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EXHIBIT 4
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
September 10, 1998
between
▇▇▇▇▇▇▇ PROPERTIES, INC.
and
THE BANK OF NEW YORK,
as Rights Agent
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
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Article I
DEFINITIONS
Section 1.1 Definitions ........................................... 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights ...................................... 12
Section 2.2 Legend on Common Stock Certificates..................... 12
Section 2.3 Exercise of Rights; Separation of Rights................ 13
Section 2.4 Adjustments to Exercise Price; Number of Rights......... 16
Section 2.5 Date on Which Exercise is Effective..................... 18
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights Certificates..................... 19
Section 2.7 Registration, Registration of Transfer and Exchange..... 20
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates.......................................... 21
Section 2.9 Persons Deemed Owners................................... 23
Section 2.10 Delivery and Cancellation of Certificates............... 23
Section 2.11 Agreement of Rights Holders............................. 24
Section 2.12 Limitations on Exercise or Exchange of Rights........... 25
Section 2.13 Company's Option to Deliver Cash or Securities.......... 26
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in................................................. 26
Section 3.2 Flip-over............................................... 30
Article IV
THE RIGHTS AGENT
Section 4.1 General................................................. 32
Section 4.2 Merger or Consolidation or Change of Name of
Rights Agent.......................................... 33
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Section 4.3 Duties of Rights Agent.................................. 34
Section 4.4 Change of Rights Agent.................................. 37
Article V
MISCELLANEOUS
Section 5.1 Redemption.............................................. 39
Section 5.2 Expiration.............................................. 39
Section 5.3 Issuance of New Rights Certificates..................... 40
Section 5.4 Supplements and Amendments.............................. 41
Section 5.5 Fractional Shares....................................... 41
Section 5.6 Rights of Action........................................ 42
Section 5.7 Holder of Rights Not Deemed a Stockholder............... 42
Section 5.8 Notice of Proposed Actions.............................. 43
Section 5.9 Notices................................................. 43
Section 5.10 Suspension of Exercisability............................ 44
Section 5.11 Costs of Enforcement.................................... 45
Section 5.12 Successors.............................................. 45
Section 5.13 Benefits of this Agreement.............................. 45
Section 5.14 Determination and Actions by the Board of
Directors, etc. ...................................... 46
Section 5.15 Descriptive Headings.................................... 46
Section 5.16 Governing Law........................................... 46
Section 5.17 Counterparts............................................ 47
Section 5.18 Severability............................................ 47
EXHIBITS
Exhibit A Form of Rights Certificate (Together with Form of
Election to Exercise)
Exhibit B Form of Articles Supplementary
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time, this
"Agreement"), dated as of September 10, 1998, between ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation (the "Company"), and The Bank of New York, a New York
banking corporation, as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
September 30, 1998 (the "Record Time"), (b) as provided in Section 2.4,
authorized the issuance of one Right in respect of each share of Common Stock
issued after the Record Time and prior to the Separation Time (as hereinafter
defined) and, to the extent provided in Section 5.3, each share of Common Stock
issued after the Separation Time and (c) authorized the sale of Rights to
▇▇▇▇▇▇▇ Properties, L.P., a California limited partnership (the "Partnership"),
for distribution to the holders of partnership units of the Partnership;
WHEREAS, the Rights associated with partnership units of the Partnership
shall be subject to the Rights Distribution Agreement, dated as of the date
hereof, between the Company and the Partnership, as amended from time to time,
which modifies or supplements the provisions of this Agreement with respect to
such Rights;
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WHEREAS, subject to the terms and conditions hereof, each Right entitles
the holder thereof, after the Separation Time, to purchase securities or assets
of the Company (or, in certain cases, securities of certain other entities)
pursuant to the terms and subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on behalf
of the Company, and the Rights Agent is willing so to act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of 15%
or more of the outstanding shares of Common Stock; provided, however, that the
term "Acquiring Person" shall not include any Person (i) who shall become the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock solely
as a result of an acquisition by the Company of shares of Common Stock, until
such time hereafter or thereafter as any of such Persons shall become the
Beneficial Owner (other than by means of a stock dividend or stock split) of any
additional shares of Common Stock, (ii) who
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becomes the Beneficial Owner of 15% or more of the outstanding shares of Common
Stock but who acquired Beneficial Ownership of shares of Common Stock without
any plan or intention to seek or affect control of the Company, if, upon notice
by the Company, such Person promptly enters into an irrevocable commitment with
the Company to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting, with respect to such shares), sufficient
shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock or (iii) who
Beneficially Owns shares of Common Stock consisting solely of one or more of (A)
shares of Common Stock Beneficially Owned pursuant to the grant or exercise of
an option granted to such Person (an "Option Holder") by the Company in
connection with an agreement to merge with, or acquire, the Company entered into
prior to a Flip-in Date, (B) shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock), Beneficially Owned by
such Option Holder or its Affiliates or Associates at the time of grant of such
option and (C) shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) acquired by Affiliates or
Associates of such Option Holder after the time of such grant which, in the
aggregate, amount to less than 1% of the outstanding shares of Common Stock. In
addition, the Company, any wholly-owned Subsidiary of the Company and any
employee stock ownership or other employee benefit plan of the Company or a
wholly-owned Subsidiary of the Company shall not be an Acquiring Person.
