EXHIBIT 1
[Conformed Copy]
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▇▇▇▇▇ COMPANY, INC.
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Rights Agent
Rights Agreement
Dated as of July 29, 1999
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions................................................................ 1
Section 2. Appointment of Rights Agent........................................................ 5
Section 3. Issue of Right Certificates........................................................ 5
Section 4. Form of Right Certificates......................................................... 7
Section 5. Countersignature and Registration.................................................. 8
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates;
Lost, Stolen, Destroyed or Mutilated Right Certificates............................... 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................... 9
Section 8. Cancellation and Destruction of Right Certificates................................. 10
Section 9. Reservation and Availability of Preferred Shares................................... 11
Section 10. Preferred Shares Record Date...................................................... 12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights....... 12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........................ 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............. 22
Section 14. Fractional Rights and Fractional Shares........................................... 24
Section 15. Rights of Action.................................................................. 26
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Section 16. Agreement of Right Holders........................................................ 26
Section 17. Right Certificate Holder Not Deemed a Shareholder................................. 27
Section 18. Concerning the Rights Agent....................................................... 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................... 28
Section 20. Duties of Rights Agent............................................................ 28
Section 21. Change of Rights Agent............................................................ 30
Section 22. Issuance of New Right Certificates................................................ 31
Section 23. Redemption........................................................................ 31
Section 24. Exchange.......................................................................... 32
Section 25. Notice of Certain Events.......................................................... 34
Section 26. Notices........................................................................... 35
Section 27. Supplements and Amendments........................................................ 35
Section 28. Successors........................................................................ 36
Section 29. Benefits of this Agreement........................................................ 36
Section 30. Severability...................................................................... 36
Section 31. Governing Law..................................................................... 36
Section 32. Counterparts...................................................................... 37
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Section 33. Descriptive Headings.............................................................. 37
Exhibit A -- Articles of Amendment of Certificate of Designation, Preferences
and Rights of Series A Junior Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Shares
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RIGHTS AGREEMENT
Agreement, dated as of July 29, 1999, between ▇▇▇▇▇ COMPANY,
INC., a Missouri corporation (the "Company"), and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (individually a
"Right" and collectively the "Rights") for each Common Share (as hereinafter
defined) of the Company outstanding at the Close of Business on August 23,
1999 (the "Record Date"), each Right initially representing the right to
purchase one two-hundredth of a Preferred Share (as hereinafter defined),
upon the terms and subject to the conditions set forth herein, and has
further authorized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of Section 11 hereof) with respect to
each Common Share that shall become outstanding (i) at any time between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date (as such terms are hereinafter defined) or (ii)
upon the exercise or conversion, prior to the earlier of the Redemption Date
or the Final Expiration Date, of any option or other security exercisable for
or convertible into Common Shares, which option or other such security is
outstanding on the Distribution Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares of the Company then outstanding, but shall not include (i)
the Company, (ii) any wholly owned Subsidiary (as such term is hereinafter
defined) of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company, or (iv) any entity holding Common Shares for
or pursuant to the terms of any such plan described in clause (iii) of this
sentence. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then outstanding; PROVIDED, HOWEVER,
that if a Person, together with all Affiliates or Associates of such Person,
shall become the Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding by reason of share acquisitions by the Company and
if such Person or such Person's Affiliates or Associates, after such share
acquisitions by the Company, shall become the Beneficial Owner of any
additional Common Shares of the Company, and, immediately after becoming the
Beneficial Owner
of such additional Common Shares, such Person, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more
of the Common Shares of the Company then outstanding, then such Person
(unless such Person shall be (1) the Company, (2) any wholly owned Subsidiary
of the Company, (3) any employee benefit plan of the Company or of any
Subsidiary of the Company, or (4) any entity holding Common Shares for or
pursuant to the terms of any such plan described in clause (3) of this
sentence) shall be deemed an "Acquiring Person." An entity other than the
Company or any wholly owned Subsidiary of the Company holding Common Shares
for or pursuant to the terms of an employee benefit plan of the Company or of
any Subsidiary of the Company and in addition being the Beneficial Owner of
Common Shares that are not held for or pursuant to the terms of any such plan
shall be deemed to constitute an Acquiring Person, notwithstanding anything
herein stated, if, but only if, it, together with its Affiliates and
Associates, shall be the Beneficial Owner of 15% or more, exclusive of those
Common Shares held by it for or pursuant to the terms of any such plan, of
the Common Shares then outstanding. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of the Common Shares that would otherwise
cause such Person to be an "Acquiring Person" or (B) such Person was aware of
the extent of its Beneficial Ownership 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, and such
Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of
this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," or have beneficial ownership of, any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, including without
limitation securities with respect to which such Person or any of such
Person's Affiliates or Associates has "beneficial ownership" pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to
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any agreement, arrangement or understanding, whether or not in writing
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange
rights, other rights (other than the Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own or to have beneficial
ownership of, any securities pursuant to subparagraph (i), (ii) or
(iii) of this paragraph (c) solely because such securities are
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 (B)
the right to vote or dispose of (including without limitation pursuant
to any agreement, arrangement or understanding (whether or not in
writing)); PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own or have beneficial
ownership of, any security pursuant to subparagraph (i), (ii) or (iii)
of this paragraph (c) solely because of the right to vote such
security pursuant to an agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person
or any of such Person's Affiliates or Associates in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under the
Exchange Act and (2) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report) as being beneficially owned by such Person; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding, whether or not in writing (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the final proviso to subparagraph (ii) of this
paragraph (c)), or disposing of, any securities of the Company.
Notwithstanding anything in these definitions of Beneficial Owner,
beneficially own or beneficial ownership to the contrary, the phrase
"then outstanding," when used with reference to a Person's beneficial
ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person
would be deemed to beneficially own hereunder.
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(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York or
Minnesota are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Minneapolis, Minnesota time, on such date; PROVIDED, HOWEVER, that if such date
is not a Business Day it shall mean 5:00 P.M., Minneapolis, Minnesota time, on
the next succeeding Business Day.
