2
thereof, or (ii) any other actual or suspected irregularity exists,
the
31
Rights Agent will not take any further action with respect to such
requested exercise, transfer, split up, combination or exchange
without first consulting with the Company, and will thereafter take
further action with respect thereto only in accordance with the
Company's written instructions.
21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement
upon 30 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares or the Common Shares by registered
or certified mail, and to the holders of the Right Certificates by first
class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 calendar days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Preferred Shares and the Common Shares by registered
or certified mail, and to the holders of the Right Certificates by first
class mail. If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company will appoint a successor to the Rights
Agent. If the Company fails to make such appointment within a period of 30
calendar days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who
will, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, will be a corporation or other legal entity organized and
doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having a principal office in the
State of New York, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent will 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 will 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 will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Preferred Shares or the Common
Shares, and mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, will 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.
22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the
32
number or kind of securities issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale by the Company of Common Shares
following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold pursuant
to the exercise, exchange or conversion of securities (other than Rights)
issued prior to the Distribution Date which are exercisable or
exchangeable for, or convertible into Common Shares, and (b) may, in any
other case, if deemed necessary, appropriate or desirable by the Board of
Directors of the Company, issue Right Certificates representing an
equivalent number of Rights as would have been issued in respect of such
Common Shares if they had been issued or sold prior to the Distribution
Date, as appropriately adjusted as provided herein as if they had been so
issued or sold; provided, however, that (i) no such Right Certificate will
be issued if, and to the extent that, in its good faith judgment the Board
of Directors of the Company determines that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company
or to the Person to whom or which such Right Certificate otherwise would
be issued and (ii) no such Right Certificate will be issued if, and to the
extent that, appropriate adjustment otherwise has been made in lieu of the
issuance thereof.
23. Redemption. (a) Prior to the Expiration Date, the Board of Directors
of the Company may, at its option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the
Close of Business on the later of (i) the Distribution Date and (ii) Share
Acquisition Date. Any such redemption will be effective immediately upon
the action of the Board of Directors of the Company ordering the same,
unless such action of the Board of Directors of the Company expressly
provides that such redemption will be effective at a subsequent time or
upon the occurrence or nonoccurrence of one or more specified events (in
which case such redemption will be effective in accordance with the
provisions of such action of the Board of Directors of the Company).
(b) Immediately upon the effectiveness of the redemption of the Rights
as provided in Section 23(a), and without any further action and
without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights will be to
receive the Redemption Price, without interest thereon. Promptly
after the effectiveness of the redemption of the Rights as provided
in Section 23(a), the Company will publicly announce such redemption
and, within 10 calendar days thereafter, will give notice of such
redemption 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 Company; provided, however,
that the failure to give, or any defect in, any such notice will not
affect the validity of the redemption of the Rights. Any notice that
is mailed in the manner herein provided will be deemed given,
whether or not the holder receives the notice. The notice of
redemption mailed to the holders of Rights will state the method by
which the payment of the Redemption Price will be made. The Company
may, at its option, pay the Redemption Price in cash, Common Shares
(based upon the current per share market price of the Common Shares
(determined pursuant to Section 11(d)) at the time of redemption),
or any other
33
form of consideration deemed appropriate by the Board of Directors
of the Company (based upon the fair market value of such other
consideration, determined by the Board of Directors of the Company
in good faith) or any combination thereof. The Company may, at its
option, combine the payment of the Redemption Price with any other
payment being made concurrently to holders of Common Shares and, to
the extent that any such other payment is discretionary, may reduce
the amount thereof on account of the concurrent payment of the
Redemption Price. If legal or contractual restrictions prevent the
Company from paying the Redemption Price (in the form of
consideration deemed appropriate by the Board of Directors) at the
time of redemption, the Company will pay the Redemption Price,
without interest, promptly after such time as the Company ceases to
be so prevented from paying the Redemption Price.