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"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act, as such Rule is in effect on
the date of this Agreement.
"Agreement" shall have the meaning set forth in the preamble.
"Articles" shall mean the Articles of Incorporation of the Company.
"Attribution Rules" shall mean the ownership attribution rules of Section
544 of the Internal Revenue Code of 1986, as amended (the "Code"), as modified
by Section 856(h)(1)(B) of the Code.
A Person shall be deemed the "Beneficial Owner", and to have "Beneficial
Ownership" of, and to "Beneficially Own", any securities as to which such Person
or any of such Person's Affiliates or Associates is or may be deemed to be the
beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the Exchange Act, as
such Rules are in effect on the date of this Agreement, as well as any
securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) 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 accepted
for
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payment or exchange or (ii) solely because such Person or any of such Person's
Affiliates or Associates has or shares the power to vote or direct the voting of
such security pursuant to a revocable proxy given in response to a public proxy
or consent solicitation made to more than ten holders of shares of a class of
stock of the Company registered under Section 12 of the Exchange Act and
pursuant to, and in accordance with, the applicable rules and regulations under
the Exchange Act, except if such power (or the arrangements relating thereto) is
then reportable under Item 6 of Schedule 13D under the Exchange Act (or any
similar provision of a comparable or successor report). Notwithstanding the
foregoing, no officer or director of the Company shall be deemed to Beneficially
Own any securities of any other Person by virtue of any actions such officer or
director takes in such capacity. For purposes of this Agreement, in determining
the percentage of the outstanding shares of Common Stock with respect to which a
Person is the Beneficial Owner, all shares as to which such Person is deemed the
Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in The City of New York are generally authorized or
obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. New York City
time on such date or, if such date is not a Business Day, 5:00 p.m. New York
City time on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, par value $.0001 per
share, of the Company.
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"Company" shall have the meaning set forth in the preamble.
"Constructive Ownership Rules" shall mean the ownership attribution rules
of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code.
"Election to Exercise" shall have the meaning set forth in Section 2.3(d)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Ratio" shall have the meaning set forth in Section 3.1(c) hereof.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $140.00.
"Expansion Factor" shall have the meaning set forth in Section 2.4(a)
hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) the close of business on the tenth anniversary
of the Record Time and (iv) immediately prior to the effective time of a
consolidation, merger or share exchange of the Company (A) into another
corporation or (B) with another corporation in which the Company is the
surviving corporation but Common Stock is converted into cash and/or securities
of another corporation, in either case pursuant to an agreement entered into by
the Company prior to a Stock Acquisition Date.
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"Flip-in Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-in
Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in the case
of a Flip-over Transaction or Event described in clause (i) of the definition
thereof, the Person issuing any securities into which shares of Common Stock are
being converted or exchanged and, if no such securities are being issued, the
other party to such Flip-over Transaction or Event and (ii) in the case of a
Flip-over Transaction or Event referred to in clause (ii) of the definition
thereof, the Person receiving the greatest portion of the (A) assets or (B)
operating income or cash flow being transferred in such Flip-over Transaction or
Event, provided in all cases if such Person is a subsidiary of a corporation,
the parent corporation shall be the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity interest)
with the greatest voting power in respect of the election of directors (or other
persons similarly responsible for direction of the business and affairs) of the
Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-in Date in which, directly or indirectly, (i) the
Company shall consolidate or merge or participate in a share exchange with any
other Person if, at the time of the consolidation, merger or share exchange or
at the time the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring
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Person Controls the Board of Directors of the Company and either (A) any term of
or arrangement concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person is not
identical to the terms and arrangements relating to other holders of the Common
Stock or (B) the Person with whom the transaction or series of transactions
occurs is the Acquiring Person or an Affiliate or Associate of the Acquiring
Person or (ii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more
than 50% of the assets (measured by either book value or fair market value) or
(B) generating more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to two or more such
Persons which are Affiliates or Associates or otherwise acting in concert, if,
at the time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the Acquiring Person
Controls the Board of Directors of the Company. An Acquiring Person shall be
deemed to Control the Company's Board of Directors when, following a Flip-in
Date, the persons who were directors of the Company (or persons nominated and/or
appointed as directors by vote of a majority of such persons) before the Stock
Acquisition Date shall cease to constitute a majority of the Company's Board of
Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately
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preceding such date; provided, however, that if an event of a type analogous to
any of the events described in Section 2.4 hereof shall have caused the closing
prices used to determine the Market Price on any Trading Days during such period
of 20 Trading Days not to be fully comparable with the closing price on such
date, each such closing price so used shall be appropriately adjusted in order
to make it fully comparable with the closing price on such date. The closing
price per share of any securities on any date shall be the last reported sale
price, regular way, or, in case no such sale takes place or is quoted on such
date, the average of the closing bid and asked prices, regular way, for each
share of such securities, 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, Inc. or, if the securities
are not listed or admitted to trading on the New York Stock Exchange, Inc., as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
securities are listed or admitted to trading or, if the securities are not
listed or admitted to trading on any national securities exchange, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date the securities
are not listed or admitted to trading on any national securities exchange or
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 securities
selected by the Board of Directors of the Company; provided, however, that if on
any such date the securities are not listed or admitted to trading on a national
securities exchange or traded in the over-the-
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counter market, the closing price per share of such securities on such date
shall mean the fair value per share of securities on such date as determined in
good faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Option Holder" shall have the meaning set forth in the definition of
Acquiring Person.