(f) "Common Shares," when used with reference to the Company,
shall mean shares of Common Stock, $.10 par value (as such par value may be
changed from time to time), of the Company. "Common Shares," when used with
reference to any Person other than the Company, shall mean the class or series
of capital stock (or equity interest) with the greatest voting power of such
other Person or if such other Person is a Subsidiary of another Person, the
Person or Persons that ultimately control such first mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Series A Junior
Preferred Stock, $1 par value (as such par value may be changed from time to
time), of the Company, having the rights and preferences set forth in the form
of Certificate of Designation, Preferences and Rights previously filed with the
Missouri Secretary of State, amended in its entirety as provided in Exhibit A
hereto.
(k) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Section 11(a)(ii) Event" shall mean an event described in
the first sentence of Section 11(a)(ii).
(l) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a).
(m) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such.
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(n) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or other equity interests entitled to vote in the election of
directors (or Persons with comparable responsibilities if the entity has no
directors) is beneficially owned, directly or indirectly, by such Person or
otherwise controlled by such Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the 15th
day after the Shares Acquisition Date or (ii) the Close of Business on the 15th
day (or such later date as may be determined by action of the Board of Directors
of the Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than the Company, any
wholly owned Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public announcement
of the intention of any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) to commence (which intention shall not have been
withdrawn within five business days (as defined in Rule 14d-1 of the General
Rules and Regulations under the Exchange Act) after such public announcement), a
tender or exchange offer the consummation of which would result in any Person
(other than the Company, any wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan)
becoming the Beneficial Owner of 15% or more of the then outstanding Common
Shares (including any such date that is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates when the
context so requires) and not by separate Right Certificates, and (y) the right
to receive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, 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, one or more Right Certificates,
in
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substantially the form of Exhibit B hereto (the "Right Certificates"),
evidencing one Right for each Common Share so held, subject to adjustment
pursuant to Section 11(i). In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(i), at the time
Right Certificates are distributed, the Company may, to the extent provided
in Section 14(a), make the necessary and appropriate rounding adjustments (as
set forth in Section 14(a)) so that Right Certificates are distributed
representing only whole numbers of Rights and pay cash in lieu of fractional
Rights pursuant to Section 14(a). As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of Rights")
by first class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date (or the earlier
Redemption Date or Final Expiration Date), the Rights will be evidenced by such
certificates registered in the names of the holders thereof and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier Redemption Date
or Final Expiration Date), the surrender for transfer of any certificate for
Common Shares (including without limitation the surrender for transfer of any
certificate for Common Shares outstanding as of the Record Date), with or
without a copy of the Summary of Rights attached thereto, shall also constitute
the transfer of the Rights associated with the Common Shares represented
thereby. Notwithstanding any legend contained on any such surrendered stock
certificate, from and after the Close of Business on the Record Date, the
surrender for transfer of any such certificate for Common Shares shall not
constitute the transfer of the rights granted pursuant to the Rights Agreement
between the Company and the Rights Agent dated August 3, 1989 (the "Expiring
Rights") which Expiring Rights expire at 5:00 P.M., Minneapolis, Minnesota time,
on August 23, 1999.
(c) Certificates for Common Shares which become outstanding
after the Record Date and (i) prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date or (ii) upon the exercise or
conversion, prior to the earlier of the Redemption Date or the Final Expiration
Date, of any option or other security exercisable for or convertible into Common
Shares, which option or other security is outstanding on the Distribution Date,
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between ▇▇▇▇▇ Company,
Inc. (the "Company") and Norwest Bank Minnesota, National Association,
dated as of July 29, 1999 (the "Rights Agreement"), the terms of which
(including restrictions on the transfer of such Rights) are hereby
incorporated herein by reference and
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a copy of which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor from such
holder. Under certain circumstances, as set forth in the Rights
Agreement, Rights that are or were beneficially owned by an Acquiring
Person or any Associate or Affiliate thereof (as such terms are
defined in the Rights Agreement) may become null and void.
With respect to such certificates containing any such legend, until the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date, the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, the registered holders of the Common
Shares shall also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be in substantially the form of Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
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 or to reflect adjustments to the Rights made pursuant to this Agreement.
Subject to the provisions of Section 11 and Section 22 hereof, the initial Right
Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of one two-hundredths of a Preferred Share as shall be set
forth therein at the price per two-hundredth of a Preferred Share set forth
therein (the price per two-hundredth of a Preferred Share being herein called
the "Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price shall be subject to adjustment
as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, Chief Executive Officer, President, or any Vice
President and by the Secretary or any Assistant Secretary or the Treasurer or
any Assistant Treasurer of the Company, either manually or by facsimile
signature. The Right Certificates shall be
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countersigned, either manually or by facsimile signature, by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed or whose facsimile signature
shall appear on any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the signing of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date
of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or the office or offices designated
as the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date and certificate number of each of
the Right Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11(a)(ii) hereof
or that have been exchanged pursuant to Section 24 hereof) 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
two-hundredths of a Preferred Share 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 Right Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or offices of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall, subject to Section 14 hereof,
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment by the registered holder 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. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have
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duly completed and executed the form of assignment on the reverse side of
such Right Certificate and shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) of such
Right Certificate or Affiliates or Associates thereof as the Company shall
reasonably request.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, 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 make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Section 11(a)(ii), the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly completed and executed,
to the Rights Agent at the office or offices of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each one
two-hundredth of a Preferred Share as to which Rights are exercised, at or
prior to the earliest of (i) the Close of Business on August 23, 2009 (the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one two-hundredth of a
Preferred Share pursuant to the exercise of a Right shall initially be $120,
shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly completed and
executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with Section 9
hereof in cash, or by certified check or bank cashiers' check or money order
payable to the order of the Company, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such
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requests, or (B) if the Company shall have elected to deposit the total
number of Preferred Shares issuable upon exercise of the Rights under this
Agreement with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one two-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional interests in shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash for fractional interests to or upon the order of
the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to such holder's duly authorized assigns, subject
to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) duly completed and executed the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) of such
Right Certificate or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right Certificates to
the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any
10
Preferred Shares held in treasury, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights.
