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EXHIBIT 4.1
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RIGHTS AGREEMENT
DATED AS OF DECEMBER 30, 1998
BY AND BETWEEN
FIRST SIERRA FINANCIAL, INC.
AND
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
RIGHTS AGENT
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Section 1. Certain Definitions............................................................. 1
Section 2. Appointment of Rights Agent..................................................... 5
Section 3. Issue of Rights Certificates.................................................... 5
Section 4. Form of Rights Certificates..................................................... 7
Section 5. Countersignature and Registration............................................... 7
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates....................... 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights................... 9
Section 8. Cancellation and Destruction of Rights Certificates............................. 11
Section 9. Reservation and Availability of Preferred Stock................................. 11
Section 10. Preferred Stock Record Date.................................................... 12
Section 11. The Flip-In.................................................................... 13
Section 12. The Flip-Over.................................................................. 14
Section 13. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights......................................................................... 17
Section 14. Fractional Rights and Fractional Shares........................................ 22
Section 15. Rights of Action............................................................... 22
Section 16. Agreement of Rights Holders.................................................... 23
Section 17. Rights Holder Not Deemed a Stockholder......................................... 23
Section 18. Concerning the Rights Agent.................................................... 24
Section 19. Merger or Consolidation or Change of Name of Rights Agent...................... 24
Section 20. Duties of Rights Agent......................................................... 25
Section 21. Change of Rights Agent......................................................... 27
Section 22. Issuance of New Rights Certificates............................................ 28
Section 23. Redemption and Termination..................................................... 28
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Section 24. Exchange....................................................................... 29
Section 25. Notice of Certain Events....................................................... 30
Section 26. Notices........................................................................ 31
Section 27. Supplements and Amendments..................................................... 32
Section 28. Successors..................................................................... 32
Section 29. Benefits of this Agreement..................................................... 32
Section 30. Severability................................................................... 32
Section 31. Governing Law.................................................................. 33
Section 32. Counterparts................................................................... 33
Section 33. Descriptive Headings........................................................... 33
EXHIBIT A -- FORM OF CERTIFICATE OF DESIGNATIONS OF
PREFERRED STOCK
EXHIBIT B -- FORM OF RIGHTS CERTIFICATE
EXHIBIT C -- FORM OF SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
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RIGHTS AGREEMENT
Rights Agreement, dated as of December 30, 1998 (this "AGREEMENT"),
between FIRST SIERRA FINANCIAL, INC., a Delaware corporation (the "COMPANY"),
and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, an Illinois banking corporation (the "RIGHTS
AGENT").
W I T N E S S E T H:
WHEREAS, on December 15, 1998, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as such term is
hereinafter defined) for each outstanding share of common stock, par value $0.01
per share (the "COMMON STOCK"), of the Company outstanding on December 28, 1998
(the "RECORD DATE"), and the issuance of one Right for each share of Common
Stock of the Company issued between the Record Date and the Distribution Date
(as such term is hereinafter defined), each Right entitles the holder thereof to
purchase one one-hundredth of a share of Junior Preferred Stock, Series C of the
Company having the rights, powers and preferences set forth in the form of
Certificate of Designations attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth (the "RIGHTS");
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 have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of the
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the shares of Common Stock then outstanding and shall include all
Affiliates and Associates of the Person, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company or any entity
holding shares of Common Stock organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
(b) "AFFILIATE" shall mean, with respect to a specified Person, a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified.
(c) "ASSOCIATE" shall mean, with respect to a specified Person, (i) any
corporation or organization (other than the Company or a Subsidiary of the
Company) of which the Person is an officer, director or partner or is, directly
or indirectly, the
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beneficial owner of 10% or more of any class of equity security as defined in
Rule 3a-11 of the General Rules and Regulations under the Exchange Act, (ii) any
trust or other estate in which the Person has a substantial beneficial interest
or as to which the Person serves as trustee or in a similar fiduciary capacity,
and (iii) any relative or spouse of the Person, or any relative of the spouse,
who has the same home as the Person, or is an officer or director of any
corporation controlling or controlled by the Person.