"Ownership Limit" shall have the meaning given such term in the Articles.
"Partnership" shall have the meaning set forth in the preamble.
"Person" shall mean any individual, firm, partnership, association, group
(as such term is used in Rule 13d-5 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement), corporation or other
entity.
"Preferred Stock" shall mean the series of Participating Preferred Stock,
par value $.0001 per share, of the Company created by an Articles Supplementary
in substantially the form set forth in Exhibit B hereto appropriately completed.
"Record Time" shall have the meaning set forth in the Recitals.
"Redemption Price" shall mean an amount equal to one cent, $0.01.
"Redemption Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the Preamble.
"Rights Certificate" shall have the meaning set forth in Section 2.3(c)
hereof.
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"Rights Register" shall have the meaning set forth in Section 2.7(a)
hereof.
"Separation Time" shall mean the close of business on the earlier of (i)
the tenth business day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-in Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of Common Stock pursuant thereto, such offer
shall be deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public announcement
by the Company (by any means) or by an Acquiring Person (including by means of
filing a Schedule 13D or Schedule 13G under the Securities Exchange Act of 1934
(or any comparable or successor report or schedule) or an amendment thereto)
that a Person has become an Acquiring Person.
"Subsidiary" of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities or a
majority of the equity interest is Beneficially Owned, directly or indirectly,
by such Person.
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"Trading Day," when used with respect to any securities, shall mean a day
on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time, the
Company will mail a letter summarizing the terms of the Rights to each holder of
record of Common Stock as of the Record Time, at such holder's address as shown
by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common Stock
issued after the Record Time but prior to the Separation Time shall evidence one
Right for each share of Common Stock represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of September
10, 1998 (as such may be amended from time to time, the "Rights
Agreement"), between ▇▇▇▇▇▇▇ Properties, Inc. (the "Company") and The Bank
of New York, as Rights Agent, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of the Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or securities of
another entity, may be exchanged for shares of Common Stock or other
securities or assets of the
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Company, may expire, may not be exercisable or exchangeble, may become void
(if they are "Beneficially Owned" by an "Acquiring Person" or an Affiliate
or Associate thereof, as such terms are defined in the Rights Agreement, or
by any transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The
Company will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge after the
receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
Notwithstanding anything in this Agreement to the contrary, in the event that
prior to the earlier of the Separation Time or the redemption or expiration of
the Rights, any shares of Common Stock are retired and canceled in connection
with the conversion of such shares to Excess Stock pursuant o Articles Ninth of
the Company's Articles of Incorporation, as amended, then the associated Rights
shall be deemed to be similarly retired and canceled.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections 2.12,
2.13, 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, after the Separation Time and prior to
the Expiration Time, to purchase, for the Exercise Price, one one-hundredth of a
share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and (ii) each
Right will be evidenced by the certificate for the associated share of Common
Stock (together, in the case of certificates issued prior to the Record Time,
with the letter mailed to the record holder thereof pursuant to Section 2.1) and
will be transferable only together
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with, and will be transferred by a transfer (whether with or without such
letter) of, such associated share.
(c) Subject to the terms and conditions hereof, after the Separation Time
and prior to the Expiration Time, the Rights (i) may be exercised and (ii) may
be transferred independent of shares of Common Stock. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time (other than any Person whose Rights have become
void pursuant to Section 3.1(b)), at such holder's address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto appropriately
completed, representing the number of Rights held by such holder at the
Separation Time and having 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 national securities
exchange or quotation system on which the Rights may from time to time be listed
or traded, or to conform to usage, and (y) a disclosure statement describing the
Rights.
(d) Subject to the terms and conditions hereof, Rights may be exercised on
any Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an
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Election to Exercise (an "Election to Exercise") substantially in the form
attached to the Rights Certificate duly completed, accompanied by payment in
cash, or by certified or official bank check or money order payable to the order
of the Company, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
shares or depositary receipts (or both) in a name other than that of the holder
of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to the terms
and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of such
certificates, depositary receipts and/or cash, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered (in the
case of certificates or depositary receipts) in such name or names as may be
designated by such holder.