(b) At such time, if any, as, and so long as, the Preferred
Shares issuable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company will prepare and file, as soon as practicable
following the Shares Acquisition Date, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the Rights and
the Company's securities purchasable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such registration statement
to (i) become effective as soon as practicable after such filing, and (ii)
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities or (B) the Final 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 not to exceed 90 days after the date the registration statement
is filed, the exercisability of the Rights in order to permit the registration
statement to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights until such time
as a registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained or the exercise thereof is not permitted under applicable
law.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Purchase Price and any applicable
transfer taxes), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that 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 or of any Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that 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 for the
Preferred Shares in a name other than that of,
11
the registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates or depositary receipts
for Preferred Shares upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose
name any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
as such shall not be entitled to any rights of a holder of Preferred Shares for
which the Rights shall be exercisable, including without limitation the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date pursuant to the exercise of the
Rights, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect (and any applicable transfer taxes), 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 Preferred Shares
transfer books of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; PROVIDED, HOWEVER,
12
that in no event shall the consideration to be paid upon exercise of one
Right be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event
any Person shall become an Acquiring Person (other than pursuant to any
Section 13 Event occurring on or after the Distribution Date or within 15
days prior thereto), proper provision shall be made so that each holder of a
Right, subject to Section 11(a)(iii), shall thereafter have a right to
receive, upon exercise thereof by payment of the amount equal to the product
of the number of one two-hundredths of a Preferred Share which would
otherwise be issuable upon exercise of a Right and the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of Preferred
Shares, such number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
one two-hundredths of a Preferred Share for which a Right is exercisable
immediately prior to the occurrence of the Section 11(a)(ii) Event and (y)
dividing that product by 50% of the then current per share market price of
the Company's Common Shares (determined pursuant to Section 11(d)) on the
date of such occurrence.
From and after the first occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, any Rights that are beneficially owned by any
Acquiring Person (or any Associate or Affiliate thereof) or were beneficially
owned by any Acquiring Person (or any Associate or Affiliate thereof) after
the Acquiring Person became an Acquiring Person shall become null and void
without any further action and no holder of such Rights shall thereafter have
any rights to exercise such Rights or any other rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights that would be void pursuant to the preceding sentence; no
Right Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate of such an Acquiring Person or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
or any Associate or Affiliate of such Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be canceled. The Company shall
use all reasonable efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but shall have no liability to any holder of a
Right Certificate or other Person as a result of its failure in good faith to
make any determinations with respect to an Acquiring Person or its Affiliates
or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii)
Event (the "Adjustment Date"), the Company does not have sufficient authorized,
unissued and unreserved Common Shares, or unreserved Common Shares held in
treasury,
13
available to permit the exercise in full of all Rights that are exercisable
on the Adjustment Date for the number of Common Shares per Right provided for
in Section 11(a)(ii), then the Exercise Price (as defined below) and the
number of Common Shares to be delivered by the Company upon exercise of a
Right shall be further adjusted as provided in this subparagraph (iii).
(1) Definitions:
(A) The "Aggregate Market Value" is the product of (i)
the number of Available Shares and (ii) the current per-share market
price of the Common Shares on the Adjustment Date, determined as provided
in Section 11(d).
(B) The "Available Shares" are all unreserved Common
Shares which are authorized and either unissued or held in treasury
immediately prior to the Adjustment Date.
(C) The "Exercise Price" is the amount of the payment
that must be made by the holder of a Right in connection with the
exercise of one Right immediately prior to the Adjustment Date.
(D) The "Deficiency" is the amount by which (i) two
times the Exercise Price exceeds (ii) the quotient obtained by dividing
the Aggregate Market Value by the number of Rights remaining outstanding
immediately prior to the Adjustment Date (the "Remaining Rights") (which
number shall not include the Rights that are beneficially owned by any
Acquiring Person (or any Associate or Affiliate thereof) or were
beneficially owned by any Acquiring Person (or any Associate or Affiliate
thereof) after the Acquiring Person became an Acquiring Person that shall
have become void pursuant to Section 11(a)(ii) hereof).
(2) If the Deficiency is less than or equal to the Exercise
Price, then
(A) the number of Common Shares to be delivered by the
Company upon exercise of a Right shall be adjusted to equal the number of
Available Shares divided by the number of Remaining Rights; and
(B) the amount of cash required to be delivered by the
holder of a Right upon the exercise thereof shall be adjusted (the "New
Exercise Price") to equal the Exercise Price minus the Deficiency;
PROVIDED, HOWEVER, that in no event will the New Exercise Price be less
than the aggregate par value of the Common Shares required to be
delivered upon the exercise of one Right pursuant to subparagraph (2)(A)
above.
14
(3) If the Deficiency is greater than the Exercise Price, then
(A) the number of Common Shares to be delivered by the
Company upon exercise of a Right shall be adjusted to equal the quotient
obtained by dividing the Exercise Price by the current per-share market
price of the Common Shares on the Adjustment Date;
(B) the New Exercise Price shall equal the aggregate par
value of the Common Shares required to be delivered upon the exercise of
one Right pursuant to subparagraph 3(A) above; and
(C) In lieu of issuing Common Shares (in whole or in
part upon the exercise of Rights) the Company may issue, upon the
exercise of Rights at the New Exercise Price other equity securities of
the Company (including, without limitation, shares, or units or fractions
of shares, of preferred stock, which may include Preferred Shares) which
the Board of Directors of the Company has determined to have
substantially the same value, voting rights, dividend rights and other
rights as the Common Shares (such equity securities are herein called
"common share equivalents"). To the extent that such common share
equivalents (or fractions thereof) are substituted for Common Shares upon
exercise of the Rights following the occurrence of a Section 11(a)(ii)
Event, they shall be substituted on a pro-rata basis with respect to all
Rights (other than Rights that are beneficially owned by any Acquiring
Person (or any Associate or Affiliate thereof) or were beneficially owned
by any Acquiring Person (or any Associate or Affiliate thereof) after the
Acquiring Person became an Acquiring Person that shall have become void
pursuant to Section 11(a)(ii) hereof). Such common shares equivalents
shall not be included in Available Shares, and all of the Available
Shares shall be reserved, as of the Adjustment Date, for issuance, on a
pro-rata basis, upon exercise of the Rights and may not be substituted
for with common share equivalents upon the exercise of any Right except
to the extent that the number of Common Shares required to be delivered
under subparagraph (3)(A) upon the exercise of such Right exceeds the
quotient of the number of Available Shares divided by the number of
Remaining Rights.