(e) "BENEFICIAL OWNERSHIP" shall be determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Securities Exchange Act of 1934 (or
any successor rule or statutory provision) or, if Rule 13d-3 shall be rescinded
and there shall be no successor rule or statutory provision thereto, pursuant to
Rule 13d-3 as in effect on the date hereof; provided, however, that a Person
shall, in any event, also be deemed to be the "Beneficial Owner" of any
securities:
(i) which the Person or any Affiliate or Associate thereof
beneficially owns, directly or indirectly;
(ii) which the Person or any Affiliate or Associate thereof,
directly or indirectly, has the right to acquire (whether the right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer made by
or on behalf of the Person or any Affiliate or Associate thereof until
the tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of the Rights;
(iii) which the Person or any Affiliate or Associate thereof,
directly or indirectly, has sole or shared voting or investment power
with respect thereto 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 security under this subparagraph (iii) as a
result of an agreement, arrangement or understanding to vote the
security if the agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by the Person on
Schedule 13D under the Exchange Act; or
(iv) which are beneficially owned, directly or indirectly, by
any other Person or any Affiliate or Associate thereof with which the
Person or any Affiliate or Associate thereof has any agreement,
arrangement or
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understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (iii) of this paragraph (e)) or disposing of any voting
securities of the Company.
Nothing in this Section 1(d) shall cause a Person engaged in business as
an underwriter to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through the Person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date of
acquisition.
(f) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Illinois are authorized or
obligated by law or executive order to close.
(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Chicago,
Illinois time, on that date; provided, however, that if the date is not a
Business Day it shall mean 5:00 P.M., Chicago, Illinois time, on the next
succeeding Business Day.
(h) "CLOSING PRICE" of any security on any given day shall be the last
sale price, regular way, of the security or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, on the
principal trading market on which the security is then traded.
(i) "COMMON STOCK" shall mean the common stock, par value $0.01 per
share, of the Company, and "common stock" when used with reference to any Person
other than the Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having power to control
or direct the management, of the Person.
(j) "CURRENT MARKET PRICE" of any security on any given date shall be
deemed to be the average of the daily Closing Prices per share or other trading
unit of the security for 10 consecutive Trading Days (as such term is
hereinafter defined) immediately preceding the date; provided, however, that
with respect to shares of capital stock, in the event that the current market
price per share of the capital stock is determined during a period following the
announcement of (i) a dividend or distribution on the capital stock payable in
shares of the capital stock or securities convertible into shares of the capital
stock (other than the Rights), or (ii) any subdivision, combination or
reclassification of the capital stock, and prior to the expiration of the
requisite 10 Trading Day period, as set forth above, after the ex-dividend date
for the dividend or distribution, or the record date for the subdivision,
combination or reclassification, then and in each case, the "Current Market
Price," shall be properly adjusted to take into account ex-dividend trading; and
provided further, that if the security is not publicly held or not so listed or
traded, Current Market Price per share or other trading unit shall mean the fair
value per share or other trading unit as determined in good faith by the
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Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(k) "DISTRIBUTION DATE" shall mean the earliest of (i) the 10th day
after the Stock Acquisition Date (as such term is hereinafter defined) or (ii)
the 10th business day after the date of the commencement of, or first public
announcement of the intent to commence, a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company or any entity holding
shares of Common Stock organized, appointed or established by the Company for or
pursuant to the terms of any such plan), if upon consummation thereof, the
Person would be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding (including any date that is after the date of this
Agreement and prior to issue of the Rights).
(l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all references to any
rule or regulation of the General Rules and Regulations under the Exchange Act
shall be, except as otherwise specifically provided herein, to the rule or
regulation as was in effect on the date of this Agreement.
(m) "EXCHANGE DATE" shall mean the date at which the rights are
exchanges as provided in Section 24 of this Agreement.
(n) "EXPIRATION DATE" shall mean the Close of Business on December 30,
2008 subject to extension as provided in Section 12(c) of this Agreement.
(o) "FLIP-IN EVENT" shall mean any of the events described in Section
11(a) of this Agreement.
(p) "FLIP-OVER EVENT" shall mean any of the events described in Section
12(a) of this Agreement.
(q) "PERSON" shall mean any individual, firm, corporation, partnership
or other entity and shall include any "group" as that term is used in Rule
13d-5(b) under the Exchange Act.
(r) "PURCHASE PRICE" shall mean the price to be paid by the holders of
Rights, upon the exercise thereof, in exchange for shares of Preferred Stock.
The initial Purchase Price shall be U.S. $65.25 per one one-hundredth share of
Preferred Stock, subject to adjustment in accordance with Section 13 of this
Agreement.