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(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such action
as may be necessary to ensure that all shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Exercise Price), be duly and validly authorized, executed, issued
and delivered and fully paid and nonassessable; (ii) take all such action as may
be necessary to comply with any applicable requirements of the Securities Act of
1933 or the Exchange Act, and the rules and regulations thereunder, and any
other applicable law, rule or regulation, in connection with the issuance of any
shares upon exercise of Rights; and (iii) pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of
the original issuance or delivery of the Rights Certificates or of any shares
issued upon the exercise of Rights, provided, that the Company shall not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for shares in a name other than that of the
holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event the
Company shall at any time after the Record Time and prior to the Separation Time
(i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide
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the outstanding Common Stock or (iii) combine the outstanding Common Stock into
a smaller number of shares of Common Stock, (x) the Exercise Price in effect
after such adjustment will be equal to the Exercise Price in effect immediately
prior to such adjustment divided by the number of shares of Common Stock (the
"Expansion Factor") that a holder of one share of Common Stock immediately prior
to such dividend, subdivision or combination would hold thereafter as a result
thereof and (y) each Right held prior to such adjustment will become that number
of Rights equal to the Expansion Factor, and the adjusted number of Rights will
be deemed to be distributed among the shares of Common Stock with respect to
which the original Rights were associated (if they remain outstanding) and the
shares issued in respect of such dividend, subdivision or combination, so that
each such share of Common Stock will have exactly one Right associated with it.
Each adjustment made pursuant to this paragraph shall be made as of the payment
or effective date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and prior
to the Separation Time issue any shares of Common Stock otherwise than in a
transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the Company in respect
of shares of Common Stock that are issued or sold by the Company after the
Separation Time.
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(b) In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to a
regular periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section 2.4
shall be calculated to the nearest cent. Whenever an adjustment to the Exercise
Price is made pursuant to this Section 2.4, the Company shall (i) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment and (ii) promptly file with the Rights
Agent and with each transfer agent for the Common Stock a copy of such
certificate.
(d) Rights certificates shall represent the securities purchasable under
the terms of this Agreement, including any adjustment or change in the
securities
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purchasable upon exercise of the Rights, even though such certificates may
continue to express the securities purchasable at the time of issuance of the
initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates.
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or one of its Vice Presidents, and
countersigned by its Secretary, an Assistant Secretary, its Treasurer or an
Assistant Treasurer. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
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Promptly after the Company learns of the Separation Time, the Company will
notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for counter-signa-
ture, and, subject to Section 3.1(b), the Rights Agent shall manually
countersign and deliver such Rights Certificates to the holders of the Rights
pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid for any
purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of Section 2.7(c) and (d), the Company will execute, and the
Rights Agent
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will countersign and deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the holder's instructions,
one or more new Rights Certificates evidencing the same aggregate number of
Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Sections 3.1(b), 2.12 and 2.13, all
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register the transfer or exchange
of any Rights after such Rights have become void under Section 3.1(b), been
exchanged under Section 3.1(c) or been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If any
mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration
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Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company shall
execute and the Rights Agent shall countersign and deliver in exchange therefor
a new Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent prior
to the Expiration Time (i) evidence to their satisfaction of the destruction,
loss or theft of any Rights Certificate and (ii) such security or indemnity as
may be required by them to save each of them and any of their agents harmless,
then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the absence of notice to
the Company or the Rights Agent that such Rights Certificate has been acquired
by a bona fide purchaser, the Company shall execute and upon its request the
Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost
or stolen Rights Certificate, a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to
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Sections 3.1(b), 2.12 and 2.13 shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued
hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, including the payment of the
Redemption Price and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the registered
holder of such Rights (or, prior to the Separation Time, the associated shares
of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for
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any Rights Certificates cancelled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the
same consents and agrees with the Company and the Rights Agent and with every
other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void;
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(e) the exercisability and exchangability of the Rights shall be subject
to the restrictions set forth in Sections 2.12 and 2.13 hereof; and
(f) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
2.12 Limitations on Exercise or Exchange of Rights. (a) In no event may a
Right be (i) exercised to purchase shares of Preferred Stock or shares of Common
Stock or (ii) exchanged for Common Stock if such exercise or exchange would
result in (x) any Person's ownership, taking into account both direct ownership
and ownership under the Attribution Rules, of any Preferred Stock or Common
Stock in excess of the Ownership Limit or (y) the ownership, taking into account
both direct ownership and ownership under the Constructive Ownership Rules, by
any Person of Preferred Stock or Common Stock in excess of the Ownership Limit.
