EXHIBIT 4
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RIGHTS AGREEMENT
DATED AS OF AUGUST 16, 2000
BETWEEN
FLEETBOSTON FINANCIAL CORPORATION
AND
EQUISERVE, LP
AS RIGHTS AGENT
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions..............................................................1
Section 2. Appointment of Rights Agent......................................................6
Section 3. Issue of Right Certificates......................................................6
Section 4. Form of Right Certificates.......................................................8
Section 5. Countersignature and Registration................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates:
Mutilated, Destroyed, Lost or Stolen 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 Capital Stock...................................11
Section 10. Preferred Share Record Date.....................................................12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights..............12
Section 12. Certification of Adjusted Purchase Price or Number of Shares....................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............20
Section 14. Fractional Rights and Fractional Shares.........................................23
Section 15. Rights of Action................................................................24
Section 16. Agreement of Right Holders......................................................25
Section 17. Right Certificate Holder Not Deemed a Stockholder...............................25
Section 18. Concerning the Rights Agent.....................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......................26
Section 20. Duties of Rights Agent..........................................................27
Section 21. Change of Rights Agent..........................................................29
Section 22. Issuance of New Right Certificate...............................................29
Section 23. Redemption......................................................................30
Section 24. Exchange........................................................................31
Section 25. Notice of Certain Events........................................................32
Section 26. Notices.........................................................................32
Section 27. Supplements and Amendments......................................................33
Section 28. Successors......................................................................33
Section 29. Benefits of this Agreement......................................................34
Section 30. Severability....................................................................34
Section 31. Determination and Actions by the Board of Directors, etc........................34
Section 32. Governing Law...................................................................35
Section 33. Counterparts....................................................................35
Section 34. Descriptive Headings............................................................35
Exhibit A Form of Statement of Resolution Establishing Series of Shares
Exhibit B Form of Right Certificate
ii
RIGHTS AGREEMENT
This Agreement, dated as of August 16, 2000, between FleetBoston
Financial Corporation, a Rhode Island corporation (the "Company"), and
EquiServe, LP (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on August 16, 2000 (the "Declaration Date"), the Board of
Directors of the Company authorized and declared a dividend of one right (a
"Right") for each outstanding share of Common Stock (as hereinafter defined),
outstanding at the close of business on November 21, 2000 (the "Record Date"),
and has authorized the issuance of one Right with respect to each share of
Common Stock that shall become outstanding between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined), each Right representing the right to purchase one ten
thousandth of a Preferred Share (as hereinafter defined) upon the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person, other than a
Qualifying Investor, who or which, together with all Affiliates and Associates
of such Person, shall, subsequent to the Declaration Date, become the Beneficial
Owner of 10% or more of the shares of Common Stock then outstanding (other than
as a result of an Approved Offer), or (ii) any Person (other than a Qualifying
Investor) who or which, together with all Affiliates and Associates of such
Person, is on the Declaration Date the Beneficial Owner of 10% or more of the
shares of Common Stock then outstanding, if, subsequent to the Declaration Date,
such Person (other than a Qualifying Investor), together with all Affiliates and
Associates of such Person, shall increase its Beneficial Ownership of shares of
Common Stock by an additional 1% or more of the shares of Common Stock then
outstanding or (iii) any Person who or which is a Qualifying Investor, if
subsequent to the Declaration Date, such Person shall cease to be a Qualifying
Investor and shall, at that time, together with all Affiliates and Associates of
such Person, be the Beneficial Owner of 10% or more of the shares of Common
Stock then outstanding; PROVIDED, HOWEVER, that (x) a Person shall not become an
Acquiring Person if such Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 10% or more (in the case of clause (i)
above) or an additional 1% or more (in the case of clause (ii) above) of the
shares of Common Stock then outstanding solely as a result of a reduction in the
number of shares of Common Stock outstanding due to the repurchase of shares of
Common Stock by the Company, unless and until such time as such Person shall
purchase or otherwise become (as a result of actions taken by such Person or its
Affiliates or Associates) the Beneficial Owner of additional shares of Common
Stock constituting 1% or more of the then outstanding shares of Common Stock;
(y) "Acquiring Person" shall not include any Company Entity; and (z) "Acquiring
Person" shall not include any Person who becomes the Beneficial Owner of 10% or
more (or an additional 1% or more) of the outstanding shares of Common Stock but
who
acquired beneficial ownership of shares of Common Stock inadvertently
(including, without limitation, because (i) such Person was unaware that it
Beneficially Owned 10% or more of the Common Stock or (ii) such Person was aware
of the extent of such beneficial ownership but such Person acquired beneficial
ownership of such shares of Common Stock without any plan or intention to change
or influence the control of the Company), and such Person promptly (and in any
event within ten Business Days after being so requested by the Company) enters
into an irrevocable commitment satisfactory to the Company's Board of Directors
promptly (and in any event within twenty Business Days or such shorter period as
shall be determined by the Company's Board of Directors) to divest, and
thereafter promptly divests as required by such commitment, sufficient shares of
Common Stock so that such Person (together with all of its Affiliates and
Associates) ceases to be a Beneficial Owner of 10% or more of shares of Common
Stock, any wholly owned Subsidiary of the Company, any employee benefit plan of
the Company or of any of its wholly owned Subsidiaries, or any entity holding
Common Stock which was organized, appointed or established by the Company or any
of its wholly owned Subsidiaries for or pursuant to the terms of any such plan.
(b) "Affiliate" shall have the meaning ascribed to such term 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 hereof.
(c) "Approved Offer" shall mean a tender or exchange offer for all
outstanding shares of Common Stock that is at a price and on terms approved,
prior to the acceptance for payment of shares under such tender or exchange
offer, by the Board of Directors of the Company.
(d) "Associate" shall include (x) any Person included in the definition
of "Associate" in Rule 12b-2 under the Exchange Act, as in effect on the date of
this Amended and Restated Rights Agreement, and (y) any Affiliate of any such
Person.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly (as determined pursuant to Rule
13d-3 or Rule 13d-5 under the Exchange Act as in effect on the date of this
Agreement);
(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 or the
satisfaction of one or more conditions or both) pursuant to any agreement
(other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities),
arrangement or understanding (whether in writing or not), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights described herein), warrants or options, or otherwise (PROVIDED,
HOWEVER, that a Person shall not be deemed to be the Beneficial Owner of,
or to beneficially own, any security solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such tendered security is
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accepted for payment or exchange); or (B) the right to vote or dispose of,
or to direct the vote or disposition of, alone or in concert with others,
pursuant to any agreement, arrangement or understanding (whether in writing
or not); PROVIDED, HOWEVER, that a Person shall not be deemed pursuant to
this clause (ii)(B) to be the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or understanding to vote, or
direct the vote of, such security (1) arises solely from a revocable proxy
or revocable 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
on Schedule 13D under the Exchange Act; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or revocable consent as described in clause
(ii)(B) of this paragraph (e)) or disposing of any securities of the
Company.