(s) "PREFERRED STOCK" shall mean shares of Junior Preferred Stock,
Series C, par value $0.01 per share, of the Company.
(t) "RECORD DATE" shall mean December 28, 1998.
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(u) "REDEMPTION DATE" shall mean the time at which the Rights are
ordered to be redeemed pursuant to Section 23 of this Agreement.
(v) "STOCK ACQUISITION DATE" shall mean the first date of public
announcement by the Company, an Acquiring Person or otherwise, that an Acquiring
Person has become an Acquiring Person.
(w) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation of which a majority of any class of equity security is Beneficially
Owned, directly or indirectly, by the Person.
(x) "TRADING DAY," with respect to any security, shall mean a day on
which the principal national securities exchange on which the security is listed
or admitted to trading is open for the transaction of business or, if the
security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(y) "TRIGGERING EVENT" shall mean a Flip-In Event or a Flip-Over Event.
Any determination required by the definitions contained in this Section
1 shall be made by the Board of Directors of the Company in its good faith
judgment, which determination shall be final and binding on the Rights Agent.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 of this Agreement, shall prior to the Distribution
Date also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts the appointment. The
Company may from time to time appoint whichever co-Rights Agents it may deem
necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company).
(b) As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date, the Rights Agent, at the
expense of the Company, will send by first-class, insured, postage prepaid mail,
to each record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of the holder shown on the records of the
Company, a Rights certificate (the "RIGHTS CERTIFICATE"), evidencing one Right
(as adjusted from time to time prior to the Distribution Date pursuant to this
Agreement) for each share of Common Stock so
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held. As of and after the Distribution Date, the Rights will be evidenced solely
by Rights Certificates.
(c) As soon as practicable after the Record Date, the Company will send
a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit C (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid mail to
each record holder of the Common Stock as of the Close of Business on the Record
Date, at the address of the holder shown on the records of the Company.
(d) Certificates for the Common Stock issued after the Record Date but
prior the earlier of the Distribution Date or the Expiration Date (as such term
is hereinafter defined), shall be deemed also to be certificates for Rights, and
shall bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
TO CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN FIRST
SIERRA FINANCIAL, INC. (THE "COMPANY") AND ▇▇▇▇▇▇ TRUST AND SAVINGS
BANK, DATED AS OF DECEMBER 30, 1998 (THE "RIGHTS AGREEMENT"), THE TERMS
OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, THE RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY
THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS
CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT
OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) BECOME NULL AND VOID AND THE HOLDER OF THOSE RIGHTS
(INCLUDING ANY SUBSEQUENT HOLDER) SHALL NOT HAVE ANY RIGHT TO EXERCISE
THE RIGHTS.
(e) After the Distribution Date but prior to the Expiration Date, Rights
shall only be issued in connection with the issue of Common Stock upon the
exercise of stock options granted prior to the Distribution Date or pursuant to
other benefits under any employee plan or arrangement established prior to the
Distribution Date; provided, however, that if, pursuant to the terms of any
option or other benefit plan, the number of shares issuable thereunder is
adjusted after the Distribution Date, the number of Rights issuable upon
issuance of the shares shall be equal only to the number of shares which would
have been issuable prior to the adjustment.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the form of election to purchase shares
and form of assignment) shall be in substantially the form of Exhibit B and may
contain whatever marks of identification or designation and/or legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed or to conform to usage. Subject to
the provisions of this Agreement, the Rights Certificates, whenever issued,
shall be dated as of the Record Date and on their face shall entitle the holders
thereof to purchase the number of shares of Preferred Stock which shall be set
forth therein at the Purchase Price set forth therein, subject to adjustment as
provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a) of this
Agreement that represents Rights beneficially owned by an Acquiring Person or
that represents any Rights owned on or after the Distribution Date by any Person
who subsequently becomes an Acquiring Person and any Rights Certificate issued
at any time upon the transfer of any Rights to an Acquiring Person thereof or to
any nominee of the Acquiring Person and any Rights Certificate issued pursuant
to Section 6 or Section 13 of this Agreement upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, may contain the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE WERE ISSUED TO
A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON. THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(E) OF THE RIGHTS AGREEMENT.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by the Chairman of its Board of Directors, its President or any Vice President,
either manually or by facsimile signature and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. Each Rights Certificate shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Rights Certificates
shall cease to be an officer of the Company before countersignature by the
Rights Agent and issue and delivery by the Company, the Rights Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the
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person who signed the Rights Certificates had not ceased to be an officer of the
Company; and any Rights Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of the Rights Certificate,
is an officer of the Company, even if on the date of execution of this Rights
Agreement that person was not an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices, books for registration and transfer of the
Rights Certificates issued hereunder. The books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced by each of the Rights Certificates, and the certificate number
and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 14 of this Agreement, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of shares of Preferred Stock (or other securities, cash or other
property, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled the holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make the
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the principal office of the Rights Agent designated for that purpose.