24. Exchange. (a) The Board of Directors of the Company may, at its
option, at any time after the later of the Share Acquisition Date and the
Distribution Date, exchange all or part of the then-outstanding and
exercisable Rights (which will not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii)) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the Record Date (such exchange ratio being hereinafter referred to
as the "EXCHANGE RATIO"). Any such exchange will be effective immediately
upon the action of the Board of Directors of the Company ordering the
same, unless such action of the Board of Directors of the Company
expressly provides that such exchange will be effective at a subsequent
time or upon the occurrence or nonoccurrence of one or more specified
events (in which case such exchange will be effective in accordance with
the provisions of such action of the Board of Directors of the Company).
Notwithstanding the foregoing, the Board of Directors of the Company will
not be empowered to effect such exchange at any time after any Person
(other than the Company or any Related Person), who or which, together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the then-outstanding Common Shares.
(b) Immediately upon the effectiveness of the exchange of any Rights as
provided in Section 24(a), and without any further action and
without any notice, the right to exercise such Rights will terminate
and the only right with respect to such Rights thereafter of the
holder of such Rights will be to receive that number of Common
Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. Promptly after the effectiveness
of the exchange of any Rights as provided in Section 24(a), the
Company will publicly announce such exchange and, within 10 calendar
days thereafter, will give notice of such exchange to all of the
holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent; provided, however, that the
failure to give, or any defect in, such notice will not affect the
validity of such exchange. Any notice that is mailed in the manner
herein provided will be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be
effected and, in
34
the event of any partial exchange, the number of Rights which will
be exchanged. Any partial exchange will be effected pro rata based
on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii)) held by each holder
of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any Common Share exchangeable for a Right
(i) equivalent common shares (as such term is used in Section
11(a)(iii)), (ii) cash, (iii) debt securities of the Company, (iv)
other assets, or (v) any combination of the foregoing, in any event
having an aggregate value, as determined in good faith by the Board
of Directors of the Company (whose determination will be described
in a statement filed with the Rights Agent), equal to the current
market value of one Common Share (determined pursuant to Section
11(d)) on the Trading Day immediately preceding the date of the
effectiveness of the exchange pursuant to this Section 24.
25. Notice of Certain Events. (a) If, after the Distribution Date, the
Company proposes (i) to pay any dividend payable in stock of any class to
the holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular periodic cash dividend),
(ii) to offer to the holders of Preferred Shares rights, options or
warrants to subscribe for or to purchase any additional Preferred Shares
or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, 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 assets or earning power (including, without
limitation, securities creating any obligation on the part of the Company
and/or any of its Subsidiaries) representing more than 50% of the assets
and earning power of the Company and its Subsidiaries, taken as a whole,
to any other Person or Persons other than the Company or one or more of
its wholly owned Subsidiaries, (v) to effect the liquidation, dissolution
or winding up of the Company, or (vi) to declare or pay any dividend on
the Common Shares payable in Common Shares or to effect a subdivision,
combination or reclassification of the Common Shares then, in each such
case, the Company will give to each holder of a Right Certificate, to the
extent feasible and in accordance with Section 26, a notice of such
proposed action, which specifies the record date for the purposes of such
stock dividend, distribution or offering of rights, options or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice will be
so given, in the case of any action covered by clause (i) or (ii) above,
at least 10 calendar days prior to the record date for determining holders
of the Preferred Shares for purposes of such action, and, in the case of
any such other action, at least 10 calendar days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever is the
earlier.
35
(b) In case any Triggering Event occurs, then, in any such case, the
Company will as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with
Section 26, a notice of the occurrence of such event, which
specifies the event and the consequences of the event to holders of
Rights.
26. Notices. (a) 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 will 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:
▇▇▇▇▇▇▇▇ American Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
(b) Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Right Certificate to or on the Rights Agent
will 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 Bank of New York
Stock Transfer Administration
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
(c) Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior the Distribution Date, to the holder of
any certificate evidencing Common Shares) will be sufficiently given
or made if sent by first class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry
books of the Company.