If a Person shall be deemed to be the Beneficial Owner of any securities which
are not outstanding, such securities shall be deemed to be outstanding for
purposes of determining the percentage of Common Stock beneficially owned by
such Person but all other securities (including securities of the same class)
not actually outstanding shall not be deemed outstanding for such purposes.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(g) "Close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(h) "Common Stock" shall mean the common stock, $.01 par value per
share, of the Company (as it may be constituted from time to time during the
term of this Agreement), except that "Common Stock" when used with reference to
any Person other than the Company (or, in the case of a transaction referred to
in Section 13 hereof, if the Company is the successor to the other Person
referred to in clause (a), (b) or (c) of Section 13, or is the surviving
corporation, when thereafter used with reference to the Company) shall mean the
capital stock (or, in the case of a partnership or other unincorporated entity,
the equivalent equity interest) with the greatest voting power of such Person,
together with all rights and benefits (however denominated or constituted)
relating to such capital stock (including, without limitation, any rights or
warrants to acquire additional shares of such capital stock or other securities
or assets, or to participate in any trust for the benefit of holders of such
shares, or to share in the benefits of any agreements or other arrangements for
the benefit of such holders), whether or not such rights are yet exercisable,
and together with any other securities which are represented by the certificates
for such shares or are transferred in connection with transfers of such shares.
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(i) "Company Entity" shall mean the Company, any wholly owned
Subsidiary (as hereinafter defined) of the Company, any employee benefit plan or
employee stock plan of the Company or of any of its wholly owned Subsidiaries,
or any Person holding Common Stock which was organized, appointed or established
by the Company or any of its wholly owned Subsidiaries for or pursuant to the
terms of any such plan.
(j) "Person" shall mean any individual, firm, corporation, partnership
or other entity.
(k) "Preferred Shares" shall mean shares of Cumulative Participating
Junior Preferred Stock (Series 2000), par value $1.00 per share, of the Company
having the rights and preferences set forth in the form of Statement of
Resolution Establishing Series of Shares attached to this Agreement as Exhibit
A.
(l) "Qualifying Investor" shall mean any Person (a) who or which,
together with all its Affiliates and Associates, either (x) is the Beneficial
Owner of less than 15% of the shares of Common Stock then outstanding, or (y)
was the Beneficial Owner on the Declaration Date of 15% or more of the shares of
Common Stock then outstanding, provided that such Person referred to in this
clause (y), together with its Affiliates and Associates, does not, subsequent to
the Declaration Date, purchase or otherwise become (as a result of actions taken
by such Person or its Affiliates or Associates) the Beneficial Owner of
additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock, (b) who or which has acquired such shares in
the ordinary course of its business and not with the purpose of changing or
influencing the control of the Company, nor as a participant (other than on the
same basis as other shareholders) in any transaction having such purpose, and
(c) who or which is a Person described in clause (ii) of Rule 13d-l(b)(1) under
the Exchange Act, as in effect on the date hereof; PROVIDED, HOWEVER, that a
Person who or which is or was a Qualifying Investor (including a Person who or
which was deemed to be a Qualifying Investor by reason of the next sentence)
shall not cease to be a Qualifying Investor if such Person no longer meets the
requirements of clause (a) solely as a result of the reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of Common
Stock by the Company, and/or no longer meets the requirements of clause (b) (or
is no longer deemed to meet such requirements pursuant to the next sentence)
and/or clause (c) above, unless and until (in any such case) such Person shall
thereafter purchase or otherwise become (as a result of actions taken by such
Person or its Affiliates or Associates) the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding shares of
Common Stock; and PROVIDED FURTHER, that a Person who or which is or was a
Qualifying Investor (including a Person who or which was deemed to be a
Qualifying Investor by reason of the next sentence) shall not cease to be a
Qualifying Investor if such Person no longer meets the requirements of clause
(a) solely because such Person becomes the Beneficial Owner of an additional 1%
or more of the outstanding shares of Common Stock inadvertently (including,
without limitation, because (i) such Person was unaware that it Beneficially
Owned 15% or more of the Common Stock or (ii) such Person was aware of the
extent of such beneficial ownership but such Person acquired beneficial
ownership of such shares of Common Stock without any plan or intention to change
or influence the control of the Company), and such Person promptly (and in any
event within ten Business Days after being so requested by the Company) enters
into an irrevocable commitment satisfactory to the Company's Board of Directors
promptly (and in any event within twenty
4
Business Days or such shorter period as shall be determined by the Company's
Board of Directors) to divest, and thereafter promptly divests as required by
such commitment, sufficient shares of Common Stock so that such Person (together
with all of its Affiliates and Associates) ceases to be a Beneficial Owner of
15% or more of the shares of Common Stock. For purposes of the foregoing
definition (including the provisos thereto), a Person meeting the requirements
of clauses (a) and (c) of such definition shall be conclusively presumed to
satisfy the requirements of clause (b) of such definition unless (A) such Person
files a Statement on Schedule 13D with the Securities and Exchange Commission
disclosing a purpose inconsistent with said clause (b) (in which case said
clause (b) shall be deemed to be inapplicable commencing with the time such
Person became obligated to file such Statement) or (B) the Board of Directors
determines that such Person does not comply with said clause (b) (in which case,
unless clause (A) of this sentence shall also be applicable, clause (b) of such
definition shall be deemed to be inapplicable commencing with the first public
announcement by the Company of such determination).
(m) "Stock Acquisition Date" shall mean the time and day of the first
public announcement (which for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to the Exchange Act) by the
Company or an Acquiring Person containing information indicating that an
Acquiring Person has become such. For purposes hereof, in the event that it is
publicly announced that any Person has acquired beneficial ownership of
sufficient shares of Common Stock to cause such Person to become an Acquiring
Person under clause (i) or clause (ii) of the definition of Acquiring Person,
such Person shall not be deemed an Acquiring Person for up to ten Business Days
(or such shorter period as shall be determined by the Board of Directors) if
such Person advises the Company that it acquired beneficial ownership
inadvertently (within the meaning of clause (z) of the proviso to the definition
of an Acquiring Person) and the Board of Directors is continuing to determine
whether such Person qualifies for the exclusion contained in such clause (z).
(n) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity as to which such Person beneficially owns sufficient
voting securities (or other ownership interests having ordinary voting power
sufficient, in the absence of contingencies, to elect at least a majority of its
directors (or individuals performing similar functions).