Thereupon, the Rights Agent shall countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Each Right shall entitle (except as otherwise provided in this
Agreement) the registered holder thereof, upon the exercise thereof as provided
in this Agreement, to purchase, for the Purchase Price, at any time after the
Distribution Date and prior to the earlier of the Expiration Date and the
Redemption Date, one one-hundredth share of Preferred Stock, subject to
adjustment from time to time as provided in Section 13 of this Agreement,
payable in lawful money of the United States of America in accordance with
Paragraph (c) below.
(b) Subject to Section 7(e), Section 23(a) and Section 24 of this
Agreement, the registered holder of any Rights Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof including the certificate contained therein
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth share of
Preferred Stock as to which the Rights are exercised prior to the earliest of
the Expiration Date, the Exchange Date and the Redemption Date. The Purchase
Price and the number of shares of Preferred Stock to be acquired upon exercise
of a Right shall be subject to adjustment from time to time as provided in
Section 13 of this Agreement.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase including the certificate
contained therein duly executed, accompanied by payment of the Purchase Price
for the shares (or cash or other assets as the case may be) to be purchased and
an amount equal to any applicable transfer tax in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent shall thereupon
promptly:
(i)(A) requisition from any transfer agent for the Preferred
Stock certificates for the number of one one-hundredths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B)
requisition from the depositary agent depositary receipts representing
the number of one one-hundredths of a share of Preferred Stock as are to
be purchased (in which case certificates for the shares of Preferred
Stock represented by the receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the
depositary agent to comply with the request;
(ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section 14 of
this Agreement;
(iii) after receipt of the certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered
holder of the
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Rights Certificate, registered in whatever name or names may be
designated by the holder; and
(iv) after receipt, deliver the cash, if any, to or upon the
order of the registered holder of the Rights Certificate.
If the Company becomes obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to this Agreement,
the Company shall make all arrangements necessary so that the other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.
(d) If the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of the Rights Certificate or
to his duly authorized assigns, subject to the provisions of Section 6 and
Section 14 of this Agreement.
(e) Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of the earliest of: (x) the date on which the Board of Directors of
the Company decides to exchange the Rights pursuant to Section 24 of this
Agreement, (y) a Triggering Event and (z) the date any Person becomes an
Acquiring Person, any unexercised Rights that are or were (at any time on or
after the earlier to occur of: (1) the Distribution Date and (2) the Stock
Acquisition Date) beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Associate or Affiliate thereof) who becomes a transferee after such
Acquiring Person becomes an Acquiring Person, (iii) a transferee of an Acquiring
Person (or of any Associate or Affiliate thereof) who becomes a transferee prior
to or concurrently with such Acquiring Person becoming an Acquiring Person and
receives the 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 of Directors of the Company has
determined is part of a plan, arrangement or understanding which has, as a
primary purpose or effect, the avoidance of this Section 7(e), shall immediately
become permanently null and void without any further action, and no holder of
the Rights shall have any right whatsoever with respect to the Rights under this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) of this Agreement are
complied with, but shall have no liability to any holder of Rights Certificates
or to any other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(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 of any Rights Certificate upon the occurrence of
any purported
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exercise thereof unless the registered holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for the exercise and
(ii) provided the additional evidence of the identity of the Beneficial Owner
(or former or proposed Beneficial Owner) or Affiliates thereof as the Company
shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or 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 Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificates purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy the cancelled Rights Certificates, and in that case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available at all times out of its authorized and unissued shares of
Preferred Stock or its authorized and issued shares of Preferred Stock held in
its treasury, free from preemptive rights or any right of first refusal, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all Rights from time to time outstanding.
(b) So long as the shares of Preferred Stock issuable upon the exercise
of the Rights may be listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after the time the Rights become
exercisable, all shares reserved for issue to be listed on the exchange upon
official notice of issue when exercised.
