EXHIBIT 2.1
FIRST TEAM SPORTS, INC.
and
NORWEST BANK MINNESOTA, N.A.
as Rights Agent
Rights Agreement
Dated as of March 15, 1996
RIGHTS AGREEMENT
Agreement, dated as of March 15, 1996, by and between FIRST TEAM
SPORTS, INC., a Minnesota corporation ("the Company"), and NORWEST BANK
MINNESOTA, N.A. (the "Rights Agent").
WITNESSETH:
WHEREAS, on February 28, 1996, the Board of Directors of the Company
(the "Board") authorized the issuance of, and declared a dividend payable in,
one right (a "Right") for each share of Common Stock, $.01, par value per share,
of the Company outstanding as of the close of business on March 25, 1996 (the
"Record Date"), each such Right representing the right to purchase one
one-hundredth (1/100) of a share of Series A Preferred Stock of the Company
("Preferred Stock") authorized by the Board of Directors of the Company (the
"Board") on February 28, 1996, upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, the Board further authorized the issuance of one Right
(subject to adjustment) with respect to each share of Common Stock which may be
issued between the Record Date and the earlier to occur of the Expiration Date
or the Final Expiration Date (as such terms are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of
Voting Stock (as such term is hereinafter defined) of the Company then
outstanding; provided, that, an Acquiring Person shall not include an (i) Exempt
Person (as such term is hereinafter defined), or (ii) any Person, together with
all Affiliates and Associates of such Person, who or which would be an Acquiring
Person solely by reason of (A) being the Beneficial Owner of shares of Voting
Stock of the Company, the Beneficial Ownership of which was acquired by such
Person pursuant to any action or transaction or series of related actions or
transactions approved by a majority of the Continuing Directors of the Board
before such Person otherwise became an Acquiring Person or (B) a reduction in
the number of issued and outstanding shares of Voting Stock of the Company
pursuant to a transaction or a series of related transactions approved by a
majority of the Continuing Directors of the Board; provided, further, that, in
the event that such Person described in this clause (ii) does not become an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii), such
Person nonetheless shall become an Acquiring Person in the event such Person
thereafter acquires Beneficial Ownership of an additional 1% of the Voting Stock
of the Company, unless the acquisition of such additional Voting Stock would not
result in such person becoming an Acquiring Person by reason of subclause (A) or
(B) of this clause (ii). Notwithstanding the foregoing, if the Board determines
in good faith (but only if at the time of such determination by the Board there
are then in office not less than two Continuing Directors and such action is
approved by a majority of the Continuing Directors then in office) that a Person
who would otherwise be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this paragraph (a) has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed an "Acquiring Person" for any purposes of this Rights
Agreement.
(b) "Affiliate" and "Associate" shall have the meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Rights Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates Beneficially Owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Regulations 13D and 13G
thereunder as in effect on the date of this Rights Agreement; or
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, other rights (other than these
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to Beneficially
Own securities tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange or (B)
the right to vote, alone or in concert with others, pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, any securities if the agreement,
arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given in response to a proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (2) is not
then reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report), other than by reference to a
proxy or consent solicitation being conducted by such Person; or
(iii) which are Beneficially Owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), whether or not in writing, for the
purpose of acquiring, holding, and voting (except as described in
clause (B) of subparagraph (ii) of this paragraph (c)) or disposing of
any securities of the Company; provided, however, that for purposes of
determining beneficial ownership of securities under this Rights
Agreement, officers and directors of the Company, solely by reason of
their status as such, shall not constitute a group (notwithstanding
that they may be Associates of one another or may bc deemed to
constitute a group for purposes of Section 13(d) of the Exchange Act)
and shall not be deemed to own shares owned by another officer or
director of the Company.
Notwithstanding anything in this paragraph (c) to the contrary, a
Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any
security Beneficially Owned by another Person solely by reason of an agreement,
arrangement or understanding with such other Person for the purposes of: (i)
soliciting the Company's stockholders for the election of director nominees or
any other stockholder resolution, the formation of and membership on any
committee for the purpose of promoting or opposing any stockholder resolution or
for electing a slate of nominees to the Board, service on such a slate of
nominees, or agreement to serve on a slate of director nominees, provided that
such other Person retains the right at any time to withdraw as a nominee or
member of any such committee, and to withhold or revoke any vote or proxy for or
against any such stockholder resolution or for such slate of nominees; (ii)
entering into revocable voting agreements or the granting or solicitation of
revocable proxies with respect to any of the matters described in the foregoing
clause (i); or (iii) the sharing of expenses and the indemnification against
expenses and liabilities by any such other Person with respect to expenses
incurred or conduct occurring during the time such other Person is a nominee or
a member of any such committee described in the foregoing clause (i). Further,
notwithstanding anything in this paragraph (c) to the contrary, a Person engaged
in the business of underwriting securities shall not be deemed be Beneficial
Owner of, or to Beneficially Own, any securities acquired in good faith in a
firm commitment underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of Minnesota are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Minneapolis time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Minneapolis time, on the next succeeding
Business day.