(o) The terms set forth below are defined in the Sections indicated
below:
TERM SECTION
Act 3(a)
Common Stock Equivalent 11(a)(iv)(B)
current market price 11(d)
Current Value 11(a)(iv)(A)
Declaration Date Recitals
Distribution Date 3(a)
equivalent preferred shares 11(b)
Exchange Act l(b)
Exchange Ratio 24
Expiration Date 7(a)
Final Expiration Date 7(a)
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NASDAQ 11(d)(i)
Principal Party 13(b)
Purchase Price 7(b)
Record Date Recitals
Redemption Price 23
Right Recitals
Right Certificates 3(a)
Rights Agent Recitals
Section 13 Event 13(a)
Security 11(d)(i)
Spread 11(a)(iv)(A)
Substitution Period 11(a)(iv)
Summary of Rights 3(b)
Trading Day 11(d)(i)
Trigger Date 11(a)(iii)
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 in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable upon ten (10) days prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such Co-Rights Agent. In the event that the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agents shall be as the Company shall determine.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the close of business
on the earlier of (i) the tenth Business Day after the Stock Acquisition Date
(including any such date which is after the Declaration Date even if prior to
the Record Date), and (ii) the tenth Business Day (or such later day 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
of, or the first public announcement of the intent of any Person (other than a
Company Entity) to commence (which intention to commence remains in effect for
five Business Days after such announcement), a tender or exchange offer the
consummation of which would result in any person acquiring (when added to any
equity securities as to which such Person is the Beneficial Owner immediately
prior to such commencement) Beneficial Ownership of 10% or more of the issued
and outstanding shares of Common Stock (the earlier of the dates referred to in
clauses (i) and (ii) above 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 the Common Stock registered in the names
of the holders of the Common Stock (which certificates for Common Stock shall
also be deemed (other than for purposes of this Section 3 and any provision of
this Agreement referring to the issuance of Rights Certificates) to be Right
Certificates (as such term is hereinafter defined)) and not by separate Right
Certificates, and (y) the Rights (and the right to receive Right Certificates)
will be transferable only simultaneously and together with the transfer of the
underlying shares of Common Stock. As soon as practicable after the Distribution
Date, subject to Section 11(a)(iii) hereof, the Company shall prepare and
execute and the Rights Agent will countersign, and the Company will send or
cause to be sent,
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by first-class, postage-prepaid mail, to each record holder of the Common Stock
as of the close of business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a right
certificate, substantially in the form of Exhibit A hereto (a "Right
Certificate"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as herein provided. As of and after the close of business
on the Distribution Date, the Rights will be evidenced solely by such Right
Certificates and may be transferred only by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.
(b) Following the Record Date, the Company will make available the
Summary of Rights to Purchase Preferred Shares (the "Summary of Rights"), upon
the request of any record holder of the Common Stock as of the close of business
on the Record Date or thereafter, as shown by the records of the Company. With
respect to certificates for Common Stock outstanding as of the close of business
on the Record Date or issued prior to the Distribution Date, until the
Distribution Date, the Rights will be evidenced solely by such certificates
registered in the names of the holders thereof (whether or not such certificates
contain the legend contemplated by Section 3(c) of the Rights Agreement, dated
as of November 21, 1990, by and between Fleet/Norstar Financial Group, Inc. and
Fleet National Bank, as Rights Agent). Until the Distribution Date (or the
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificate for Common Stock outstanding as of the close of business on the
Record Date shall also constitute the transfer of the Rights associated with the
shares of Common Stock represented thereby.
The Company will mail to any record holder of a Right (including, prior
to the Distribution Date, a record holder of shares of Common Stock) a copy of
this Rights Agreement, without charge, within ten Business Days of a written
request therefor.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date and prior to the earlier of the
Distribution Date and the Expiration Date, and all certificates for shares of
Common Stock issued or which become outstanding after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date, shall have
impressed on, printed on, written on or otherwise affixed to them substantially
the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between FleetBoston Financial
Corporation and EquiServe, LP, dated as of August 16, 2000, as it may from
time to time be supplemented or amended pursuant to its terms (the "Rights
Agreement"), the terms of which are hereby incorporated by reference and a
copy of which is on file at the principal executive offices of FleetBoston
Financial Corporation. Under certain circumstances as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. FleetBoston Financial
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge within ten business days after receipt of a
written request therefor. Under certain circumstances provided for in the
Rights Agreement, Rights issued to or beneficially owned by any Person who
is an Acquiring Person or an Affiliate or Associate thereof
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(as such terms are defined in the Rights Agreement) or any subsequent
holder of such Rights may become null and void.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in 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 law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or quotation system on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of ten-thousandths of a
Preferred Share as shall be set forth therein at the Purchase Price (as such
term is hereinafter defined), but the number and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein. To the extent provided in Section 11(a)(iii)
hereof, certain Right Certificates shall contain the legend provided for
therein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, any Vice Chairman, its President or any Vice President, either manually
or by facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned by the Rights Agent, either manually or by
facsimile signature, and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed or
attested 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 with the same force and effect as though
the person who signed or attested such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed or attested
on behalf of the Company by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Company to sign or
attest 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 such other office designated by it
for such purpose, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the name(s) and address(es) of the
holder(s) of each Right Certificate, the number of Rights evidenced on its face
by each Right Certificate, the certificate number of each Right Certificate and
the date of each Right Certificate.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Sections 11(a)(iii) and 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 Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
8
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one ten-thousandths of a Preferred Share (or other
securities, cash and/or assets, as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate 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 principal office or such
other office of the Rights Agent designated for such purpose. 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 unless and
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side thereof and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Associates and Affiliates of the foregoing as the
Company shall reasonably request. Thereupon the Rights Agent shall 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 holder of Rights of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of an indemnity
or security reasonably satisfactory to the Company and the Rights Agent, and
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 holder 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 Sections 9(e) and 11(a)(iii) and (iv), the registered
holder of any Right Certificate may exercise the Rights evidenced thereby 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 shares and certificate
on the reverse side thereof duly executed, to the Rights Agent at its principal
office or such other office designated by it for such purpose, together with
payment of the Purchase Price for each ten-thousandth of a Preferred Share (or
other securities, cash and/or assets, as the case may be) as to which the Rights
are exercised, at or prior to the earliest of (i) the close of business on
November 21, 2010 (the "Final Expiration Date"), (ii) the date and time at which
the Rights are redeemed as provided in Section 23 hereof, (iii) the date and
time at which the Rights are exchanged as provided in Section 24 hereof or (iv)
the time at which the Rights expire pursuant to Section 13(d) (such earliest
date and time being referred to herein as the "Expiration Date").
(b) The purchase price for each one ten-thousandth of a Preferred Share
pursuant to the exercise of a Right (the "Purchase Price") shall initially be $[
], 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) Except as otherwise provided herein (including, without limitation,
as provided in Sections 9(e) and 11(a)(iii)), upon receipt of a Right
Certificate representing
9
exercisable Rights, with the form of election to purchase and certificate duly
executed, accompanied by payment of the Purchase Price for the Preferred Shares
(or other securities, cash and/or assets, as the case may be) to be purchased
and an amount equal to any applicable transfer tax (as determined by the Rights
Agent) in cash, or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes such transfer agent to
comply with all such requests or (B) if the Company has elected to deposit the
Preferred Shares issuable upon exercise of the Rights hereunder into a
depository, requisition from the depositary agent depositary receipts
representing such number of one ten-thousandths 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 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, deliver any such cash,
promptly after its receipt, to or upon the order of the registered holder of
such Right Certificate. In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or property are available for
distribution by the Rights Agent, if and when appropriate.
(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 to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Sections 7(e), 11(a)(iii)
and 14 hereof.