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the earlier of the
Distribution Date or as soon as is required by law, a registration
statement under the Securities Act of 1933 (the "ACT"), with respect to
the Preferred Stock purchasable upon exercise of the Rights on an
appropriate form;
(ii) cause the registration statement to become effective as
soon as practicable after the filing; and
(iii) cause the registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the
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earliest of (A) the date as of which Rights are no longer exercisable
for the securities, (B) the Expiration Date and (C) the Redemption Date.
The Company will also take all action necessary to ensure compliance
with the securities or "blue sky" laws of the various states in connection with
the Exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the Exercisability of the Rights
in order to prepare and file the registration statements and permit them to
become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in that jurisdiction shall have been obtained and, if
applicable, until a registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all action as may
be necessary to ensure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for the
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued, fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates and
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 Rights Certificates to a Person other
than, the issuance or delivery of the shares of Preferred Stock, in respect of a
name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or the issuance or delivery of any
certificates for shares of Preferred Stock in a name other than that of, the
registered holder, upon the exercise of any Rights, until the tax shall have
been paid (any such tax being payable by the holder of the Rights Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no 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
shares of Preferred Stock represented thereby on, and the certificate shall be
dated, the date upon which the Rights Certificate evidencing the Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of surrender and payment is
a date upon which the Preferred Stock transfer books of the Company are closed,
the Person shall be deemed to have become the record holder of the shares on,
and the certificate shall be dated, the next
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succeeding Business Day on which the Preferred Stock transfer books of the
Company are open.
Section 11. The Flip-In. (a) If:
(i) any Acquiring Person, directly or indirectly, shall merge
into the Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of the merger or
combination and the Common Stock of the Company shall remain outstanding
and unchanged; or
(ii) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any entity organized, appointed or established
pursuant to the terms of such plan) shall become the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding; or
(iii) during the time when there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock
split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions (whether or not with or into or
otherwise involving an Acquiring Person) which has the effect, directly
or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company
or any of its Subsidiaries which is directly or indirectly owned by any
Acquiring Person; or
(iv) any Acquiring Person, directly or indirectly, shall receive
management fees or other compensation from the Company or any of its
Subsidiaries other than compensation for full-time employment as a
regular employee or directors' fees on the same basis as the other
directors of the Company or any of its Subsidiaries, or receive the
benefit of guarantees or other financial assistance or tax credits or
other tax advantages from the Company or any of its Subsidiaries;
then, and in each case, subject to the provisions of Section 24 of this
Agreement, each holder of a Right, except as provided below and in Section 7(e)
of this Agreement, shall thereafter have a right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of shares of Preferred Stock, the number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-hundredths of a share
of Preferred Stock for which a Right is then exercisable and dividing that
product by (y) 50% of the Current Market Price per share of the Common Stock on
the date on which the first of the events listed above in this
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subparagraph (a) occurs (such number of shares hereinafter the "ADJUSTMENT
SHARES").
(b) In the event that there shall not be sufficient issued but not
outstanding, and authorized but unissued, shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(a), the Company shall take all action as may be necessary to authorize
additional shares of Common Stock for issue upon exercise of the Rights;
provided, however, that if the Company is unable to cause the authorization of a
sufficient number of additional shares of Common Stock, then, in the event the
Rights become so exercisable, the Company, with respect to each Right and to the
extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which the Company is a party, shall,
upon the exercise of the Rights,
(i) pay an amount in cash equal to the excess of (A) the product
of (1) the number of Adjustment Shares, multiplied by (2) the Current
Market Price of the Common Stock (hereinafter the "CURRENT VALUE"), over
(B) the Purchase Price, in lieu of issuing shares of Common Stock and
requiring payment therefor, or
(ii) issue debt or equity securities, or a combination thereof,
haying a value equal to the Current Value, where the value of the
securities shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors of the Company, and
require the payment of the Purchase Price, or
(iii) deliver any combination of cash, property, Common Stock
and/or other securities having the requisite value, and require payment
of all or any requisite portion of the Purchase Price.
If the Company determines that some action need be taken pursuant to
clauses (i), (ii), or (iii) of the proviso of this Section 11(b), a majority of
the Board of Directors may suspend the exercisability of the Rights for a period
of up to 45 days following the date on which the first of the events listed in
Section 11(a)(i), (ii) or (iii) of this Agreement shall have occurred, in order
to decide the appropriate form of distribution to be made pursuant to the above
proviso and to determine the value thereof. In the event of any suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at the
time the suspension is no longer in effect.