(f) "Common Stock" when used with reference to the Company shall mean
the common stock, par value $.01 per share of the Company. "Common Stock" when
used with reference to any Person other than the Company which shall be
organized in corporate form shall mean the capital stock or other equity
security with the greatest per share voting power of such Person. "Common Stock"
when used with reference to any Person other than the Company which shall not be
organized in corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and credits of
such Person and which shall be entitled to exercise the greatest voting power
per unit of such Person.
(g) "Continuing Director" shall mean any member of the Board, while
such person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative or nominee of
an Acquiring Person or of any such Affiliate or Associate, and who either (i)
was a member of the Board prior to the time that any Person became an Acquiring
Person (other than pursuant to a Qualifying Tender Offer) or (ii) subsequently
became a member of the Board, and whose nomination for election or election to
the Board was recommended or approved by a majority of the Continuing Directors
then on the Board.
(h) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(i) "Exchange Act" shall have the meaning set forth in Section 1(b)
hereof.
(j) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company or (iii) any employee benefit plan or employee stock plan of the
Company or any Subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for or pursuant to the
terms of any such plan.
(k) "Exercise Price" shall have the meaning set forth in Sections 4 and
7(b) hereof.
(l) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(m) "Fair Market Value" of any security or other property shall mean
the fair market value of such property as determined in accordance with Section
11(b) hereof.
(n) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(o) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(p) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(q) "Preferred Stock" shall mean shares of Series A Preferred Stock,
par value $.01 per share, of the Company, having the rights and preferences set
forth in Exhibit A hereto.
(r) "Qualifying Tender Offer" shall mean a tender or exchange offer for
all outstanding shares of Common Stock of the Company approved by a majority of
the Board (provided that at the time of such approval of the Board there are
then in office not less than two Continuing Directors and such offer is approved
by a majority of the Continuing Directors then in office), after taking into
account the potential long-term value of the Company and all other factors that
they consider relevant.
(s) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(t) "Right Certificate" shall have the meaning set forth in Section
3(d) hereof.
(u) "Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) or such earlier date as a majority of the Continuing Directors
shall become aware of the existence of an Acquiring Person.
(v) "Subsidiary" of a Person shall mean any corporation or other entity
of which securities or other ownership interests having voting power sufficient
to elect a majority of the board of directors or other persons performing
similar functions are Beneficially Owned, directly or indirectly, by such Person
or by any corporation or other entity that is otherwise controlled by such
Person.
(w) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(x) "Trading Day" shall have the meaning set forth in Section 11(b)
hereof.
(y) "Voting Stock" shall mean (i) the Common Stock of the Company and
(ii) any other shares of capital stock of the Company entitled to vote generally
in the election of directors or entitled to vote together with the Common Stock
in respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board for purposes of
applying the definitions contained in this Section 1 shall be made by the Board
in its good faith judgment, which determination shall be binding on the Rights
Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of Rights (who in
accordance with Section 3 hereof, shall, prior to the Distribution Date, also be
the holders of Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from time
to time appoint such Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the tenth Business Day (or such later date as may be determined by
action of the Board, but only if at the time of such determination there are
then in office not less than two Continuing Directors and such action is
approved by a majority of the Continuing Directors then in office, prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would become the
Beneficial Owner of 15% or more of the then outstanding shares of Voting Stock
of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the "Distribution Date"), (i) the Rights shall be evidenced by the
certificates for Common Stock registered in the name of the holders thereof
(together with, in the case of certificates for Common Stock outstanding as of
the Record Date, the Summary of Rights) and not by separate Right certificates
(and the record holders of such certificates for Common Stock shall be the
record holders of the Rights represented thereby), and (ii) the right to receive
Right Certificate shall be transferable only simultaneously and together with
the transfer of a share of Common Stock (subject to adjustment as hereinafter
provided). Until the Distribution Date (or, if earlier, the Expiration Date or
Final Expiration Date), the surrender for transfer of any certificate for Common
Stock shall constitute the surrender for transfer of the Right or Rights
associated with the Common Stock evidenced thereby, whether or not accompanied
by a copy of the Summary of Rights.