27. Supplements and Amendments. Prior to the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to the last
sentence of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent will if the Company so directs,
supplement or amend any provision of this Agreement in any respect without
the approval of any holders of Rights or Common Shares; provided, however,
that, without first obtaining the prior written consent of PLC, the
Company shall not supplement or amend any provision of this Agreement (or
adopt any successor or parallel agreement) if the effect of such
amendment, supplement or adoption would be to impose limitations or
restrictions on the number of Common Shares that may be held by any PLC
Company (except to the extent set forth in this Agreement as the date
hereof), including, but not limited to, decreasing the percentages in the
proviso to the definition of "Applicable Percentage" or amending the last
sentence of the definition of
36
"Acquiring Person". From and after the time at which the Rights cease to
be redeemable pursuant to Section 23, and subject to the last sentence of
this Section 27, the Company may, and the Rights Agent will if the Company
so directs, supplement or amend this Agreement without the approval of any
holders of Rights or Common Shares in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to supplement or
amend the provisions hereunder in any manner which the Company may deem
desirable; provided, however, that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person), and no such supplement or amendment shall cause the Rights again
to become redeemable or cause this Agreement again to become
supplementable or amendable otherwise than in accordance with the
provisions of this sentence. Without limiting the generality or effect of
the foregoing, this Agreement may be supplemented or amended to provide
for such voting powers for the Rights and such procedures for the exercise
thereof, if any, as the Board of Directors of the Company may determine to
be appropriate. Upon the delivery of a certificate from an officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent will
execute such supplement or amendment; provided, however, that the failure
or refusal of the Rights Agent to execute such supplement or amendment
will not affect the validity of any supplement or amendment adopted by the
Board of Directors of the Company, any of which will be effective in
accordance with the terms thereof. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment may be made which
decreases the stated Redemption Price to an amount less than $.01 per
Right.
28. Successors; Certain Covenants. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
will be binding on and inure to the benefit of their respective successors
and assigns hereunder.
29. Benefits of This Agreement. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent,
PLC and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement. This Agreement will be for the sole
and exclusive benefit of the Company, the Rights Agent, and the registered
holders of the Right Certificates (or prior to the Distribution Date, the
Common Shares).
30. Governing Law. This Agreement, each Right and each Right Certificate
issued hereunder will be deemed to be a contract made under the internal
substantive laws of the State of North Carolina and for all purposes will
be governed by and construed in accordance with the internal substantive
laws of such State applicable to contracts to be made and performed
entirely within such State; provided, however, that the rights,
obligations and duties of the Rights Agent hereunder shall be governed and
construed in accordance with the laws of the State of New York.
31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or
37
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement will remain in full force and effect and
will in no way be affected, impaired or invalidated; provided, however,
that nothing contained in this Section 31 will affect the ability of the
Company under the provisions of Section 27 to supplement or amend this
Agreement to replace such invalid, void or unenforceable term, provision,
covenant or restriction with a legal, valid and enforceable term,
provision, covenant or restriction.
32. Descriptive Headings, Etc. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions
hereof. Unless otherwise expressly provided, references herein to
Articles, Sections and Exhibits are to Articles, Sections and Exhibits of
or to this Agreement.
33. Determinations and Actions by the Board. For all purposes of this
Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, will be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company will have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors of
the Company or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including without limitation the right
and power to (i) interpret the provisions of this Agreement and (ii) make
all determinations deemed necessary or advisable for the administration of
this Agreement (including any determination as to whether particular
Rights shall have become void). All such actions, calculations,
interpretations and determinations which are done or made by the Board of
Directors of the Company in good faith will be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and
all other parties.
34. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed
to be an original, and all such counterparts will together constitute but
one and the same instrument.
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
▇▇▇▇▇▇▇▇ AMERICAN INC.
By:_____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Title: Senior Vice President,
Deputy General Counsel
and Secretary
THE BANK OF NEW YORK
By:_____________________________________
Name:
Title:
39
EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
A-1
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R-____________ __________ Rights
NOT EXERCISABLE AFTER JULY 30, 2014 OR EARLIER IF REDEEMED, EXCHANGED OR
AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
Right Certificate
▇▇▇▇▇▇▇▇ AMERICAN INC.