(4) If, at the time any adjustment is required pursuant to this
Section 11(a)(iii), the Common Shares shall have no par value, then for the
purpose of this Section 11(a)(iii), the par value of the Common Shares shall be
deemed to be $.10 per share.
(5) In the event that there shall not be sufficient authorized
but unissued and unreserved Common Shares, or unreserved Common Shares held in
treasury (or common share equivalents the issuance of which is permitted under
Section 11(a)(iii)(3)(C)), to permit the exercise in full of the Rights in
accordance with this subparagraph (iii), the Company shall use its best efforts
to cause the authorization of sufficient additional Common Shares or common
share equivalents to permit such
15
exercise and, if the Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional Common Shares or
common stock equivalents could be authorized to permit such exercise, the
Company may suspend the exercisability of the Rights for a period not to
exceed 90 days (and not beyond the Final Expiration Date) in order to seek
any authorization of additional Common Shares or common share equivalents. In
the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into 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 (as determined pursuant
to Section 11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date,
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (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 shall be the number of Preferred Shares
outstanding on such record date, plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made
16
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or cash or
non-cash assets (other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per-share market price of the
Preferred Shares (as determined pursuant to Section 11(d)) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights) of the portion of the evidences of
indebtedness or cash or non-cash assets so to be distributed on, or of such
subscription rights or warrants applicable to, one Preferred Share, and the
denominator of which shall be such current per-share market price of the
Preferred Shares; PROVIDED, HOWEVER, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase Price
that 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 any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; PROVIDED, HOWEVER, that in the event that the current
per-share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend
or distribution on such Security payable in such Security or securities
convertible into such Security (other than the Rights) or (B) any
subdivision, combination or reclassification of such Security, 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 shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The closing price for
each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is 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
Security is listed or admitted to trading or, if the Security is 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 on the Nasdaq National Market,
the Nasdaq
17
SmallCap Market or any similar system then in use, or, if on any such date
the Security is not quoted or reported 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 Security selected by the Board of Directors of
the Company. Except as provided in Section 11(d)(ii) with respect to
Preferred Shares, if on any such day no market maker is making a market in
the Security, the fair value of such Security on such day as determined in
good faith by the Board of Directors of the Company (whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights) shall be used in
lieu of the closing price for such day. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business or,
if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) If the Preferred Shares are not publicly held or listed or
traded in a manner described in Section 11(d)(i), then, notwithstanding anything
to the contrary provided in Section 11(d)(i), the "current per-share market
price" of the Preferred Shares shall be conclusively deemed to be the current
per-share market price of the Common Shares as determined pursuant to Section
11(d)(i) multiplied by two hundred (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof).
If neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, the "current per-share market price" of the Preferred Shares
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights.
(e) Anything herein to the contrary notwithstanding, except as
provided in the third sentence of this Section 11(e), no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one two-millionth of a Preferred Share or one
ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11, but for the first sentence of this Section 11(e),
shall be made no later than the earlier of (i) three years from the date of the
transaction that requires such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly
18
equivalent as practicable to the provisions with respect to the shares
contained in Section 11(a) through (c) inclusive and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply
on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one two-hundredths of a
Preferred Share (or other securities) purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
two-hundredths of a Preferred Share (calculated to the nearest one two-millionth
of a Preferred Share) obtained by (i) multiplying (x) the number of one
two-hundredths of a share covered by a Right immediately prior to such
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one two-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one two-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 shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued on or after the Distribution Date, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued on or after the Distribution Date, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender
19
thereof, if required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein, may bear, at the option of
the Company, the adjusted Purchase Price, and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one two-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one two-hundredth of a Preferred
Share and the number of one two-hundredths of a Preferred Share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one two-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of Directors of the Company in
its sole discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any of the Preferred Shares at less than the current per-share market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
dividends on Preferred Shares payable in Preferred Shares or (v) issuance of
rights, options or warrants referred to in paragraph (b) of this Section 11,
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such shareholders.
20
(n) Anything in this Agreement or the Rights to the contrary
notwithstanding, in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares or (ii)
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common
Shares, then in any such case (x) the number of one two-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one two-hundredths of
a Preferred Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the number of
Common Shares outstanding immediately after such event and (y) each Common
Share outstanding immediately after such event shall have issued with respect
to it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is
effected. If an event occurs which would require an adjustment under Section
11(a)(ii) and this Section 11(n), the adjustments provided for in this
Section 11(n) shall be in addition and prior to any adjustment required
pursuant to Section 11(a)(ii).
(o) If any adjustment in the Purchase Price pursuant to
paragraph (b) or (c) of this Section 11 would not be permitted by law, under the
Company's Articles of Incorporation or under the Certificate of Designation,
Preferences and Rights establishing the Preferred Shares, as amended, no such
issuance of securities or distribution of evidences of indebtedness or other
assets or subscription rights or warrants, as the case may be, that would
require such an adjustment but for the limitations established by law, the
Company's Articles of Incorporation or such Certificate of Designation,
Preferences and Rights, as amended, shall be made by the Company.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares or the Preferred Shares a copy of such certificate and (c) if such
adjustment is made after the Distribution Date, mail a brief summary thereof to
each holder of record of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on such certificate
and on any adjustment therein contained.