(b) On the Record Date, or as soon as practicable thereafter, the
Company shall send a copy of a Summary of Rights to Purchase Shares of Series A
Preferred Stock, in substantially the form of Exhibit B attached hereto (the
"Summary of Rights"), by first class mail, postage prepaid, to each record
holder of the Common Stock as of the close of business on the Record Date, at
the address of such holder shown on the records of the Company.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates for Common Stock issued (including, without limitation,
certificates issued upon original issuance, transfer or exchange of Common
Stock) after the Record Date but prior to the earliest of the Distribution Date,
the Expiration Date, or the Final Expiration Date shall have impressed, printed,
written or stamped thereon or otherwise affixed thereto the following legend:
This certificate also evidences and entitles the holder hereof to the
same number of Rights (subject to adjustment) as the number of shares
of Common Stock represented by this certificate, such Rights being on
the terms provided in the Rights Agreement between FIRST TEAM SPORTS,
INC. and NORWEST BANK MINNESOTA, N.A., dated as of March 15, 1996, as
it may be amended from time to time (the "Rights Agreement"), the
terms of which are incorporated herein by reference and a copy of
which is on file at the principal executive offices of FIRST TEAM
SPORTS, INC. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. FIRST TEAM SPORTS,
INC. shall mail to the registered holder of this certificate a copy of
the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances as provided in Section 7(e) of
the Rights Agreement, Rights issued to or Beneficially Owned by
Acquiring Persons or their Affiliates or Associates (as such terms are
defined in the Rights Agreement) or any subsequent holder of such
Rights shall be null and void and may not be transferred to any
Person.
(d) As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent and the Rights Agent will, if requested, send by
first class mail, postage prepaid, to each record holder of the Common Stock as
of the close of business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a certificate
in the form provided by Section 4 hereof (a "Right Certificate"), evidencing one
Right (subject to adjustment as provided herein) for each share of Common Stock
so held. As of and after the Distribution Date, the Rights shall be evidenced
solely by Right Certificates and may be transferred by the transfer of the Right
Certificate as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.
Section 4. Form of Right Certificates. The Right Certificates and the
forms of election to purchase and assignment to be printed on the reverse
thereof, shall be substantially in the form set forth in Exhibit C hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate, or as may
be required to comply with any applicable law, rule, or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Common
Stock or the Rights may from time to time be listed or conform to usage or
otherwise and as are not inconsistent with the provisions of this Rights
Agreement. Subject to the provisions of Section 22 hereof, the Right
Certificates evidencing Rights whenever issued, (i) shall be dated as of the
date of issuance of the Rights they represent; (ii) shall be subject to
adjustment from time to time as provided herein; and (iii) on their face shall
entitle the holders thereof to purchase such number of shares (including
fractional shares which are integral multiples of one one-hundredth of a share)
of Preferred Stock as shall be set forth therein at the price payable upon
exercise of a Right provided by Section 7(b) hereof as the same may from time to
time be adjusted as provided herein (the "Exercise Price").
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf of the Company
by its Chairman, Vice-Chairman, Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. If any officer of the Company who signed any
Right Certificate ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be signed on
behalf of the Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at an office designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(c), 7(f) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Expiration Date or the Final
Expiration Date, any Right Certificate may be transferred, or split up, combined
or exchanged for one or more other Right Certificates, entitling the registered
holder to purchase a like number of shares of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer any Right Certificate shall
surrender the Right Certificate at the office of the Rights Agent designated for
that purpose with the form of certificate and assignment on the reverse side
thereof duly endorsed (or enclosed with such Right Certificate a written
instrument of transfer in a form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated therefor. Thereupon, the Rights Agent shall countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any transfer tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof,
upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company shall issue and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights: Exercise Price: Expiration Date of
Rights.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Sections 7(e) and 23(a) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed (with signatures duly guaranteed), to the Rights Agent at the principal
office of the Rights Agent in South St. ▇▇▇▇, Minnesota, together with payment
of the Exercise Price with respect to the total number of one one-hundredths
(1/100) of a share (or other securities, cash or other assets, as the case may
be) as to which such surrendered Rights are then exercisable, subject to
adjustment as hereinafter provided, at or prior to the Close of Business on the
earlier of (i) March 14, 2006 (the "Final Expiration Date") or (ii) the date on
which the Rights are redeemed as provided in Section 23 hereof (such earlier
date herein referred to as the "Expiration Date").