(e) Notwithstanding any other provision of this Agreement, neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to a registered holder of any Right Certificate upon the occurrence
of any purported transfer or exercise as set forth in this Section 7 unless and
until the registered holder shall have completed and signed the certificate
contained in the form of election to purchase shares set forth on the reverse
side thereof and shall have provided such additional evidence of the identity of
the Beneficial Owner and former Beneficial Owner (and Associates and Affiliates
of the foregoing) 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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificate 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
10
Rights Agent shall deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company covenants and agrees that, commencing not later than five business days
following the Record Date, it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or other securities or any
Preferred Shares or other securities held in its treasury, the number of
Preferred Shares or shares of other securities that, as provided in this
Agreement (including Section 11(a)(iv) hereof), will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all Preferred Shares and/or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price) , be
duly and validly authorized and issued and fully paid and nonassessable shares.
(c) The Company covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares and/or other securities, as the case may be, upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or delivery of
certificates or depositary receipts for Preferred Shares and/or other
securities, as the case may be, in a name other than that of the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
and/or other securities, as the case may be, 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.
(d) So long as the Preferred Shares (and/or other securities) issuable
upon the exercise of the 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.
(e) The Company shall use its best efforts to (i) file as soon as
practicable following the Stock Acquisition Date (or if required by law prior to
the Stock Acquisition Date, as soon as possible following the Distribution
Date), a registration statement under the Act with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act and the rules and
regulations thereunder) until the earlier of (A) the date as of which the Rights
are no longer exercisable for such securities and (B) the expiration of the
Rights. The Company will also take such action as may be appropriate to ensure
compliance with the securities or "blue sky" laws of the various states. The
Company may temporarily
11
suspend, in accordance with applicable law, for a period of time not to exceed
90 days after the date set forth in clause (i) of the first sentence of this
Section 9(e), the exercisability of the Rights in order to prepare and file such
registration statement and permit it 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.
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, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
Section 10. PREFERRED SHARE RECORD DATE. Each person in whose name any
certificate or depositary receipt for Preferred Shares and/or other securities,
as the case may be, is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Preferred Shares and/or
other securities, as the case may be, represented thereby on, and such
certificate or depositary receipt shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate or depositary receipt
shall be dated, the next succeeding Business Day on which the transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares or other securities of the Company 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 OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of securities, or fractions
thereof, 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
Declaration Date (A) declare or pay a dividend on the Preferred Shares payable
in Preferred Shares, (B) subdivide or split the outstanding Preferred Shares,
(C) combine or consolidate 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, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of capital stock issuable
upon exercise of a Right on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and kind
of shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, split, combination,
consolidation or
12
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 hereof, in the event that a Stock
Acquisition Date occurs, proper provision shall be made so that each holder of a
Right (except as otherwise provided in clause (iii) below) thereafter shall have
the right to receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, in lieu of Preferred Shares,
such number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one ten-thousandths of a Preferred Share for which a Right was or would have
been exerciseable for immediately prior to the Stock Acquisition Date (whether
or not then actually exerciseable) is then exercisable and (y) dividing that
product by 50% of the current market price per share of the Common Stock
(determined pursuant to Section 11(d) hereof) on the Stock Acquisition Date,
and, at the time such provision is made the Company shall cause to be reserved
out of its authorized but unissued (or treasury) shares of Common Stock, the
lesser of (m) the number of shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Rights (other than those referred
to in clause (iii) below) and (n) the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights (in
which case the Company shall also comply with clause (iv) below of this Section
11(a)).
(iii) Notwithstanding any provision of this Agreement, from and after a
Stock Acquisition Date, any Rights beneficially owned by (p) an Acquiring Person
or any Associate or Affiliate thereof, (q) a transferee of an Acquiring Person
(or Associate or Affiliate thereof) who becomes the transferee of such Rights
concurrently with such Acquiring Person becoming such or at any time thereafter,
or (r) a transferee of an Acquiring Person (or Associate or Affiliate thereof)
who becomes a transferee prior to the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) by the Acquiring Person to holders of its stock or other equity
or to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding, whether or not in writing, regarding the
transferred Rights or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding, whether or not
in writing, which has as a primary purpose or effect the avoidance of this
Section 11(a)(iii), shall become null and void, and any existing or subsequent
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. Any Right Certificate issued pursuant to
Section 3 or Section 22 hereof that represents Rights beneficially owned by any
Person referred to in clause (p), (q) or (r) above, and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who is, was or became an Acquiring Person or an Affiliate
or an Associate of an Acquiring Person (as those terms are defined in the
Rights Agreement). This Right Certificate and the Rights represented hereby
may be or
13
may become null and void in the circumstances specified in the Rights
Agreement.
The Company shall use all reasonable efforts to comply with this clause (iii),
but neither it nor the Rights Agent shall have any liability to any Person as a
result of the failure to make any determination with respect to an Acquiring
Person, or its Associates, Affiliates or to transferees of the foregoing.
(iv) From and after the Stock Acquisition Date, in the event that the
number of shares of Common Stock which are authorized by the Company's
certificate of incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing clause (ii) of
this Section 11(a), the Company shall (to the extent permitted by applicable
law):
(A) determine the excess of (1) the value (the "Current Value") of the
shares of Common Stock issuable upon the exercise of a Right pursuant to
the foregoing clause (ii) of this Section 11(a) (assuming that there were a
sufficient number of authorized but unissued shares to permit exercise in
full of all outstanding Rights for Common Stock) over (2) the then current
Purchase Price (such excess being referred to herein as the "Spread"), and
(B) with respect to each Right, to the extent permitted by applicable law
and any contractual restrictions binding on the Company, make adequate provision
to substitute for such shares of Common Stock issuable upon exercise of a Right
pursuant to the foregoing clause (ii) of this Section 11(a), upon payment of the
Purchase Price, (1) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock being referred to herein
as "Common Stock Equivalents")), (2) reduction in the purchase price, (3) debt
securities of the Company, (4) cash, (5) other assets, or (6) any combination of
the foregoing (provided, that in making any such provision, Rights shall, to the
fullest extent feasible in view of the number of shares of authorized Common
Stock not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights, be exercisable for Common Stock), in each case having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of Directors
of the Company;
PROVIDED, HOWEVER, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
Stock Acquisition Date, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread.
Notwithstanding the immediately preceding sentence, if the Board of Directors of
the Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may be
extended to the extent necessary, but not to more than ninety (90) days after
the Stock Acquisition Date, in order that the Company may seek stockholder
approval for the
14
authorization of such additional shares (such period, as it may be extended,
being referred to herein as the "Substitution Period") . To the extent that the
Company determines that some action need be taken pursuant to the foregoing
provisions of this Section 11(a)(iv), the Company (x) shall provide, subject to
the foregoing clause (iii) of this Section 11(a), that such action shall apply
uniformly to all outstanding Rights and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iv), the
terms of any Common Stock Equivalent shall be determined so that such Common
Stock Equivalent shall have the same value as the Common Stock on the Stock
Acquisition Date.