21
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event, on or after the Distribution Date or within
15 days prior thereto, directly or indirectly,
(x) the Company shall consolidate with, or merge
with and into, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation or merger,
(y) any Person shall consolidate with the
Company, or merge with and into the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the
outstanding Common Shares of the Company shall be changed into or
exchanged for stock or other securities of any other Person (or the
Company) or money or any other property (except as a result of the
exercise of statutory dissenters' rights), or
(z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in
one or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company or one or more of its wholly owned Subsidiaries),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof by payment of the amount equal
to the product of the number of one two-hundredths of a Preferred Share which
would otherwise be issuable upon exercise of a Right and the then current
Purchase Price in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or adverse claims, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one two-hundredths
of a Preferred Share for which a Right is, immediately prior to the occurrence
of the Section 13 Event, exercisable and (y) dividing that product by 50% of the
then current per-share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d)) on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such merger, consolidation, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party; and (iv)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares to permit the exercise
of all outstanding Rights) in connection with the consummation of any such
22
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses
(x) or (y) of the first sentence of Section 13(a), the Person (including,
without limitation, the Company as successor thereto or as the surviving
corporation) that is the issuer of any securities into which Common
Shares of the Company are converted in such merger or consolidation, or
if no securities are so issued, the Person that is the other party to
such merger or consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person, the Common Shares of which
are and have been so registered, "Principal Party" shall refer to such other
Person, and (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized,
unreserved Common Shares which have not been issued or are held in treasury to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any Section 13 Event,
the Principal Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights, on an appropriate form, and use its best efforts
to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of
(1) the date as of which the Rights are no longer exercisable for such
securities or (2) the Final Expiration Date;
23
(ii) 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; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
(d) The Company shall not enter into any transaction of the
kind referred to in this Section 13 if at the time of such transaction there are
any rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish or eliminate the benefits intended to be
afforded by the Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there may be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the 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 on the Nasdaq National Market or
the Nasdaq SmallCap Market or any similar system then in use or, if on any
such date the Rights are not so quoted or reported, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used in lieu of the closing
price for such day.
24
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
two-hundredth of a Preferred Share, or, if a Right shall then be exercisable
for a fraction other than one two-hundredth of a Preferred Share, integral
multiples of that fraction) upon exercise of the Rights or to issue
certificates which evidence fractions of Preferred Shares (other than
fractions that are integral multiples of one two-hundredth of a Preferred
Share, or if a Right shall be then exercisable for a fraction other than one
two-hundredth of a Preferred Share, integral multiples of that fraction).
Fractions of Preferred Shares in integral multiples of one two-hundredth of a
Preferred Share or, if a Right shall then be exercisable for a fraction other
than one two-hundredth of a Preferred Share, integral multiples of that
fraction may, at the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one
two-hundredth of a Preferred Share, or, if a Right shall then be exercisable
for a fraction other than one two-hundredth of a Preferred Share, integral
multiples of that fraction, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
one Preferred Share. For purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share
(as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise or if the
closing price is not determinable pursuant to the second sentence of Section
11(d)(i) hereof, the current market value of a Preferred Share shall be
determined pursuant to Section 11(d)(ii).
(c) The holder of a Right by the acceptance of the Rights
expressly waives such holder's right to receive any fractional Rights or any
fractional shares (except as provided above) upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, such holder's right to exercise
the Rights evidenced by such Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) in the manner provided in
such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is
25
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
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 office or offices of the Rights Agent designated for such purposes, 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 Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) the Company may issue Rights after the Effective Date but
prior to the Distribution Date, and in certain instances after the Distribution
Date, as provided in this Agreement; and
(e) notwithstanding anything in this Agreement or the Rights to
the contrary, the Company, the Rights Agent and the Board of Directors shall not
have any liability to any holder of a Right or other Person as a result of the
inability of the Company or the Rights Agent 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.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or
26
upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense (including the costs and expenses of defending
against any claim of liability), incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; PROVIDED, HOWEVER, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the
27
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, the Common Shares
certificates), by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of the "current per-share market price") be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman, the Chief Executive Officer,
the President or any Vice President of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
28
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman, the Chief Executive Officer, the President or any Vice
President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company or its Subsidiaries may be interested, or contract with or
lend money to the Company or its Subsidiaries or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or its Subsidiaries or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss
29
to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights or powers if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the form of assignment or form of
election to purchase, as the case may be, has either not been duly completed and
executed or indicates an affirmative response to enumerated clause 1 and/or 2 on
the reverse side of the applicable Right Certificate, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and, if such notice is mailed after the Distribution Date, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and, if such notice is mailed after the
Distribution Date, to the holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit such
holder's Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the State
of Minnesota or 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 Minnesota or New York), in good standing, having an office in the State
of Minnesota or New York that 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 that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested
30
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares and Preferred Shares, and, if such notice is filed
after the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (x) such time as a Person becomes an
Acquiring Person or (y) the Close of Business on the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.001 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date of this Agreement
(such redemption price being hereinafter referred to as the "Redemption Price").
The Redemption Price shall be payable in cash by the Company. The redemption of
the Rights by the Board of Directors of the Company may be made effective at
such time, on such basis and with such conditions as the Board of Directors of
the Company in its sole discretion may establish. Except for the obligation of
the Company to pay the Redemption Price, the Board of Directors and the Company
shall not have any liability to any Person as a result of the redemption of
Rights pursuant to the terms of this Section 23.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as
31
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares; PROVIDED, HOWEVER, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Any notice
which is mailed in the manner herein provided shall be deemed given whether
or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner except as
specifically set forth in this Section 23 or in Section 24 or other than in
connection with the purchase of Common Shares prior to the Distribution Date.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option,
at any time after any person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that shall have become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares with each Right to be exchanged for such number of
Common Shares as shall equal the result obtained by dividing (x) the Exercise
Price (as defined in Section 11(a)(iii)) by (y) the current per-share market
price of the Common Shares (determined pursuant to Section 11(d)) on the date
the Rights first become exercisable for Common Shares pursuant to Section
11(a)(ii) (such number of shares being hereinafter referred to as the "Exchange
Ratio"). The Exchange Ratio shall be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction affecting the Common Shares that
occurs after the date the Rights first become exercisable for Common Shares
pursuant to Section 11(a)(ii). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate, and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the
32
exchange of Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which shall have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares authorized, unreserved and either unissued or held in treasury to permit
an exchange of Rights as contemplated in accordance with this Section 24, the
Company, at its option, may substitute Preferred Shares (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof, or common share
equivalents, as such term is defined in Section 11(a)(iii)(3)(C) hereof), for
Common Shares exchangeable for Rights, at the initial rate of one two-hundredth
of a Preferred Share (or equivalent preferred share) or one common share
equivalent for each Common Share, as appropriately adjusted to reflect stock
splits, stock dividends or similar transactions affecting the Common Shares that
occur after the date of this Agreement.