(b) The Exercise Price for each one one-hundredth (1/100) of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
Fifty-Five Dollars ($55.00). The Exercise Price and the number of shares of
Preferred Stock or other securities to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate with the form of election to purchase duly executed, accompanied by
payment by certified check, cashier's check, bank draft or money order payable
to the Company or the Rights Agent of the Exercise Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Preferred Stock of the Company one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Company hereby authorizes and directs such transfer agent to comply with all
such requests; (ii) as provided in Section 14(b), at the election of the
Company, cause depository receipts to be issued in lieu of fractional shares of
Preferred Stock; (iii) if the election provided for in the immediately preceding
clause (ii) has not been made, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares in accordance with
Section 14(b) hereof; (iv) after receipt of such Preferred Stock certificates,
and if applicable, depository receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder; and (v) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate; provided, however, that in the
case of a purchase of securities, other than Preferred Stock, pursuant to
Section 13 hereof, the Rights Agent shall promptly take the appropriate actions
corresponding in such case to that referred to in the foregoing clauses (i)
through (v) of this Section 7(c). Notwithstanding the foregoing provisions of
this Section 7(c), the Company may suspend the issuance of shares of Preferred
Stock upon exercise of a Right for a reasonable period, not in excess of ninety
(90) days, during which time the Company seeks to register under the Securities
Act of 1933, as amended (the "Act"), and any applicable securities law of any
other jurisdiction, the shares of Preferred Stock to be issued pursuant to the
Rights; provided, however, that nothing contained in this Section 7(c) shall
relieve the Company of its obligations under Section 9(c) hereof.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the remaining unexercised Rights shall be issued
by the Rights Agent to the registered holder of such Right Certificate or his
assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the first occurrence of an event described in Section
11(a)(ii) herein, any Rights Beneficially Owned by (i) an Acquiring Person, or
any Associate or Affiliate of such Acquiring Person, which the Board, in its
sole discretion, determines is or was involved in or caused or facilitated,
directly or indirectly (including through any change in the Board), such event,
or (ii) a transferee of any such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with such Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has a primary
purpose or effect of avoiding the provisions of this Section 7(e), shall become
null and void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights, whether under
any provision of this Rights Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person as a result of its failure to make any determination with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to Section 3 hereof
that represents Rights Beneficially Owned by an Acquiring Person whose Rights
would be void pursuant to the provisions of this Section 7(e) or any Associate
or Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the provisions of this Section 7(e) or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the provisions of this Section
7(e) shall be cancelled.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate following the form of election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company.
Section 9. Reservation and Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock,
such number of shares of Preferred Stock as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares of Preferred Stock issued
or reserved for issuance in accordance with this Rights Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers'
Automated Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all shares of Preferred Stock delivered upon
the exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price in respect thereof), be
duly and validly authorized and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon exercise of the Rights on an
appropriate form; (ii) cause such registration statement to become effective as
soon as practicable after such filing; and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for Preferred Stock, and (B) the date of the
expiration of the Rights. The Company may temporarily suspend, for a period not
to exceed ninety (90) days, the issuance of shares of Preferred Stock upon
exercise of a Right in order to prepare and file a registration statement under
the Act and permit it to become effective. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or "Blue Sky" laws of the various states in connection with the exercisability
of the Rights. Notwithstanding any provision of this Rights Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained and until
a registration statement under the Act if required, shall have been declared
effective.
(e) The Company covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of certificates for Preferred Stock upon
exercise of Rights in a name other than that of, the registered holder of the
Right Certificate, and the Company shall not be required to issue or deliver a
Right Certificate or certificate for Preferred Stock to a Person other than such
registered holder until any such transfer tax shall have been paid (any such
transfer tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's reasonable
satisfaction that no such transfer tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby, and such certificate shall be dated as of
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable transfer
taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Preferred 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 as of, the next succeeding
Business Day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate, as such, shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price or Number of Shares. The
Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a Right are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Rights Agreement (A) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (B) subdivide or split the
outstanding shares of Common Stock into a greater number of shares or
(C) combine or consolidate the outstanding shares of Common Stock into
a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then and in each such event the
number of shares of Preferred Stock issuable upon the exercise of a
Right after the Record Date for such event (if one shall have been
established or, if not, after the date of such event) shall be the
number of shares of Preferred Stock issuable immediately prior to such
event multiplied by a fraction, the numerator of which is the number
of Rights outstanding immediately after such event, and the
denominator of which is the number of Rights outstanding immediately
prior to such event and the Exercise Price after such event shall be
the Exercise Price in effect immediately prior to such event
multiplied by such fraction. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Sections 23(a) and 24 herein, in the event that any
Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall become an Acquiring Person, except
pursuant to a Qualifying Tender Offer and except as otherwise provided
in this Section 11, each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive upon
exercise of such Right in accordance with the terms of this Rights
Agreement and payment of the Exercise Price, the greater of (A) the
number of one one-hundredths (1/100) of a share of Preferred Stock for
which such Right was exercisable immediately prior to the first
occurrence of the event described in this Section 11(a)(ii) or (B)
such number of one one-hundredths (1/100) of a share of Preferred
Stock based on the per share Fair Market Value of the Preferred Stock
(determined pursuant to Section 11(b) hereof) on the date of such
first occurrence, having a value equal to twice the Exercise Price;
provided, however, that if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to this Section
11(a)(ii). From and after the occurrence of an event described above,
any Rights that are or were acquired or Beneficially Owned by any
Acquiring Person (or any Associate or Affiliate of any Acquiring
Person) shall be void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued pursuant to Section 3
that represents Rights Beneficially Owned by an Acquiring Person whose
rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof, and no Right Certificate shall be
issued pursuant to Section 3 upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof, or to any nominee of
such an Acquiring Person, Associate or Affiliate, and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof shall be cancelled. In the event
that any Person shall become an Acquiring Person and any Rights shall
be outstanding, the Company shall not take any action that would
eliminate or diminish the benefits intended to be afforded by the
Rights.