(b) As a condition to the exercise or exchange of a Right, the Company may
require the exercising or exchanging person (the "Exchanging Person") to certify
that (i) neither the Exchanging Person nor any other Person who, under the
Attribution Rules, would be treated as owning all or a portion of the shares
directly owned by the Exchanging Person, would own, taking into account both
direct ownership and ownership under the Attribution Rules, any shares of
Preferred Stock or Common Stock in excess of the Ownership Limit as a result of
the exercise of the Right if the Company were to deliver Preferred Stock or
Common Stock in respect of the exercise and (ii) neither the Exchanging Person
nor any other Person who, under the Constructive Ownership Rules,
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would be treated as owning all or a portion of the shares directly owned by the
Exchanging Person, would own, taking into account both direct ownership and
ownership under the Constructive Ownership Rules, any shares of Preferred Stock
or Common Stock in excess of the Ownership Limit as a result of the exercise of
the Right if the Company were to deliver Preferred Stock or Common Stock in
respect of the exercise. In the absence of such a certification the Company
shall be entitled conclusively to deem the limitation of Section 2.12(a) hereof
to apply in respect of the attempted exercise or exchange.
Section 2.13 Company's Option to Deliver Cash or Securities.
Notwithstanding Sections 2.3 and 3.1 hereof, the Company shall, in respect of
(i) any exercise of a Right to purchase shares of Preferred Stock or shares of
Common Stock or (ii) any exchange of Rights for Common Stock, have the option,
in its sole discretion, to deliver in respect of the exercise or to the holder
of the Right being exchanged, as the case may be, cash or debt securities of the
Company deemed by the Board of Directors, in good faith, to be at least
equivalent in value to the Preferred Shares or Common Shares which would
otherwise have been deliverable in connection with such exercise or exchange.
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ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) Subject to Sections 2.12 and 2.13 hereof, in the event
that prior to the Expiration Time a Flip-in Date shall occur, except as provided
in this Section 3.1, each Right shall constitute the right to purchase from the
Company, upon exercise thereof in accordance with the terms hereof (but subject
to Section 5.10), that number of shares of Common Stock having an aggregate
Market Price on the Stock Acquisition Date equal to twice the Exercise Price for
an amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that on or after such Stock Acquisition Date an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
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Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
(c) Subject to Sections 2.12 and 2.13 hereof, the Board of Directors of
the Company may, at its option, at any time after a Flip-in Date and prior to
the time that an Acquiring Person becomes the Beneficial Owner of more than 50%
of the outstanding shares of Common Stock elect to exchange all (but not less
than all) the then outstanding Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 3.1(b) or as to which exchange
is precluded under Section 2.12) for shares of Common Stock at an exchange ratio
of one share of Common Stock per Right, appropriately adjusted in order to
protect the interests of holders of Rights generally in the event that after the
Separation Time an event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the Common Stock (such
exchange ratio, as adjusted from time to time, being hereinafter referred to as
the "Exchange Ratio").
Subject to Sections 2.12 and 2.13 hereof, immediately upon the action of
the Board of Directors of the Company electing to exchange the Rights, without
any further action and without any notice, the right to exercise the Rights will
terminate and each Right (other than Rights that have become void pursuant to
Section 3.1(b)) will
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thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than Rights
that have become void pursuant to Section 3.1(b)) outstanding immediately prior
thereto by mailing such notice in accordance with Section 5.9.
Subject to Sections 2.12 and 2.13 hereof, each Person in whose name any
certificate for shares is issued upon the exchange of Rights pursuant to this
Section 3.1(c) or Section 3.1(d) shall for all purposes be deemed to have become
the holder of record of the shares represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of any applicable taxes and other
governmental charges payable by the holder was made; provided, however, that if
the date of such surrender and payment is a date upon which the stock transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books of the Company are
open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or
(c) to issue shares of Common Stock upon exercise of or in exchange for Rights,
the Company, at its option, may substitute therefor shares of Preferred Stock,
at a ratio of one one-hundredth of a share of Preferred Stock for each share of
Common Stock so issuable.
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(e) In the event that there shall not be sufficient authorized but unissued
shares of Common Stock or Preferred Stock of the Company to permit the exercise
or exchange in full of the Rights in accordance with Section 3.1(a) or (c), and
the Company elects not to, or is otherwise unable to, make the exchange referred
to in Section 3.1(c), the Company shall either (i) call a meeting of
stockholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will take
the action specified in clause (ii) of this sentence) or (ii) take such action
as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the
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Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into
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any agreement with respect to, consummate or permit to occur any Flip-over
Transaction or Event if at the time thereof there are any rights, warrants or
securities outstanding or any other arrangements, agreements or instruments that
would eliminate or otherwise diminish in any material respect the benefits
intended to be afforded by this Rights Agreement to the holders of Rights upon
consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company 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
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
adminis-
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tration of this Agreement in reliance upon any certificate for securities
purchasable upon exercise of Rights, Rights Certificate, certificate 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.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or
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in the name of the successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights 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 will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be
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deemed to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the Board, 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 will be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
authorization, execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any certificate for securities purchasable upon
exercise of Rights or Rights Certificate (except its countersignature thereof);
nor will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any
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adjustment required under the provisions of Section 2.4, 3.1 or 3.2 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 after receipt of the certificate
contemplated by Section 2.4 describing any such adjustment); nor will it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any securities purchasable upon exercise of
Rights or any Rights or as to whether any securities purchasable upon exercise
of Rights will, when issued, be duly and validly authorized, executed, issued
and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person.