This certifies that [________], or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions, and conditions of the Rights
Agreement, dated as of July 30, 2004 (the "RIGHTS AGREEMENT"), between ▇▇▇▇▇▇▇▇
American Inc., a North Carolina corporation (the "COMPANY"), and The Bank of New
York (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 time) on the Expiration Date (as such term is defined in the
Rights Agreement) at the principal office or offices of the Rights Agent
designated for such purpose, one one-hundredth of a fully paid nonassessable
share of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "PREFERRED SHARES"), of the Company, at a purchase price of $130.00
per one one-hundredth of a Preferred Share (the "PURCHASE PRICE"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed. If this Right Certificate is
exercised in part, the holder will be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole Rights
not exercised. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of the date of the Rights Agreement, based on
the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the number
and/or kind of securities issuable upon the exercise of the Rights evidenced by
this Right Certificate are subject to adjustment upon the occurrence of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by
B-1
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 of the Rights Agent, the Company and the
holders of the Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of the Rights under the circumstances
specified in the Rights Agreement. Copies of the Rights Agreement are on file at
the above-mentioned office of the Rights Agent and can be obtained from the
Company without charge upon written request therefor. Terms used herein with
initial capital letters and not defined herein are used herein with the meanings
ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.
This Right Certificate, with or without other Right Certificates, may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred Shares (other
than fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the option of the Company, be evidenced by depositary
receipts) or other securities issuable upon the exercise of any Right or Rights
evidenced hereby. In lieu of issuing such fractional Preferred Shares or other
securities, the Company may make a cash payment, as provided in the Rights
Agreement.
B-2
No holder of this Right Certificate, as such, will be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor will
anything contained herein or in the Rights Agreement 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 have been exercised in accordance with the
provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ________, ____.
ATTEST: ▇▇▇▇▇▇▇▇ AMERICAN INC.
_________________________________ By:_____________________________________
Name:
Title:
Countersigned:
THE BANK OF NEW YORK
By:_____________________________
Authorized Signature
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers
unto
________________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: __________, ____
________________________________________
Signature
Signature Guaranteed: ____________________________
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [__] are [__] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[__] did [__] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____
________________________________________
Signature
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To ▇▇▇▇▇▇▇▇ American Inc.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of and
delivered to:
Please insert social security
or other identifying number: ___________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:
Please insert social security
or other identifying number: ___________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: __________, ____
________________________________________
Signature
Signature Guaranteed: _____________________________
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [__] are [__] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[__] did [__] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was, or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____
________________________________________
Signature
NOTICE
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN
UPON THE FACE OF THIS RIGHT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17Ad-15 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
B-7
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On July 30, 2004, the Board of Directors of ▇▇▇▇▇▇▇▇ American Inc. adopted
a rights plan and declared a dividend of one preferred share purchase right for
each outstanding share of ▇▇▇▇▇▇▇▇ American Inc.'s Common Stock, par value
$0.0001 per share. The dividend is payable on July 30, 2004 to our stockholders
of record on that date. The terms of the rights and the rights plan are set
forth in a Rights Agreement, dated as of July 30, 2004, by and between ▇▇▇▇▇▇▇▇
American Inc. and The Bank of New York, as rights agent.
Our Board adopted the rights plan to protect our stockholders from
coercive takeover practices or takeover bids that are inconsistent with their
best interests. In general terms, the rights plan imposes a significant penalty
upon any person or group that acquires 15% or more of our outstanding common
stock without the prior approval of our Board. A person or group that acquires a
percentage of our common stock in excess of that threshold is called an
"acquiring person." British American Tobacco p.l.c. will not be deemed to be an
acquiring person unless certain contingencies occur. Any rights held by an
acquiring person are void and may not be exercised.
This summary of rights provides a general description of the rights plan.
Because it is only a summary, this description should be read together with the
entire rights plan, which we incorporate in this summary by reference. We have
filed the rights plan with the Securities and Exchange Commission as an exhibit
to our registration statement on Form 8-A. Upon written request, we will provide
a copy of the rights plan free of charge to any shareholder.
THE RIGHTS. Our Board of Directors authorized the issuance of one right
per each outstanding share of our common stock on July 30, 2004. If the rights
become exercisable prior to a flip-in event or a flip-over event, each right
would allow its holder to purchase from us one one-hundredth of a share of our
Series A Junior Participating Preferred Stock for a purchase price of $130.00.