(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 market
price per Preferred Share (as defined in 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, of which the numerator shall be the number of
Preferred Shares and equivalent 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 to be so
offered (and/or the aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such current market price and of
which the denominator shall be the number of Preferred Shares and equivalent
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). 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. Preferred Shares owned by or held for the account
of the Company or any of its Subsidiaries shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those
15
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 market price per Preferred Share (as defined in Section
11(d) hereof) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and of which the
denominator shall be such current market price per Preferred Share. 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 which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" for any security (a "Security" for purposes 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 thirty (30) consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; PROVIDED,
HOWEVER, that in the event that the current market price per share of the
Security is determined during a period following the announcement by the issuer
of such Security of a dividend or distribution on such Security payable in
shares of such Security or securities convertible into (or exercisable or
exchangeable for) shares of such Security, or any subdivision, split,
combination, consolidation 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, split, combination,
consolidation or reclassification, then, and in each such case, the current
market price shall be appropriately adjusted to reflect ex-dividend or
ex-distribution trading. The closing price for each day shall be the last sale
price (during regular trading hours, excluding extended trading) 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 shares of the
Security are listed or admitted to trading or, if the shares of the Security are
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or any successor
("NASDAQ") or such other system then in use, or, if on any such date the shares
of the Security are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Security selected by the Board of Directors of the Company. If
on such date no such market maker is making a market in the Security, the fair
value of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used, such determination to be described in a
statement filed with the Rights Agent. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the shares of the
Security are listed or admitted to trading is open for the transaction of
business or, if the shares of the Security are not listed or admitted to trading
on any national securities exchange, but are quoted on NASDAQ, a day on which
NASDAQ is in operation or if the shares of the Security are neither listed nor
16
admitted to trading on any national securities exchange nor quoted on NASDAQ, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current market
price" of the Preferred Shares shall be determined in accordance with the method
set forth in Section 11(d)(i), except that if the Preferred Shares are not
publicly traded, the "current market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common Stock
as determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof), multiplied by ten thousand (as such number may be appropriately
adjusted for stock splits, stock dividends, recapitalizations and similar events
after the Declaration Date). If neither the Common Stock nor the Preferred
Shares are publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(e) Notwithstanding anything herein to the contrary, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 11(e) are not required to be made
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 one hundred millionth of a Preferred Share. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment and (ii) the date of the expiration
of the right to exercise any Rights.
(f) In the event that at any time, 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 securities other than Preferred
Shares, thereafter the number or amount of such other securities so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the securities contained in Sections 11(a), (b), (c), (g), (h), (i),
(j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 of this
Agreement with respect to the Preferred Shares shall apply on like terms to any
such other securities.
(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 ten-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) of this Agreement, upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c) of this Agreement,
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 ten-thousandths of a Preferred Share (calculated to the nearest
one one hundred millionth of a Preferred Share) obtained by (i) multiplying (x)
the number of one ten-thousandths of a Preferred Share covered by a Right
17
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights held by each holder of Rights, in
substitution for any adjustment in the number of one ten-thousandths 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 ten-thousandths of a Preferred Share for which it was
exercisable immediately prior to such adjustment. Each holder of a Right held of
record prior to such adjustment of the number of Rights shall become the holder
of that number of Rights (calculated to the nearest one one millionth) 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, and
information as to the manner in which such adjustment is to be effected. This
record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have not been issued, in the case of a stock split, stock dividend or similar
event, such adjustment in the number of Rights held by each existing holder of
Rights shall be effected (unless the Board of Directors otherwise elects), by
allocating the adjusted number of Rights proportionately among all shares held
by such holder immediately after such stock split, stock dividend or other
event. If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i) the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Right
Certificates on such record date, Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one ten-thousandths 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 ten-thousandth of a Preferred
Share and the number of one ten-thousandths 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 ten-thousandth 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.
18
(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 Company's Board of Directors shall, in its sole discretion,
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at
less than the current 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) stock dividends or (v) issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any time after the
Declaration Date and prior to the Distribution Date, (i) declare a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide or split the outstanding Common Stock, (iii) combine or consolidate
the outstanding Common Stock into a smaller number of shares, or (iv) effect a
reclassification of its outstanding Common Stock, the number of Rights
associated with each share of Common Stock shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common Stock
immediately following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following such event. The Company covenants and
agrees that it shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a wholly-owned Subsidiary of the
Company in a transaction which does not violate Section 11(o) hereof), (ii)
merge with or into any other Person (other than a wholly-owned Subsidiary of the
Company in a transaction which does not violate Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), if (x) at the time of or immediately
after such consolidation, merger, sale or transfer there are any charter or
by-law provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended to be afforded
by the Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who constitutes,
or would constitute, the "Principal Party" for
19
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(n).
(o) The Company covenants and agrees that, after a Stock Acquisition
Date it will not, except as permitted by Section 24 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such action
would be to, materially diminish or eliminate the benefits intended to be
afforded by the Rights.
Section 12. CERTIFICATION OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 or 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 and
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Shares or the Common Stock a copy of such certificate. The Rights
Agent may rely on such certificate and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event (a "Section 13 Event") that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any Person or Persons, (y) the Company shall
consolidate with or merge with and into, any Person or Persons, and the Company
shall be the continuing or surviving corporation of such consolidation or merger
(other than, in a case of any transaction described in (x) or (y), a merger or
consolidation which would result in all of the securities generally entitled to
vote in the election of directors ("voting securities") of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting securities of Company or such surviving entity
outstanding immediately after such merger or consolidation and holders of such
securities not having changed as a result of such merger or consolidation), 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 more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statements) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which does not
violate Section 11(o) hereof), then, and in each such case (except as provided
in Section 13(d) hereof), proper provision shall be made so that (i) each holder
of a Right, except as provided in Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then-current
Purchase Price in accordance with the terms of this Agreement Common Stock and
other securities or assets of the Company, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (A) multiplying the then current Purchase Price by the
number of one ten-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a Section 13 Event
(without
20
taking into account any adjustment previously made pursuant to Section
11(a)(ii)) and (y) dividing that product by 50% of the current market price per
share of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof (applying the
provisions thereof with respect to Preferred Shares of the Company to the Common
Stock of such Principal Party)) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be possible, in relation to the shares of its Common
Stock thereafter deliverable upon the exercise of the Rights.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a): (A) the Person that
is the issuer of any securities into which Common Shares of the
Company are converted in such merger or consolidation, or, if there is
more than one such issuer of the issuer of Common Stock of which has
the greatest aggregate market value or (B) if no securities are so
issued, the Person that is the other party to such merger or
consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the greatest aggregate market value
(including, if applicable, the Company if it is the surviving
corporation); 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 or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons which is the issuer of
Common Stock having the greatest aggregate market value;
PROVIDED, HOWEVER, that in any of the cases described in 13(b)(i) or (b)(ii)
above, (1) if the shares of Common Stock of such Person are not at such time and
have not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the shares of Common Stock of which are
and have been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the shares of Common Stock 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 shares of Common Stock having the greatest aggregate market value;
and (3) in case such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint ventures and the Principal
Parties in each such chain shall bear the obligations
21
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
its authorized shares of Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior 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 that all rights of first refusal or preemptive rights in respect of the
issuance of shares of Common Stock of the Principal Party upon exercise of the
outstanding Rights have been waived and that such transaction shall not result
in a default by the Principal Party under this Agreement, and further providing
that, not later than the effective time of such Section 13 Event, the Principal
Party at its own expense shall:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon
the exercise of the Rights on an appropriate form, and cause such
registration statement to become effective as soon as practicable
after such filing and prior to the effective time of such Section 13
Event, and to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act; and
(iv) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon exercise of
the Rights on a national securities exchange or to meet the
eligibility requirement for quotation on NASDAQ.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Stock
Acquisition Date, the Rights which have not theretofore been exercised pursuant
to Section 11(a)(ii) shall thereafter become exercisable in the manner described
in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if: (i) such transaction is consummated with a
Person or Persons who acquired Common Stock pursuant to an Approved Offer (or an
Affiliate of any such Person or Persons) as promptly as reasonably practical
(and in any event within one year) following consummation of such Approved
Offer; (ii) the price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all holders of Common
Stock whose shares
22
were purchased pursuant to such Approved Offer; and (iii) the
form of consideration offered in such transaction is the same as the form of
consideration paid pursuant to such Approved Offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
(e) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has provision in any of its authorized securities
or in its Certificate of Incorporation or By-Laws or other instrument governing
its corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current market price per
share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then current market price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights (except, prior to the
Distribution Date, as provided in Section 11 hereof) or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall 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 of the Rights 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 by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights, as selected by the
Board of Directors of the Company. If on any such date the Rights are not quoted
by any such organization and no professional market maker is making such 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.