(d) In the event that there shall not be sufficient Common
Shares, Preferred Shares, equivalent preferred shares, as such term is defined
in Section 11(b), or common share equivalents, as such term is defined in
Section 11(a)(iii)(3)(C), authorized, unreserved and either unissued or held in
treasury to permit the exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorized additional Common Shares or Preferred Shares, equivalent preferred
shares or common share equivalents for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company may pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24. The Board of
Directors and the Company shall not have any liability to any Person as a result
of the exchange of Rights pursuant to the terms of this Section.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), or (ii)
to offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional
33
Preferred Shares or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), or (iv) to effect any consolidation or merger
into or with any other Person, 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 a series of related transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons (other than the Company and/or any of its wholly
owned Subsidiaries), or (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise), then,
in each such case, the Company shall give to each holder of a Right
Certificate, to the extent feasible and in accordance with Section 26 hereof,
a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage-prepaid, or delivered by hand or express courier
service or faxed, addressed (until another address is filed in writing with the
Rights Agent) as follows:
▇▇▇▇▇ Company, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right
34
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage-prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Norwest Bank Minnesota, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager--Shareowner Services
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may and the
Rights Agent shall, if so directed by the Company, from time to time supplement
or amend this Agreement without the approval of any holders of Common Shares or
Right Certificates in order (i) to extend the Final Expiration Date, (ii) to
cure any ambiguity, or to correct or supplement any provision contained in this
Agreement which may be defective or inconsistent with any other provisions in
this Agreement, (iii) prior to the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner which the Company may
deem necessary or desirable or (iv) following the Distribution Date, to
otherwise change or supplement any provision in this Agreement in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than Right
Certificates evidencing Rights that shall have become null and void pursuant to
Section 11(a)(ii)). Without limiting the foregoing, the Company may at any time
prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) hereto
from 15% to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than (1) the Company, (2) any
wholly-owned Subsidiary of the Company, (3) any employee benefit plan of the
Company or any Subsidiary of the Company, or (4) any entity holding Common
Shares for or pursuant to the terms of any plan described in clause (3) of this
sentence) or (ii) 10%.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT.
(a) Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this
35
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the registered holders of Common Shares).
(b) The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors or the Company
or necessary or advisable in the administration of this Agreement, including
without limitation the right and power to interpret this Agreement and to make
all determinations deemed necessary or advisable for the administration of this
Agreement. All such acts, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors in good faith shall
(x) be final, conclusive and binding on the Company, the Rights Agent and the
holders of the Rights and all other parties and (y) not subject the Board of
Directors to any liability to the holders of the Rights or any other party.
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Missouri and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
▇▇▇▇▇ COMPANY, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇
------------------------------------
Its CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its VICE PRESIDENT
37
EXHIBIT A
FORM OF
ARTICLES OF AMENDMENT OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PREFERRED STOCK
OF
▇▇▇▇▇ COMPANY, INC.
We, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, respectively the
President and Secretary of ▇▇▇▇▇ Company, Inc., a corporation organized and
existing under The General and Business Corporation Law of the State of Missouri
(the "Company"), in accordance with the provisions of Section 351.180.7 thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Articles of Incorporation of the Company, and Section
351.180.7 of the General and Business Corporation Law of the State of Missouri,
the Board of Directors on July 29, 1999, amended in its entirety, effective at
5:00 p.m., St. Louis, Missouri time, on August 23, 1999, the Certificate of
Designation, Preferences and Rights of the Company creating a series of 600,000
shares of Series Preferred Stock ($1 par value) designated as Series A Junior
Preferred Stock to read in its entirety as follows:
1. DESIGNATION, AMOUNT AND STATED CAPITAL. The shares of such
series shall be designated as "Series A Junior Preferred Stock," $1 par value
(the "Series A Preferred Stock"), and the number of shares constituting such
series shall be 600,000. Such number of shares may, unless prohibited by the
Articles of Incorporation, be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares issuable upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series A Preferred Stock. The stated
capital for each share of Series A Preferred Stock that is issued by the Company
shall be $24,000 per share, subject to adjustment by the Board of Directors to
reflect any stock split, stock dividend, reclassification or similar transaction
(the "Per-Share Stated Capital").
2. DIVIDENDS AND DISTRIBUTIONS.
(i) Subject to the rights of the holders of any
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of shares of
Common Stock and of any other junior
A-1
stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a)
$2.00 or (b) subject to the provision for adjustment hereinafter set
forth, 200 times the aggregate per share amount of all cash dividends,
and 200 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock, and no more. In the event the Company shall
at any time after August 23, 1999 declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event. The annual dividends which the
holders of Series A Preferred Stock shall be entitled to receive in
any year, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, shall be the sum of the
quarterly dividends which they shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally
available for the purpose, on the Quarterly Dividend Payment Dates
occurring during such year, and no more.
(ii) The Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in subparagraph (i) of this
paragraph 2 simultaneously with its declaration of a dividend or
distribution on the Common Stock (other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $2.00 per share on the Series A
Preferred Stock shall nevertheless be payable, out of funds legally
available for such purpose, on such subsequent Quarterly Dividend Payment
Date.