(iii) In the event that the Company does not have available sufficient
authorized but unissued Preferred Stock to permit the adjustments
required pursuant to the foregoing subparagraph (i) or the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii),
the Company shall take all such action as may be necessary to
authorize and reserve for issuance such number of additional shares of
Preferred Stock as may from time to time be required to be issued upon
the exercise in full of all Rights from time to time outstanding and,
if necessary, shall use its best efforts to obtain stockholder
approval thereof. In lieu of issuing shares of Preferred Stock in
accordance with the foregoing subparagraphs (i) and (ii), the Company
may, subject to approval by a majority of the Continuing Directors of
the Board, if it determines that such action is necessary or
appropriate and not contrary to the interests of holders of the
Rights, elect to issue or pay, upon the exercise of the Rights, cash,
property, or shares of Preferred Stock or Common Stock, or any
combination thereof. Such cash, property, or shares of Preferred Stock
or Common Stock shall have a value equal to the Fair Market Value of
the Preferred Stock. The Fair Market Value of the Preferred Stock
shall be determined pursuant to Section 11(b). Subject to Section 23
hereof, any such election by the Board must be made and publicly
announced within thirty (30) days after the date on which the event
described in Section 11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property on any date shall be determined as provided
in this Section 11(b). In the case of a publicly traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on such stock payable in shares
of Common Stock or securities convertible into shares of Common Stock, or (ii)
effective date of any subdivision, split, combination, consolidation, reverse
stock split or reclassification of such stock, then, and in each such case, the
Fair Market Value shall be appropriately adjusted by the Board to take into
account ex-dividend or post-effective date trading. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way
(in either case, as reported in the applicable transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading; or, if not
listed or admitted to trading on any national securities exchange, the last
quoted price (or, if not so quoted, the average of the high bid and low asked
prices) in the over-the-counter market, as reported by NASDAQ or such other
system then in use; or, if no bids for such security are quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such security selected by the
Board. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading is
open for the transaction of business or, if such security is not listed or
admitted to trading on any national securities exchange, a Business Day. If a
security is not publicly held or not so listed or traded, "Fair Market Value"
shall mean the fair value per share of stock or per other unit of such other
security, as determined by an independent investment banking firm experienced in
the valuation of securities selected in good faith by the Board, or, if no such
investment banking firm is, in the good faith judgment of the Board, available
to make such determination, in good faith by the Board; provided, however, that
for purposes of making the adjustment provided for by Section 11(a)(ii)(B)
hereof, the Fair Market Value of a share of Preferred Stock shall not be less
than 100% of the product of the Fair Market Value of a share of Common Stock
multiplied by the higher of the then Dividend Multiple or Vote Multiple
applicable to the Preferred Stock (as defined in the Certificate of Designation
relating to the Preferred Stock) and shall not exceed 105% of the product of the
then Fair Market Value of a share of Common Stock multiplied by the higher of
the then Dividend Multiple or Vote Multiple applicable to the Preferred Stock.
In the case of property other than securities, the "Fair Market Value" thereof
shall be determined in good faith by the Board based upon such appraisals or
valuation reports of such independent experts as the Board shall in good faith
determine to be appropriate in accordance with good business practices and the
interests of the holders of Rights. Any such determination of Fair Market Value
shall be described in a statement filed with the Rights Agent and shall be
binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-hundredth (1/100) of a share, as the case may be.
(d) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Exercise Price and the number of shares to be issued upon exercise
of the Rights as in the initial Right Certificates issued hereunder but,
nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment reducing
the purchase price per whole share of Preferred Stock upon exercise of the
Rights below the then par value if any of the shares of Preferred Stock, the
Company shall use its best efforts to take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such Preferred Stock
at such adjusted purchase price per share.