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(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in Common Stock, 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 will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged
from its duties under this Agreement upon 90 days' notice (or such lesser notice
as is acceptable to the Company) in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Rights in accordance with Section 5.9. If the Rights Agent
should resign or be removed or
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otherwise become incapable of acting, the Company will appoint a successor to
the Rights Agent. If the Company fails to make such appointment within a period
of 30 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 any Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the holder of
any Rights may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or any state of the United States, in good
standing, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by this Agreement 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. After appointment, the successor Rights Agent will be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will 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 holders of the
Rights. Failure to give any notice provided
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for in this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the close of business on the Flip-in Date, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other securities of the Company deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights (or, if the resolution of the Board of Directors
electing to redeem the Rights states that the redemption will not be effective
until the occurrence of a specified future time or event, upon the occurrence of
such future time or event), without any further action and without any notice,
the right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash or securities,
as determined by the Board of Directors. Promptly after the Rights are redeemed,
the Company shall give notice of such redemption to the Rights Agent and the
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holders of the then outstanding Rights by mailing such notice in accordance with
Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1 hereof, respectively.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock
(including partnership units of the Partnership) or to options, in each case
issued or granted prior to, and outstanding at, the Separation Time, the Company
shall issue to the holders of such shares of Common Stock, Rights Certificates
representing the appropriate number of Rights in connection with the issuance or
sale of such shares of Common Stock; provided, however, in each case, (i) no
such Rights Certificate shall be issued, 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 to the Person to whom
such Rights Certificates would
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be issued, (ii) no such Rights Certificates shall be issued if, and to the
extent that, appropriate adjustment shall have otherwise been made in lieu of
the issuance thereof, and (iii) the Company shall have no obligation to
distribute Rights Certificates to any Acquiring Person or Affiliate or Associate
of an Acquiring Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent may from
time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the close of business on the Flip-in Date, in any
respect and (ii) after the close of business on the Flip-in Date, to make any
changes that the Company may deem necessary or desirable and which shall not
materially adversely affect the interests of the holders of Rights generally or
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto certified by the Company as satisfying the terms
of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights, the
Company shall, in lieu thereof, in the sole discretion of the Board of
Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such
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holder would be entitled as a beneficial owner of such fractional share, or (b)
pay to the registered holder of such Rights the appropriate fraction of the
Market Price per share in cash.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Sections 3.1(b) and 5.14), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights 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.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of any
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate
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be construed to confer upon the holder of any Rights, 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
5.8 hereof), or to receive dividends or subscription rights, or otherwise, until
such Rights shall have been exercised or exchanged in accordance with the
provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
the Separation Time and prior to the Expiration Time (i) to effect or permit a
Flip-over Transaction or Event or (ii) 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 5.9 hereof, a notice of such
proposed action, which shall specify the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date of
the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights to or on
the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
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47
SPIEKER PROPERTIES, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, 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.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with
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48
such laws. If the Company determines that the current or future exercisability
of all or any of the Rights may adversely affect the Company's ability to
qualify as a real estate investment trust for federal income tax purposes (a
"REIT"), the Company may suspend the exercisability of the Rights until such
time as the Company has determined that exercisability of the Rights would not
adversely affect the Company ability to qualify as a REIT. In the event of any
such suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability or exchangeability of the Rights
has been temporarily suspended. Notice thereof pursuant to Section 5.9 shall not
be required.
Failure to give a notice pursuant to the provisions of this Agreement shall
not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company or any
other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 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.
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49
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 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 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. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board 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 to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
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5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF MARYLAND 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; PROVIDED, HOWEVER, THAT THE RIGHTS, OBLIGATIONS AND DUTIES OF THE RIGHTS
AGENT HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
5.17 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.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
▇▇▇▇▇▇▇ PROPERTIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
-48-
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EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- ____ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE,
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY
OF THE FOREGOING WILL BE VOID. THE EXERCISABILITY OR
EXCHANGABILITY OF RIGHTS MAY BE LIMITED AS A RESULT OF THE
OWNERSHIP LIMITATIONS SET FORTH IN THE ARTICLES OF
INCORPORATION OF THE COMPANY.
Rights Certificate
▇▇▇▇▇▇▇ PROPERTIES, INC.