23
(b) Following the occurrence of the Stock Acquisition Date or a Section
13 Event, the Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one ten-thousandth)
upon exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are integral multiples
of one ten-thousandth). Fractions of Preferred Shares in integral multiples of
one ten-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts in lieu of
fractional Preferred Shares that are not integral multiples of one
ten-thousandth of a Preferred Share, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one 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.
(c) The holder of a Right by his acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, other than the rights of action vested in the Rights Agent pursuant
to Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, any holder of the Common Stock), may, on his own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only simultaneously and together with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or such other office of the Rights Agent designated
for such purpose, duly endorsed or accompanied by
24
a proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6, Section 7(e) and Section 11(a) hereof, 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 Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common Stock
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; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, that the
Company must use its best efforts to have any such injunction, order,
decree or ruling lifted, dissolved or otherwise overturned as soon as
possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Shares or any
other securities of the Company which may at any time be issuable 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 stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 of this Agreement), or to receive
dividends or other distributions or to exercise any preemptive 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. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability.
25
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 shares of Common Stock 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.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust 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 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 Certificate so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right Certificate
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 Certificate shall have
the full force provided in the Right Certificate and in this Agreement.
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 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 expressly set forth in this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent. The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, all of which the Company and
the holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including,
26
without limitation, the identity of any Acquiring Person or any Affiliate
or Associate thereof) 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
the Chairman of the Board, any Vice Chairman, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary
or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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.
(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 Rights becoming null and void
pursuant to Section 11(a)(iii) hereof); nor shall it be responsible for any
adjustment required under the provisions of Sections 11 or 13 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor 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 other
securities to be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares or other securities will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will inform the Rights Agent promptly
upon the Company's determination that a Person has become an Acquiring
Person and the Rights Agent will not be responsible for determining the
status of a Person as an Acquiring Person prior to such notification except
as such status may be indicated in the assignment or election to purchase
of a Right Certificate. 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.
27
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, any Vice Chairman, the President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and
it 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. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in
such application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action
to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company 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 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) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to any item
therein, 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 Stock by registered or certified mail, and to the holders of the
Right Certificates by first class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the
28
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 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 his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (i)
a corporation, bank or trust company organized and doing business under the laws
of the United States or of any state thereof, in good standing, having its
principal office in the United States of America, which is authorized under
applicable laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (ii) an Affiliate of a corporation described
in clause (i) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall, upon payment of its charges, 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 Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be. Notwithstanding the foregoing provision, in the event of
resignation, removal or incapacity of the Rights Agent, the Company shall have
the authority to act as the Rights Agent until a successor Rights Agent shall
have assumed the duties of the Rights Agent hereunder.
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 of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date (other than upon exercise or exchange of a Right) and prior to the
Expiration Date, the Company, subject to Section 11(a)(iii) hereof, (a) shall,
with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Company to the extent that the terms of such securities do not otherwise
adequately adjust for the issuance of the Rights, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) the Company shall not be
obligated to issue any Right Certificate if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights
29
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION. (a) The Company may, by resolution of its Board
of Directors, at its option, at any time prior to the earlier of (x) the Stock
Acquisition Date 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 $.01 per Right, appropriately adjusted to reflect any Common Stock
split, Common Stock dividend or similar transaction occurring after the
Declaration Date (such redemption price being hereinafter referred to as the
"Redemption Price"). The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the "current market price", as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of such Board
resolution) or any other form of consideration deemed appropriate by the Board
of Directors.
(b) Immediately upon adoption of an effective resolution of the Board
of Directors of the Company ordering the redemption of the Rights in compliance
with Section 23(a) (or upon the subsequent satisfaction of all conditions to
such redemption established by such resolution), evidence of which shall have
been filed with the Rights Agent, 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.
Within ten (10) Business Days after the action of the Board of Directors
ordering the redemption of the Rights (or such subsequent satisfaction of all
such conditions), 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 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 Stock. 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 any Rights at any time
in any manner other than that specifically set forth in this Section 23, and
other than in connection with the repurchase of Common Stock of the Company
prior to the Distribution Date.
(c) In the event that the Board of Directors adopts an effective
resolution ordering the redemption of the Rights in compliance with Section
23(a), the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent of
the Common Stock, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Company.
Section 24. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time after the Stock Acquisition Date, exchange all or part
of the then-outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a) (iii) hereof)
for Common Stock (or Common Stock Equivalents) at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any
30
stock split, stock dividend or similar transaction occurring after the
Declaration Date (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any time after any
Person (other than a Company Entity), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of Rights pursuant to and in compliance with
subsection (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, which excludes Rights that have become
void pursuant to the provisions of Section 11(a)(iii) hereof, shall be to
receive that number of shares of Common Stock, or Common Stock Equivalents,
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly file notice of such Board action with
the Rights Agent and 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 shall promptly 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.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required, pursuant to this Section 24, to
issue fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates, with regard to which such fractional shares of Common Stock would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (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, and the value of any
Common Stock Equivalent shall be deemed to have the same current market value as
the Common Stock on such date.
Section 25. NOTICE OF CERTAIN EVENTS. In case the Company shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution described to the holders of its Preferred Shares (other
than a regular periodic cash dividend), or (b) to offer to the holders of its
Preferred Shares rights, options or warrants to subscribe for or to purchase any
additional Preferred Shares or securities convertible into Preferred Shares, or
(c) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred Shares)
or any other event described in Section 11(a)(i) hereof, or (d) to effect any
merger, consolidation or other combination into or with any Person
31
(other than a Subsidiary of the Company in a transaction which does not violate
Section 11(o) hereof), or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which does not violate Section 11(o) hereof), or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action to the extent feasible and file a
certificate with the Rights Agent to that effect, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or Rights,
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 Common Stock 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 (a) or (b) above at least twenty (20) days prior
to the record date for determining holders of the Common Stock for purposes of
such action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock and/or Preferred Shares,
whichever shall be earlier.