(f) Notwithstanding anything in this Section 11 to the contrary, in the
event of any reclassification of stock of the Company or any recapitalization,
reorganization or partial liquidation of the Company or similar transaction, the
Company shall be entitled to make such further adjustments in the number of
shares of Preferred Stock which may be acquired upon exercise of the Rights, and
such adjustments in the Exercise Price therefor, in addition to those
adjustments expressly required by the other paragraphs of this Section 11, as
the Board shall determine to be necessary or appropriate in order for the
holders of the Rights in such event to be treated equitably and in accordance
with the purpose and intent of this Rights Agreement or in order that any such
event shall not, but for such adjustment, in the opinion of counsel to the
Company, result in the stockholders of the Company being subject to any United
States federal income tax liability by reason thereof.
(g) In the event the Company shall at any time after the Record Date
make any distribution on the shares of Common Stock of the Company, whether by
way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Company or otherwise, in cash or
any debt security, debt instrument, real or personal property or any other
property (other than any shares of Common Stock or other capital stock of the
Company and other than any right or warrant to acquire any such shares,
including any debt security convertible into or exchangeable for any such share,
at less than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash dividends declared or
paid on the Common Stock of the Company in the 15-month period immediately
preceding such distribution, then and in each such event, unless such
distribution is part of or is made in connection with a transaction to which
Section 11(a)(ii) or Section 13 hereof applies, the Exercise Price shall be
reduced by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock. For purposes
hereof, the Fair Market Value of any property distributed to the holders of
shares of Common Stock shall be the Fair Market Value of such property as
determined by an independent investment banking firm experienced in the
valuation of securities or the other property so distributed, as the case may
be, selected in good faith by the Board, or, if no such investment banking firm
is in the good faith judgment of the Board available to make such determination,
in good faith by the Board, whose determination shall be final and binding on
the Company, the Rights Agent and the holders of Rights.
Section 12. Certification of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11, 13 or 23(c) of
this Rights Agreement, the Company shall (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts giving rise to
such adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 of this Rights Agreement. Notwithstanding the foregoing sentence, the failure
of the Company, to make such certification or give such notice shall not affect
the validity of or the force or effect of the requirement for such adjustment.
Any adjustment to be made pursuant to Section 11, 13 or 23(c) of this Rights
Agreement shall be effective as of the date of the event giving rise to such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) Except for any transaction approved by the Board (but only if at
the time of such approval by the Board there are then in office not less than
two Continuing Directors and such action is approved by a majority of the
Continuing Directors then in office), in the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than an Exempt Person),
and the Company shall not be the surviving or continuing corporation of such
consolidation or merger, or (y) any Person (other than an Exempt Person) shall
consolidate with, or merge with and into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (other than an Exempt Person) or cash or other
property, or (z) the Company or one or more of its Subsidiaries shall, directly
or indirectly, sell or otherwise transfer to any, other Person or any Affiliate
or Associate of such Person, in one or more transactions, or the Company or one
or more of its Subsidiaries shall sell or otherwise transfer to any Persons in
one or a series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions) then, on the first
occurrence of any such event, proper provision shall be made so that (i) each
holder of record of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Exercise Price in accordance with the terms of this Rights Agreement, such
number of shares of validly issued, fully paid, nonassessable and freely
tradable Common Stock of the Principal Party (as defined herein), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall, based on the Fair Market Value of the Common Stock of the Principal Party
on the date of the consummation of such consolidation, merger, sale or transfer,
equal twice the Exercise Price; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this Rights
Agreement; (iii) the term "Company" for all purposes of this Rights Agreement
shall thereafter be deemed to refer to such Principal Party; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with the
provisions of Section 9 hereof applicable to the reservation of Preferred Stock)
in connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; provided, however, that upon the subsequent occurrence
of any merger, consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Exercise Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had it, at the
time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the occurrence of any event described in clause (x), (y) or
(z) above of this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which shares of Common Stock of the
Company are changed or otherwise exchanged or converted in such merger
or consolidation, or, if there is more than one such issuer, the
issuer of the Common Stock of which has the greatest market value or
(B) if such securities are so issued, (x) the Person that is the other
party to the merger or consolidation and that survives such merger or
consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the greatest market value or (y) if the
Person that is the other party to the merger or consolidation does not
survive the merger or consolidation, the Person that does survive the
merge or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of
the assets or earning power so transferred or if the Person receiving
the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons as is the issuer of Common Stock
having the greatest market value of shares outstanding; provided,
however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-
month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, the term "Principal
Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered, the
term "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest market value of shares
outstanding.