Each fractional share of preferred stock would give the stockholder
approximately the same dividend, voting and liquidation rights as does one share
of our common stock. Prior to exercise, however, a right does not give its
holder any dividend, voting or liquidation rights.
EXERCISABILITY. The rights will not be exercisable until the earlier of:
- 10 days after a public announcement by ▇▇▇▇▇▇▇▇ American Inc. that a
person or group has become an acquiring person; and
- 10 business days (or a later date determined by our Board) after a person
or group begins a tender or exchange offer that, if completed, would
result in that person or group becoming an acquiring person.
We refer to the date that the rights become exercisable as the "DISTRIBUTION
DATE." Until the distribution date, our common stock certificates will also
evidence the rights and will contain a
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notation to that effect. Any transfer of shares of common stock prior to the
distribution date will constitute a transfer of the associated rights. After the
distribution date, the rights will separate from the common stock and be
evidenced by rights certificates, which we will mail to all holders of rights
that have not become void.
FLIP-IN EVENT. After the distribution date, if a person or group already
is or becomes an acquiring person, rights will no longer be exercisable for
fractional shares of our Series A Junior Participating Preferred Stock. Instead,
all holders of rights, except the acquiring person, may exercise their rights
upon payment of the purchase price to purchase shares of our common stock (or
other securities or assets as determined by the Board) with a market value of
two times the purchase price.
FLIP-OVER EVENT. After the distribution date, if a flip-in event has
already occurred and ▇▇▇▇▇▇▇▇ American Inc. is acquired in a merger or similar
transaction, rights will no longer be exercisable for fractional shares of our
Series A Junior Participating Preferred Stock. Instead, all holders of rights
except the acquiring person may exercise their rights upon payment of the
purchase price, to purchase shares of the acquiring corporation with a market
value of two times the purchase price of the rights.
Rights may be exercised to purchase our preferred shares only after the
distribution date occurs and prior to the occurrence of a flip-in event as
described above. A distribution date resulting from the commencement of a tender
offer or exchange offer described in the second bullet point under
"Exercisability" above could precede the occurrence of a flip-in event, in which
case the rights could be exercised to purchase our preferred shares. A
distribution date resulting from any occurrence described in the first bullet
point under "Exercisability" above would necessarily follow the occurrence of a
flip-in event, in which case the rights could be exercised to purchase shares of
common stock or other securities as described above.
EXPIRATION. The rights will expire on July 30, 2014 unless earlier
redeemed or exchanged.
REDEMPTION. Our Board may redeem all (but not less than all) of the rights
for a redemption price of $0.01 per right at any time before the later of the
distribution date and the date of the first public announcement or disclosure by
▇▇▇▇▇▇▇▇ American Inc. that a person or group has become an acquiring person.
Once the rights are redeemed, the right to exercise rights will terminate, and
the only right of the holders of rights will be to receive the redemption price.
The redemption price will be adjusted if we declare a stock split or issue a
stock dividend on our common stock.
EXCHANGE. After the later of the distribution date and the date of the
first public announcement by ▇▇▇▇▇▇▇▇ American Inc. that a person or group has
become an acquiring person, but before an acquiring person owns 50% or more of
our outstanding common stock, our Board may exchange each right (other than
rights that have become void) for one share of common stock or an equivalent
security.
ANTI-DILUTION PROVISIONS. Our Board may adjust the purchase price of the
preferred shares, the number of preferred shares issuable and the number of
outstanding rights to prevent
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dilution that may occur as a result of certain events, including among others, a
stock dividend, a stock split or a reclassification of the preferred shares or
our common stock. No adjustments to the purchase price of less than 1% will be
made.
AMENDMENTS. Before the time rights cease to be redeemable, subject to
certain limitations on the ability to adopt amendments that affect PLC, our
Board may amend or supplement the rights plan without the consent of the holders
of the rights, except that no amendment may decrease the redemption price below
$0.01 per right. At any time thereafter, our Board may amend or supplement the
rights plan only to cure an ambiguity, to alter time period provisions, to
correct inconsistent provisions or to make any additional changes to the rights
plan, but only to the extent that those changes do not impair or adversely
affect any rights holder and do not result in the rights again becoming
redeemable.
* * *
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