The Company shall, on the Stock Acquisition Date, or as soon as
practicable thereafter, give each holder of a Right, in accordance with Section
26 hereof, a notice of the occurrence of such event, which shall describe the
event and the consequences of such event to holders of Rights under Sections
11(a)(ii), (iii) and (iv) hereof. The failure to give notice required by this
Section 25 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
Section 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
FleetBoston Financial Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
EquiServe, LP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, if prior
to the Distribution Date, to the
32
holder of any certificate for shares of Common Stock) 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 the Company so directs, from time to time supplement or amend
this Agreement without the approval of any holders of Rights in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein
(PROVIDED that any amendment made pursuant to clause (i) or (ii) hereof after a
Stock Acquisition Date shall not materially adversely affect the interests of
the holders of Right Certificates (other than an Acquiring Person or any
Affiliate or Associate thereof)), (iii) prior to the Stock Acquisition Date, to
effect any other change or modification which the Company may deem necessary or
desirable, or (iv) after the Stock Acquisition Date, to make any other
provisions in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or any Affiliate or Associate thereof). Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may not be amended or
supplemented (x) to reinstate a right of redemption if the Rights are not then
redeemable or (y) to decrease the Redemption Price. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment has been approved by the Company's Board of
Directors and is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment; PROVIDED, HOWEVER, that the
Rights Agent may, but shall not be obligated to, enter into any such supplement
or amendment that adversely affects its rights, duties or immunities under this
Agreement. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed to coincide with the interests of holders of shares of
Common Stock (other than an Acquiring Person or any Affiliate or Associate
thereof).
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. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, of the Common Stock of the Company) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, of the Common Stock of the Company).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement or the Rights is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of this Agreement and the Rights shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; PROVIDED, HOWEVER,
that notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the
33
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth Business Day following the date of such determination by the Board of
Directors.
Section 31. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
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 to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not to redeem the Rights pursuant to Section 23
hereof, or exchange the Rights pursuant to Section 24 hereof, or to supplement
or amend the Agreement and a determination as to whether any proposed supplement
or amendment adversely affects the interests of the holders of Right
Certificates and comports with the requirements of Section 27 hereof or to find
or to announce publicly that any Person has become an Acquiring Person or is a
Qualifying Investor). For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or other securities outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including for purpose of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors of the
Company or any director to any liability to the holders of the Rights.
Section 32. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Rhode Island 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 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
34
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the date and the year first above written.
FleetBoston Financial Corporation
By:_____________________________
Attest: Title:
By:_____________________________
Title:
EQUISERVE, LP
By:_____________________________
Attest: Title:
By:_____________________________
Title:
35
EXHIBIT A
FORM
of
STATEMENT OF RESOLUTIONS ESTABLISHING
CUMULATIVE PARTICIPATING JUNIOR PREFERRED STOCK (SERIES 2000)
AS A SERIES OF PREFERRED STOCK
of
FLEETBOSTON FINANCIAL CORPORATION
(Pursuant to Section 7-1 of the
Rhode Island Business Corporation Act)
-----------------------------
FleetBoston Financial Corporation, a corporation organized and existing
under the Rhode Island Business Corporation Act (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation in accordance with Sections 7-1.1-14
and 7-1.1-15 of the Rhode Island Business Corporation Act at a meeting duly
called and held on August 16, 2000:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of Article FOURTH
of the Restated Articles of Incorporation, the Board of Directors hereby creates
a series of Preferred Stock, par value $1.00 per share, of the Corporation (the
"Preferred Stock") and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
CUMULATIVE PARTICIPATING JUNIOR PREFERRED STOCK
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Cumulative Participating Junior Preferred Stock (Series 2000)"
(the "Junior Preferred Stock") and the number of shares constituting the Junior
Preferred Stock shall be 500,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Junior Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Junior Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) The holders of shares of Junior Preferred Stock, in preference to
the holders of Common Stock, par value $.01 per share (the "Common Stock"), of
the Corporation, and of any other junior stock, but subject to the rights of
holders of any senior 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 days of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Junior Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $100 or (b) subject to the
provision for adjustment hereinafter set forth, 10,000 times the aggregate per
share amount of all cash dividends, and 10,000 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 Junior Preferred Stock. In
the event the Corporation shall at any time after August 16, 2000 declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or split or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock), then in each such case the amount to which holders
of shares of Junior 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.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $100 per share on the Junior
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the Record Date for the determination of holders
of shares of Junior 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 Junior 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 Junior 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.
A-2
Section 3. VOTING RIGHTS. The holders of shares of Junior Preferred
Stock shall have the following voting rights:
(A) Each share of Junior Preferred Stock shall entitle the holder
thereof to ten thousand votes (subject to adjustment as set forth below) on
all matters submitted to a vote of the stockholders of the Corporation
(including, without limitation, the election of directors). In the event
the Corporation shall at any time after August 16, 2000 declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or split or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock), then in each such case the number of
votes to which holders of shares of Junior Preferred Stock were entitled to
immediately prior to such event shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in the Restated Articles of
Incorporation, or by law, the holders of shares of Junior Preferred Stock,
the holders of shares of Common Stock and the holders of any other capital
stock of the Corporation having general voting rights shall vote together
as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) (i) If at any time dividends on any Junior Preferred Stock shall be
in arrears in an amount equal to the full accrued dividends for six (6) or
more quarterly dividend periods, whether or not consecutive, shall not have
been paid or declared and a sum sufficient for the payment thereof
irrevocably set aside in trust for the holders of all of such shares, the
Board of Directors of the Corporation shall promptly take all necessary
actions to increase the authorized number of directors of the Corporation
by one (1) and the holders of the shares of the Junior Preferred Stock then
outstanding shall be entitled (by series, voting as a single class) to
elect one (1) person director to the Board of Directors of the Corporation
(such right to elect one (1) director being hereinafter sometimes referred
to as the "special voting rights"), each outstanding share having such
right being entitled for such purpose to one vote; PROVIDED, HOWEVER, that
at such time as the arrearage in payment of dividends which gave rise to
the exercise of the special voting rights has been cured with regard to the
Junior Preferred Stock by waiver or payment of all accrued dividends, the
right of the holders of such shares so to vote as provided in this
paragraph (C)(i) of this Section 3 shall cease (subject to renewal from
time to time upon the same terms and conditions) and the term of office of
the person who is at that time a director elected by such holders shall
terminate and the number of directors of the Corporation shall be
automatically reduced by one (1).