(c) The Company shall not consummate any consolidation, merger or sale
or transfer of assets or earning power referred to in Section 13(a) unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the date of expiration of the
Rights, and similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of the
Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements
for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under
the Exchange Act. In the event that any of the transactions described
in Section 13(a) hereof shall occur at any time after the occurrence
of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable in the
manner described in Section 13(a) hereof.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has any provision in any of its authorized
securities or in its Articles or Certificate of Incorporation or Bylaws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of the consummation of a transaction referred to in this Section 13,
shares of Common Stock of such Principal Party at less than the then Fair Market
Value per share (determined pursuant to Section 11(b) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then Fair Market Value (other than to holders of Rights pursuant
to this Section 13) or (ii) providing for any special tax or similar payment in
connection with the issuance to any holder of a Right of Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights, unless such
fractional Rights result from a transaction referred to in Section 11(a)(i)
hereof. In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
Fair Market Value of the whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one one-hundredth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election, issue
depositary receipts evidencing fractions of shares pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all of the rights, privileges and preferences to which they would be
entitled as owners of the Preferred Stock. With respect to fractional shares
that are not integral multiples of one one-hundredth of a share, if the Company
does not issue such fractional shares or depositary receipts in lieu thereof,
there shall be paid to the holders of record of Right Certificates at the time
such Right Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right expressly waives
his right to receive any fractional Rights or any fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, institute, and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Rights 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 Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other distributions incurred in the administration and execution of this Rights
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
by the Rights Agent in connection with the acceptance and administration of this
Rights Agreement, including the costs and expenses of defending against any
claim of liability relating to the Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, and shall incur no
liability for or in respect of, any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Rights Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Rights Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; in case at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its
changed name; in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be defined to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer, the Secretary or an Assistant
Secretary of the Company and delivered to the Rights Agent. Any such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights Agreement in reliance
upon such certificate.
(c) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof), or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(d) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment in the terms of the
Rights (including the manner, method or amount required under the provisions of
Section 11 or 13 hereof) or for ascertaining the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a certificate furnished
pursuant to Section 12 describing such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
shares of Preferred Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(e) 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 Rights Agreement.
(f) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Treasurer, the
Secretary or an Assistant Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties. The Rights
Agent shall not be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(g) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(h) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon thirty (30) days written notice mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon thirty (30) days written notice, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event will the resignation or removal of a Rights Agent be effective until
a successor Rights Agent has been appointed and has accepted such appointment.
If the Company shall fail to make such appointment within a period of thirty
(30) days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent Rights Agent or
the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or of any state thereof, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination in the conduct of its corporate trust or stock
transfer business by federal or state authorities and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at least
$100,000,000 or (b) an Affiliate controlled by a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file written
notice thereof with the predecessor Rights Agent and each transfer agent of the
Common Stock and Preferred Stock, and mail a written notice thereof to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have assumed the duties
of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Exercise Price per share and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Rights Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option by
majority vote, redeem all but not less than all of the then outstanding Rights,
at any time prior to the Close of Business on the earlier of (i) the tenth day
following the Stock Acquisition Date (subject to extension by the Company as
provided in Section 27 hereof) or (ii) the Final Expiration Date, at a
redemption price of $.01 per Right, subject to adjustments to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof as
provided in subsection (c) below (the "Redemption Price"); provided, however,
that from and after the time that any Person shall become an Acquiring Person
(other than pursuant to a Qualifying Tender Offer), the Company may redeem the
Rights only if at the time of the action of the Board there are then in office
not less than two Continuing Directors and such redemption is approved by a
majority of the Continuing Directors then in office. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder.
(b) Immediately upon the Board's action ordering the redemption of
rights pursuant to paragraph (a) of this Section 23, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after the effective time of the action of
the Board ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent, or prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives such notice. Each notice of redemption will state the method by
which payment of the Redemption Price will be made. At the option of the Board,
the Redemption Price may be paid in cash to each Rights holder or by the
issuance of shares (and, at the Company's election pursuant to Section 14(b)
hereof, cash or depositary receipts in lieu of fractions of shares other than
fractions which are integral multiples of one one-hundredth (1/100) of a share)
of Preferred Stock having a Fair Market Value equal to such cash payment.
(c) In the event the Company shall at any time after the date of this
Rights Agreement (A) pay any dividend on Common Stock in shares of Common Stock,
(B) subdivide or split the outstanding shares of Common Stock into a greater
number of shares or (C) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then, and in each such event, the Redemption
Price shall be adjusted so that the Redemption Price after such event shall
equal the Redemption Price immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event.
Section 24. Exchange.
(a) The Board may, at its option, at any time after any person becomes
an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (excluding Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for shares of Common Stock at an
exchange ratio of one share of Common Stock per right, appropriately adjusted to
reflect any stock split, stock dividend or a similar transaction occurring after
the date hereof (such exchange ratio is hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board shall not be empowered to
affect such exchange at any time after any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of shares of Common Stock aggregating fifty percent (50%) or
more of the shares of Common Stock then outstanding.