A-2
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of
Series A Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 50 days prior to the
date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 200 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at
any time after August 23, 1999 declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(ii) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of Preferred Stock or any
similar stock, the Articles of Incorporation or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Company having the right to vote
generally on matters submitted to stockholders, shall vote together as
one class on all matters submitted to a vote of the stockholders of the
Company.
A-3
(iii) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock and any
other capital stock of the Company having general voting rights as set
forth herein) for taking any corporate action.
4. CERTAIN RESTRICTIONS.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
paragraph 2 hereof are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(a) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(b) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(c) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Company
ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; or
(d) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A Preferred
Stock, except in accordance with a purchase offer made in writing
or, unless prohibited by the Articles of Incorporation, by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
A-4
(ii) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under subparagraph (i) of
this paragraph 4, purchase or otherwise acquire such shares at such time
and in such manner.
5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after acquisition thereof. The Company shall
cause all such shares upon their cancellation to be authorized but unissued
shares of Preferred Stock which may be reissued as part of a new series of
Preferred Stock, subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the lesser of (i) the Per-Share Stated
Capital with respect to each share of Series A Preferred Stock plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment and (ii) the greater of (A) $200
per share plus all accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or (B) an aggregate
amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 200 times the aggregate amount to be distributed per share to
holders of Common Stock, or (b) to the holders of shares of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event the Company shall
at any time after August 23, 1999 declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then the aggregate amount determined pursuant to clause
(a)(ii)(B) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
7. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock
A-5
shall at the same time be similarly exchanged or changed into an amount per
share (subject to the provision for adjustment hereinafter set forth) equal
to 200 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Company shall
at any time after August 23, 1999 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
8. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.
9. RANK. The Series A Preferred Stock shall rank junior with
respect to payment of dividends and distribution of assets upon liquidation,
dissolution or winding up to all other series of the Company's Preferred Stock
hereafter issued that expressly provide that they shall rank senior to the
Series A Preferred Stock.
10. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
These Articles of Amendment to the Certificate of Designation,
Preferences and Rights of Series A Junior Preferred Stock shall be effective at
5:00 p.m., St. Louis, Missouri time, on August 23, 1999.
IN WITNESS WHEREOF, these Articles of Amendment of the Certificate
of Designation, Preferences and Rights of Series A Junior Preferred Stock is
executed on behalf of the Company by its President and countersigned by its
Secretary this __ day of _______________, 1999.
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Countersigned:
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
A-6
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
On this __ day of _______________, 1999, before me, ___________
______________, a Notary Public in and for the State of Minnesota, personally
appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the President of ▇▇▇▇▇ Company, Inc. and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the Secretary of ▇▇▇▇▇ Company, Inc., known to me to be the persons
who executed the foregoing Articles of Amendment to the Certificate of
Designation, Preferences and Rights and acknowledged to me that they executed
the same pursuant to authority given by the Board of Directors of such
corporation as their free and voluntary act, and as the free and voluntary
act and deed of such corporation, for the uses and purposes therein set forth.
----------------------------------------
Notary Public
My commission expires:
A-7
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-__ _____ Rights
NOT EXERCISABLE AFTER AUGUST 23, 2009 OR SUCH EARLIER DATE AS THE
BOARD OF DIRECTORS ORDERS REDEMPTION OR EXCHANGE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS THAT
ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
▇▇▇▇▇ COMPANY, 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 29, 1999 (the "Rights
Agreement") between ▇▇▇▇▇ Company, Inc., a Missouri corporation (the "Company"),
and Norwest Bank Minnesota, National Association, a national banking association
(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. (Minneapolis, Minnesota time) on August 23, 2009 at the office or
offices of the Rights Agent designated for such purpose, or of its successor as
Rights Agent, one two-hundredth of a fully paid, nonassessable share of Series A
Junior Preferred Stock, $1 par value (the "Preferred Shares"), of the Company,
at a purchase price of $120 per one two-hundredth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly completed and executed. The number of
Rights evidenced by this Right Certificate (and the number of one two-hundredths
of a Preferred Share which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are, except for adjustments
required pursuant to the Rights Agreement, the number and Purchase Price as of
August 23, 1999, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of one two-hundredths of a Preferred Share which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
B-1
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and which
Rights Agreement contains a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates (which limitations of rights
include the voiding of the Rights under certain circumstances specified in the
Rights Agreement). Copies of the Rights Agreement are on file with the Secretary
at the principal executive office of the Company and will be mailed without
charge by the Company to the holder of this certificate promptly following
receipt by the Company of a written request therefor.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), any Rights evidenced by this Right Certificate
that are beneficially owned by an Acquiring Person or an Associate or Affiliate
of such Acquiring Person (as such terms are defined in the Rights Agreement) or
were beneficially owned by any Acquiring Person or an Associate or Affiliate of
such Acquiring Person after the Acquiring Person becomes an Acquiring Person,
shall be null and void from and after the occurrence of such Section 11(a)(ii)
Event.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one two-hundredths of a Preferred Share as the Rights
evidenced by the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may, but are not required to, be redeemed by
the Company at a redemption price of $.001 per Right, subject to adjustment as
provided in the Rights Agreement, payable in cash, and (ii) may, but are not
required to, be exchanged by the Company in whole or in part for Common Shares
(as such term is defined in the Rights Agreement) or other shares of capital
stock of the Company. The Board of Directors of the Company and the Company
shall not have any liability to any person as a result of the redemption or
exchange of the Rights pursuant to the provisions of the Rights Agreement.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractional shares which are
integral multiples of one two-hundredth of a Preferred Share, or, if a Right
shall then be exercisable for a fraction other than one two-hundredth of a
Preferred Share, integral multiples of that fraction, which may, at the election
of the Company, be evidenced by
B-2
depositary receipts), if in lieu thereof a cash payment is made, as provided
in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned, manually or by facsimile
signature, by the Rights Agent.
WITNESS the manual or facsimile signatures of the proper officers
of the Company.
Dated as of _________________, ____.
▇▇▇▇▇ COMPANY, INC.