(ii) At any time after the special voting rights shall have become
vested in the holders of the shares of the Junior Preferred Stock as
provided in paragraph (C)(i) of this Section 3, the Secretary of the
Corporation, as promptly as possible but in any event within twenty (20)
days after receipt of the written request of the holders of 10% of the
shares of the Junior Preferred Stock then outstanding, addressed to the
Corporation at its
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principal office, shall call a special meeting of the holders of the shares
of the Junior Preferred Stock for the purpose of electing such additional
director, such meeting to be held at any place as provided by the Bylaws of
the Corporation for meetings of the Corporation's stockholders, and upon
not less than ten (10) nor more than twenty (20) days notice. If such
meeting shall not be so called within twenty (20) days after receipt of the
request by the Secretary of the Corporation, then the holders of 10% of the
shares of the Junior Preferred Stock then outstanding may, by written
notice to the Secretary of the Corporation, designate any person to call
such meeting, and the person so designated may call such meeting, at any
such place as provided above and upon not less than ten (10) nor more than
twenty (20) days notice and for that purpose shall have access to the
stockholder record books of the Corporation. No such special meeting of the
holders of the shares of the Junior Preferred Stock and no adjournment
thereof shall be held on a date later than thirty (30) days before the
annual meeting of stockholders of the Corporation. At any meeting so called
or at any annual meeting held at any time when the special voting rights
are in effect, the holders of a majority of the shares of the Junior
Preferred Stock then outstanding, present in person or by proxy, shall be
sufficient to constitute a quorum for the election of such additional
director, and such additional director, together with any and all other
directors who are then members of the Board of Directors, shall constitute
the duly elected directors of the Corporation.
(iii) With respect to a vacancy arising in the directorship referred to
in paragraph (C)(i) of this Section 3 at any time when the special voting
rights are in affect pursuant to paragraph (C)(i) of this Section 3, upon
the written request of the holders of 10% of the shares of the Junior
Preferred Stock then outstanding, addressed to the Corporation at its
principal office, the Secretary of the Corporation shall give notice of a
special meeting of holders of the shares of the Junior Preferred Stock of
the election of a director to fill such vacancy caused by the death,
resignation or other inability to serve as a director elected by such
holders, to be held not less than ten (10) nor more than twenty (20) days
following receipt by the Secretary of the Corporation of such written
request. So long as special voting rights are in effect pursuant to
paragraph (i) of this Section 3(c), any director who shall have been so
elected by the holders of the Junior Preferred Stock may be removed at any
time, either with or without cause, only by the affirmative vote of the
holders of the shares at the time entitled to cast a majority of the votes
entitled to be cast for the election of such director at a special meeting
of such holders called for that purpose, and any vacancy thereby created
may be filled by the vote of such holders.
(D) Except as set forth herein, or as otherwise provided by the
Restated Articles of Incorporation or by law, holders of Junior Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
(E) Holders of Junior Preferred Stock shall be entitled to such notice
of each meeting of stockholders as is furnished to the holders of Common
Stock with respect to such meeting.
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Section 4. CERTAIN RESTRICTIONS.
(A) Subject to the provisions of the Restated Articles of
Incorporation, whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as provided in Section
2 are in arrears as of any Quarterly Dividend Payment Date, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except dividends paid ratably on the Junior
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends and upon dissolution, liquidation or winding
up) to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock, or any shares of
stock ranking on a parity with the Junior Preferred Stock, except in
accordance with the terms of the Restated Articles of Incorporation
and with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as
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part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Restated Articles of
Incorporation, or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Preferred Stock unless, prior thereto, the holders of
shares of Junior Preferred Stock shall have received $10,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Junior Preferred Liquidation
Preference"). Following the payment of the full amount of the Junior Preferred
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Junior Preferred Stock unless, prior thereto, the holders of shares
of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Junior Preferred
Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii) immediately above being referred to as the "Adjustment Number"). Following
the payment of the full amount of the Junior Preferred Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Junior
Preferred Stock and Common Stock, respectively, holders of Junior Preferred
Stock and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to one (1) with respect to such Junior Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Junior Preferred Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Junior Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after August 16,
2000, (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide or split the outstanding Common Stock, or (iii) combine or
consolidate the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment 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.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation should
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 each share of
Junior Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 10,000 times the aggregate amount of stock, securities, cash
and/or
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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
Corporation shall at any time after August 16, 2000 declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision
or split or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange of change of shares of Junior 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.
Section 8. RANKING. The Junior Preferred Stock shall rank, as to
dividends and upon liquidation, dissolution or winding up, (a) on a parity with
the Common Stock, and (b) (to the extent permitted by the Restated Articles of
Incorporation) junior to any other series of Preferred Stock and to any other
class of capital stock of the Corporation unless the terms of such series or
class shall expressly provide otherwise (and, if not so permitted by the
Restated Articles of Incorporation, on a parity with such series or class).
Section 9. NO REDEMPTION. The shares of Junior Preferred Stock shall
not be redeemable.
Section 10. FRACTIONAL SHARES. The Junior 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 shares of Junior Preferred Stock.
IN WITNESS WHEREOF, this Statement of Resolutions Establishing a Series
of Shares is executed on behalf of the Corporation by its duly authorized
officer and attested by its Assistant Secretary as of the __ day of ___________,
2000.
-----------------------------------
[Title: ]
Attest:
---------------------------------
Secretary
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EXHIBIT B
(Form of Right Certificate)
Certificate No. R- _____________________ Rights
NOT EXERCISABLE AFTER NOVEMBER 22, 2010 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO IS, WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS THOSE TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN THE
RIGHTS AGREEMENT.]1
Right Certificate
FLEETBOSTON FINANCIAL CORPORATION
This certifies that ___________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of November 22, 2000 (the "Rights
Agreement") between FleetBoston Financial Corporation, a Rhode Island
corporation (the "Company"), and EquiServe, LP (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date and prior to 5:00 P.M.
(New York City time) on the Expiration Date (as such terms are defined in the
Rights Agreement) at the principal office or such other office of the Rights
Agent designated for such purpose, or of its successors as Rights Agent, one
ten-thousandth of a fully-paid, nonassessable share of Cumulative Participating
Junior Preferred Stock (Series 2000), par value $1.00 per share (the "Junior
Preferred Shares"), of the Company, at a purchase price of $___ per one
ten-thousandth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the appropriate Form of Election to
Purchase Shares duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, have been
determined as of August 16, 2000.
As provided in the Rights Agreement, the Purchase Price and
the number of one ten-thousandths of a Junior Preferred Share or other
securities which may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and
--------
1 The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
adjustment upon the happening of certain events, and in certain circumstances
may be exercised to purchase securities of issuers other than the Company.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are available free of charge upon written request from the
Company at:
FleetBoston Financial Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one ten-thousandths of a Junior Preferred Share as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive, upon surrender hereof, another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right (payable in cash, shares of Common Stock
or other consideration), appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (and the Rights Agreement itself) may be
amended by action of the Company's Board of Directors.
No fractional Junior Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one ten-thousandth, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Junior Preferred Shares or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions
B-2
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________________________, 20__.
Attest: FLEETBOSTON FINANCIAL CORPORATION
By:_____________________________ By:_____________________________
Assistant Secretary Title:
Countersigned:
By:_____________________________
Authorized Signature
B-3
(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: ___________, 20__
_____________________________
Signature
Signature Guaranteed:
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ___________________, 20__ _____________________________
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE SHARES
(To be executed if holder desires to
exercise the Right Certificate)
To FleetBoston Financial Corporation:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
Junior Preferred Shares (or such other securities of the Company or any other
person) and requests that certificates for such Junior Preferred Shares 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:
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________________, 20__
_____________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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