This certifies that ____________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, dated as of September
10, 1998 (as amended from time to time, the "Rights Agreement"), between ▇▇▇▇▇▇▇
Properties, Inc., a Maryland corporation (the "Company"), and The Bank of New
York, a New York banking corporation, as Rights Agent (the "Rights Agent", which
term shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Separation Time (as such term is
defined in the Rights Agreement) and prior to the close of business on September
30, 2008, one one-hundredth of a fully paid share of Participating Preferred
Stock, par value $.0001 per share (the "Preferred Stock"), of the
53
Company (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent in The City of New York. The Exercise Price shall
initially be $140.00 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities of the Company
other than Preferred Stock or assets of the Company, all as provided in the
Rights Agreement.
This Rights 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 Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be
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54
exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by
this Certificate may be (a) redeemed by the Company under certain circumstances,
at its option, at a redemption price of $0.01 per Right or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock or one one-hundredth of a share of Preferred Stock per Right (or, in
certain cases, other securities or assets of the Company), subject in each case
to adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
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55
This Rights 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.
Date: ____________
ATTEST: ▇▇▇▇▇▇▇ PROPERTIES, INC.
___________________________ By______________________________________
Secretary
Countersigned:
THE BANK OF NEW YORK
By___________________________________
Authorized Signature
-4-
56
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _________________________________________________ hereby
(Please print name and address of transferee)
sells, assigns and transfers unto this Rights Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint _______________ Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _______________, ____
Signature Guaranteed: ________________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
57
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee Medallion program), pursuant to SEC Rule
17Ad-15.
-----------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that (i) the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement) and (ii) if shares of Preferred Stock or Common Stock are
issued in respect of this exercise, (x) neither the Person effecting this
exercise (the "Exchanging Person") nor any Person who, under the Attribution
Rules, would be treated as owning all or a portion of the shares directly owned
by the Exchanging Person, will own, as a result of the exercise, own, taking
into account both direct ownership and ownership under the Attribution Rules (as
defined in the Rights Agreement), any shares of Preferred Stock or Common Stock
in excess of the Ownership Limit (as defined in the Rights Agreement) and (y)
neither the Exchanging Person nor any Person who, under the Constructive
Ownership Rules, would be treated as owning all or a portion of the shares
directly owned by the Exchanging Person will own, as a result of the exercise,
taking into account both direct ownership and ownership under the Constructive
Ownership Rules (as defined in the Rights Agreement), any shares of Preferred
Stock or Common Stock in excess of the Ownership Limit (as defined in the Rights
Agreement).
________________________________________
Signature
----------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company (i) will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any
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of the foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable or (ii) may deem the
exercise of the Rights precluded by Section 2.12 of the Rights Agreement.
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[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: ▇▇▇▇▇▇▇ PROPERTIES, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Participating Preferred Stock issuable
upon the exercise of such Rights and requests that certificates for such shares
be issued in the name of:
-----------------------------------
Address:
-----------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
-----------------------------------
Address:
-----------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------------------------
Dated: _______________, ____
Signature Guaranteed: ________________________________________
Signature
(Signature must correspond to name as
written upon the face of the attached
Rights Certificate in every particular,
without alteration or enlargement or any
change whatsoever)
60
Signatures must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee Medallion program), pursuant to SEC Rule
17Ad-15.
------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights
and shares of Common Stock, that the Rights evidenced by the attached Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
----------------------------------------
Signature
------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
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EXHIBIT B
FORM OF ARTICLES SUPPLEMENTARY
OF ▇▇▇▇▇▇▇ PROPERTIES, INC.
▇▇▇▇▇▇▇ Properties, Inc., a Maryland corporation having its principal
office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the
Maryland State Department of Assessments and Taxation that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Corporation by the Charter of the Corporation, the Board
of Directors has duly reclassified 6,500,000 shares of the Common Stock
(par value $.0001 per share) of the Corporation into 6,500,000 shares of a
class designated as Participating Preferred Stock (par value $.0001 per
share) of the Corporation (hereinafter called "this Series") and has
provided for the issuance of such shares.
SECOND: Subject in all cases to the provisions of Article NINTH of the
Charter of the Corporation with respect to Excess Stock, the following is a
description of the preferences and other rights, voting powers,
restrictions, qualifications, terms and conditions of the Participating
Preferred Stock of the Corporation.
(i) The designation of the Participating Preferred Stock
described in Article FIRST hereof shall be "Participating Preferred
Stock (par value $.0001 per share)." Each share of this Series shall
be identical in all respects with the other shares of this Series
except as to the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares in this Series shall initially be
6,500,000, which number may from time to time be increased or
decreased (but not below the number then outstanding) by the Board of
Directors. Shares of this Series purchased by the Corporation shall be
cancelled and shall revert to authorized but unissued shares of
Preferred Stock undesignated as to
62
series. Shares of this Series may be issued in fractional shares,
which fractional shares shall entitle the holder, in proportion to
such holder's fractional share, to all rights of a holder of a whole
share of this Series.