By:
------------------------------------
Title:
---------------------------------
And:
-----------------------------------
Title:
---------------------------------
Countersigned:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
------------------------------------
Title:
---------------------------------
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns
and transfers unto __________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution. Dated: ___________________, ____
------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States or by an eligible guarantor institution (bank, stockbroker,
savings and loan association or credit union with membership in an approved
signature guaranty medallion program), pursuant to Rule 17Ad-15 promulgated
under the Securities Exchange Act of 1934, as amended.
B-4
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(1) The rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
---------------------------------------
Signature
NOTICE
The signature of the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-5
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise Rights represented by the
Right Certificate.)
To ▇▇▇▇▇ COMPANY, INC:
The undersigned hereby irrevocably elects to exercise ___ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights (or such other securities of the Company or of
any other person which may be issuable upon exercise of the Rights) and requests
that certificates for such shares (or other securities, if any) be issued in the
name of:
Please insert social security
or other identifying number
-----------------------------------------
-----------------------------------------
-----------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-----------------------------------------
-----------------------------------------
-----------------------------------------
(Please print name and address)
Dated: ______________, 20__
------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States or by an eligible guarantor institution bank
(bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934, as amended.
B-6
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
being exercised by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
----------------------------------------
Signature
NOTICE
The signature of the foregoing Election to Exercise and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
B-7
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
OF
▇▇▇▇▇ COMPANY, INC.
On July 29, 1999, the Board of Directors of ▇▇▇▇▇ Company, Inc.
(the "Company"), declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, $.10 par value (the "Common
Shares"), of the Company. The dividend is payable on August 23, 1999 (the
"Record Date") to shareholders of record at the close of business on that date.
Each Right entitles the registered holder to purchase from the
Company one two-hundredth of a share of Series A Junior Preferred Stock, $1 par
value (the "Preferred Shares"), of the Company at a price of $120 per one
two-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of July 29, 1999, between the
Company and Norwest Bank Minnesota, National Association, as Rights Agent (the
"Rights Agent").
Initially, the Rights will attach to all certificates representing
Common Shares then outstanding and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares and a Distribution
Date for the Rights will occur upon the earlier of:
(i) the close of business on the fifteenth day following a
public announcement that a person or group of affiliated or associated
persons has become an "Acquiring Person" (i.e., has, subject to certain
exceptions, become the beneficial owner of 15% or more of the outstanding
Common Shares), or
(ii) the close of business on the fifteenth day following the
commencement or public announcement of a tender offer or exchange offer
the consummation of which would result in a person or group of affiliated
or associated persons becoming the beneficial owner of 15% or more of the
outstanding Common Shares (or such later date as may be determined by the
Board of Directors of the Company prior to a person or group of
affiliated or associated persons becoming an Acquiring Person).
Until the Distribution Date,
(i) the Rights will be evidenced by the Common Share
certificates and will be transferred with and only with the Common
Shares,
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(ii) new Common Share certificates issued after the Record Date
upon transfer or new issuance of the Common Shares will contain a
notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any Common Share certificate,
even without such notation or a copy of this Summary of Rights attached
to it, will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate.
As promptly as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on August 23, 2009, unless extended
or earlier redeemed or exchanged by the Company as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution:
(i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares,
(ii) upon the grant to holders of the Preferred Shares of
certain rights, options or warrants to subscribe for or purchase
Preferred Shares or convertible securities at less than the then current
market price of the Preferred Shares, or
(iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those described in clause (ii) above).
The number of Preferred Shares issuable upon the exercise of a
Right is also subject to adjustment in the event of a dividend on Common Shares
payable in Common Shares, or a subdivision, combination or consolidation of the
Common Shares.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional Preferred Shares will be issued (other than
fractional shares which are integral multiples of one two-hundredth (subject to
adjustment) of a Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts) if in lieu of such issuance, a payment in cash
is made based on the
C-2
closing price (pro-rated for the fraction) of the Preferred Shares on the
last trading date prior to the date of exercise.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights that are or were beneficially owned by the
Acquiring Person (which will thereafter be void), will have the right to receive
upon exercise of the Right at the then current exercise price of the Right that
number of Common Shares having a market value of two times the exercise price of
the Right, subject to certain possible adjustments.
In the event that, on or after the Distribution Date or within 15
days prior thereto, the Company is acquired in certain mergers or other business
combination transactions or 50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold on or after the
Distribution Date or within 15 days prior to the Distribution Date in one or a
series of related transactions, each holder of a Right (other than Rights which
have become void under the terms of the Rights Agreement) will have the right to
receive, upon exercise of the Right at the then current exercise price of the
Right, that number of Common Shares of the acquiring company (or, in certain
cases, one of its affiliates) having a market value of two times the exercise
price of the Right.
In certain events specified in the Rights Agreement, the Company
is permitted temporarily to suspend the exercisability of the Rights.
At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by a person or
group of affiliated or associated persons of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights which have become void under the terms of the Rights
Agreement), in whole or in part, for Common Shares or equivalent securities at
an exchange ratio per Right equal to the result obtained by dividing the
exercise price of a Right by the current per share market price of the Common
Shares, subject to adjustment.
At any time prior to the time that a person or group of affiliated
or associated persons has become an Acquiring Person, the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of $.001
per Right, subject to adjustment (the "Redemption Price"), payable in cash. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. The Board of Directors and the Company shall not have any liability
to any person as a result of the redemption or exchange of the Rights pursuant
to the provisions of the Rights Agreement.
The terms of the Rights may be amended by the Board of Directors
of the Company, subject to certain limitations after the Distribution Date,
without the consent of the holders of the Rights, including an amendment prior
to the date a person or
C-3
group of affiliated or associated persons becomes an Acquiring Person to
lower the threshold for exercisability of the Rights from 15% to not less
than the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be beneficially owned
by any person or group of affiliated or associated persons, or (ii) 10%
(subject to certain exceptions).
Until a Right is exercised, the holder of the Right, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated _______________, 1999. A copy of the Rights Agreement is available free of
charge from the Company by contacting the Secretary at ▇▇▇▇▇ Company, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is hereby incorporated herein by
reference.
C-4