(b) Immediately upon the Board's action ordering the exchange of any
Rights pursuant to paragraph (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right of a holder of such rights thereafter shall be to receive
that number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such an exchange.
The Company promptly shall mail a notice of any such exchange to all of the
registered holders of the Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice mailed in accordance herewith
shall be deemed given, whether or not the holder receives the notice. Each
notice of exchange will state the method by which the exchange of the Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each registered
Rights holder.
(c) In the event that there are insufficient shares of Common Stock
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights. In the event the Company shall, after good faith effort,
be unable to take such action to authorize such additional number of shares of
Common Stock, the Company shall substitute, for each share of Common Stock that
would otherwise be issuable upon the exchange of Rights, a number of shares of
Preferred Stock or a fraction thereof so that the Fair Market Value of one share
of Preferred Stock multiplied by such number or fraction is equal to the Fair
Market Value of one share of Common Stock as of the date of issuance of such
shares of Preferred Stock or fraction thereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company shall
pay to the registered holders of the Right certificates, with regard to which
such fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the Fair Market Value of a whole share of
Common Stock. For purposes of this paragraph (d), the Fair Market Value of a
whole share of Common Stock shall be the closing price (as defined in Section
11(b)) of a share of Common Stock for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall propose to
(i) effect any of the transactions referred to in Section 11(a)(i) or 11(g), or
(ii) offer to the holders of record of its Common Stock options, warrants, or
other rights to subscribe for or to purchase shares of Common Stock (including
any security convertible into or exchangeable for Common Stock) or shares of
stock of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) effect any reclassification of
its Preferred Stock or Common Stock or any recapitalization or reorganization of
the Company, or (iv) effect any consolidation or merger with or into, or any
sale or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one or more transactions, of more than fifty
percent (50%) of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons, or (v) effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of record of a Right Certificate, in
accordance with Section 26 hereof, notice of such proposed action, which shall
specify the record date for the purposes of such transaction referred to in
Section 11(a)(i) or such dividend or distribution, or the date on which such
reclassification, recapitalization, reorganization, consolidation, merger, sale
or transfer of assets, liquidation, dissolution, or winding up is to take place
and the record date for determining participation therein by the holders of
record of Common Stock or Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least ten (10) days prior to the Record Date for determining
holders of record of the Preferred Stock for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of record of Common Stock or Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section 11(a)(i),
11(g) or 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to each holder of Rights, in accordance with Section 26
hereof, notice of the proposal of such transaction at least ten (10) days prior
to consummating such transaction. Such notice shall specify the proposed event
and the consequences of the event to holders of Rights under Section 11(a)(i),
11(g) or 13 hereof, as the case may be, and upon consummating such transaction,
shall similarly give notice thereof to each holder of Rights.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on the Company shall be sufficiently given
or made if sent by first class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
FIRST TEAM SPORTS, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of record of any Right Certificate or Right to or on the Rights Agent
shall be sufficiently given or made if sent by first class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
NORWEST BANK MINNESOTA, N.A.
Attention: Shareowner Services
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of record of any Right
Certificate or Right shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments. For as long as the Rights are
then redeemable and except as provided in the last sentence of this Section 27,
the Company may, in its sole and absolute discretion, and the Rights Agent shall
if the Company so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holders of the Rights. At any time when
the Rights are not then redeemable and except as provided in the last sentence
of this Section 27, the Company may, and the Rights Agent shall if the Company
so directs supplement or amend this Rights Agreement without the approval of any
holders of the Right Certificates (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) extend the period in which the Company
may redeem the Rights, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable, provided that
no such supplement or amendment pursuant to this clause shall materially
adversely affect the interest of the holders of the Right Certificates. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price or the
Final Expiration Date, and supplements or amendments may be made after the time
that any Person becomes an Acquiring Person (other than pursuant to a Qualifying
Tender Offer) only if at the time of the action of the Board approving such
supplement or amendment there are then in office not less than two Continuing
Directors and such supplement or amendment is approved by a majority of the
Continuing Directors then in office.
Section 28. Successors. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the holders of Common Stock in their capacity as holders
of the Rights) any legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Minnesota and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 32. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
FIRST TEAM SPORTS, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Its: President and Chief Executive Officer
NORWEST BANK MINNESOTA, N.A.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: Assistant Vice President
Exhibits:
A - Certificate of Designations of Series A Preferred Stock
B - Summary of Rights to Purchase Shares of Series A Preferred Stock
C - Form of Right Certificate