(iii) The holders of full or fractional shares of this Series
shall be entitled to receive, when and as declared by the Board of
Directors, but only out of funds legally available therefor,
dividends, (A) on each date that dividends or other distributions
(other than dividends or distributions payable in Common Stock of the
Corporation) are payable on or in respect of Common Stock comprising
part of the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of dividends
or other distributions (other than dividends or distributions payable
in Common Stock of the Corporation) that would be payable on such date
to a holder of the Reference Package and (B) on the last day of March,
June, September and December in each year, in an amount per whole
share of this Series equal to the excess (if any) of $____* over the
aggregate dividends paid per whole share of this Series during the
three month period ending on such last day. Each such dividend shall
be paid to the holders of record of shares of this Series on the date,
not exceeding sixty days preceding such dividend or distribution
payment date, fixed for the purpose by the Board of Directors in
advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall
be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share
originally issued after a dividend record date and on or prior to the
dividend payment date to which such record date relates shall not be
entitled to receive the dividend payable on such dividend payment
date. or any amount in respect of the period from such original
issuance to such dividend payment date.
The term "Reference Package" shall initially mean 100 shares of
Common Stock, par value $.0001 per share ("Common Stock"), of the
Corporation. In the event the Corporation shall at any time after the
close of business on ________, ____* (A) declare or pay a dividend on
----------
* Insert an amount equal to 1/4 of 1% of the Exercise Price divided by the
number of shares of Preferred Stock purchasable upon exercise of one Right.
** For an articles supplementary relating to shares to be issued pursuant to
Section 2.3 of the Rights Agreement, insert the Separation Time. For an
articles supplementary relating to shares to be issued pursuant to Section
3.1(d) of the
(continued...)
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63
any Common Stock payable in Common Stock, (B) subdivide any Common
Stock or (C) combine any Common Stock into a smaller number of shares,
then and in each such case the Reference Package after such event
shall be the Common Stock that a holder of the Reference Package
immediately prior to such event would hold thereafter as a result
thereof.
Holders of shares of this Series shall not be entitled to
any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends, as herein provided on this
Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock
ranking junior to this Series as to dividends and upon liquidation)
shall be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock or upon any other
stock ranking junior to this Series as to dividends or upon
liquidation, nor shall any Common Stock nor any other stock of the
Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange
for stock of the Corporation ranking junior to this Series as to
dividends and upon liquidation), unless, in each case, the full
cumulative dividends (including the dividend to be due upon payment of
such dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of this Series shall have been,
or shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification
or other transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the
same time be similarly exchanged or changed in an amount per whole
share equal to the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, that a
holder of the Reference Package would be entitled to receive as a
result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the
holders of
----------
** (...continued)
Rights Agreement, insert the Flip-in Date.
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64
full and fractional shares of this Series shall be entitled, before
any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to
this Series upon liquidation, to be paid in full an amount per whole
share of this Series equal to the greater of (A) $__________* or (B)
the aggregate amount distributed or to be distributed prior to such
date in connection with such liquidation, dissolution or winding up to
a holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"), together
with accrued dividends to such distribution or payment date, whether
or not earned or declared. If such payment shall have been made in
full to all holders of shares of this Series, the holders of shares of
this Series as such shall have no right or claim to any of the
remaining assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to the first
paragraph of this Section (v), no such distribution shall be made on
account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this
Series, ratably in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon
such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of assets of the Corporation
available for distribution to its stockholders all amounts to which
such holders are entitled pursuant to the first paragraph of this
Section (v) before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon
liquidation to this Series.
For the purposes of this Section (v), the consolidation or
merger of, or binding share exchange by, the Corporation with any
other corporation shall not be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
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* Insert an amount equal to 100 times the Exercise Price in effect as of the
Separation Time.
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65
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders
required by law or by the Articles of Incorporation, as amended, of
the Corporation, each whole share of this Series shall, on any matter,
vote as a class with any other capital stock comprising part of the
Reference Package and voting on such matter and shall have the number
of votes thereon that a holder of the Reference Package would have.
(viii) In the event any shares of this Series shall be
reacquired, the shares so reacquired shall revert to the status of
authorized but unissued shares of this Series available for future
issuance and reclassification by the Corporation.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ PROPERTIES, INC. has caused those presents to
be signed in its name and on its behalf by its __________________ and witnessed
by its ________________ on __________, ____.
WITNESS: ▇▇▇▇▇▇▇ PROPERTIES, INC.
By:
------------------------------------- -------------------------------------
THE UNDERSIGNED, ______________ of ▇▇▇▇▇▇▇ PROPERTIES, INC., who executed
on behalf of the Corporation the Articles Supplementary of which this
certificate is made apart, hereby acknowledges in the name and on behalf of said
Corporation the foregoing Articles Supplementary to be the corporate act of said
Corporation and hereby certifies that the matters and facts set forth herein
with respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.
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