Section 12. The Flip-Over.
(a) If, following the Distribution Date, directly or indirectly,
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(w) the Company shall consolidate with, or merge with and into,
any other Person; or
(x) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or
surviving corporation of the merger and, in connection with the merger,
all or part of the shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or
any other property; or
(y) the Company shall effect a share exchange in which all or
part of the Common Stock of the Company shall be exchanged into
(including, without limitation, any conversion into or exchange for)
securities of any other Person, cash or any other property; or
(z) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one transaction
or a series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons,
then, and in each case, subject to the provisions of Section 24 of this
Agreement,
(i) each holder of a Right, except as provided in Section 7(e)
of this Agreement, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, the number of shares of freely tradable
common stock of the Principal Party, free and clear of any lien,
encumbrance or other adverse claim, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable (or the number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately
prior to the occurrence of the Flip-In Event if a Flip-In Event has
previously occurred) and dividing that product by (2) 50% of the Current
Market Price per share of the common stock of the Principal Party on the
date of consummation of the Flip-over Event;
(ii) all common stock of any Person for which any Right may be
exercised after consummation of a business combination as provided in
this Section 12(a) shall, when issued upon exercise thereof in
accordance with this Agreement, be duly and validly authorized and
issued and fully paid and nonassessable;
(iii) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of the Flip-Over Event, all the obligations and
duties of the Company pursuant to this Agreement;
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(iv) the term "Company" shall thereafter be deemed to refer to
the Principal Party, it being specifically intended that the provisions
of Section 13 hereof shall apply to the Principal Party;
(v) the Principal Party shall take whatever steps (including,
but not limited to, the reservation of a sufficient number of shares of
its common stock) in connection with the 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; and
(vi) the provisions of Section 11 of this Agreement shall be of
no effect following the first occurrence of any Flip-Over Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in (w), (x) or (y)
of the first sentence of Section 12(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in the merger or consolidation, and if no securities are so
issued, the Person that is the other party to the merger or
consolidation; and
(ii) in the case of any transaction described in (z) of the
first sentence in Section 12(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant
to the transaction or transactions; provided, however, that in any case,
(1) if the common stock of the Person is not at such time and has not
been continuously over the preceding 12-month period registered under
Section 12 of the Securities Exchange Act of 1934, as then in effect,
and the Person is a direct or indirect Subsidiary of another Person the
common stock of which is and has been so registered, "Principal Party"
shall refer to the other Person; and (2) in case the Person is a
Subsidiary, directly or indirectly, of more than one Person, the common
stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of the Persons is the issuer
of the common stock having the greatest aggregate market value.
(c) The Company shall not consummate any Flip-over Event unless prior
thereto the Company and each Principal Party and each other Person who may
become a Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 12 and further providing that, as soon as practicable after
the date of any Flip-Over Event, the Principal Party will:
(i) prepare and file at its own expense a registration statement
under the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, will use its best
efforts to cause the
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registration statement to become effective as soon as practicable after
the filing and will use its best efforts to cause the registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the earliest of the Expiration Date,
the Exchange Date and the Redemption Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
The Principal Party shall temporarily suspend, for a period of time not
to exceed 90 days following the occurrence of a Flip-Over Event, the
exercisability of the Rights in order to prepare an file the registration
statement referred to in clause (i) above, and the Expiration Date shall be
extended by the number of days of the suspension. The provisions of this Section
12 shall similarly apply to successive Flip-Over Events. In the event that a
Flip-Over Event shall occur at any time after the occurrence of a Flip-In Event,
the Rights that have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 12(a).
Section 13. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 13.
(a) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend or make a distribution on the Preferred Stock
payable in shares of Preferred Stock into a larger number of shares, (B)
subdivide the outstanding Preferred Stock into a larger number of shares, (C)
combine the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), then in
each event, except as otherwise provided in this Section 13(a), the Purchase
Price in effect at the time of the record date for the dividend or distribution,
or of the effective date of the subdivision, combination or reclassification,
and the number and kind of shares of Preferred Stock or capital stock issuable
on that date, shall be proportionately adjusted so that the holder of any Rights
(except as provided in Section 7(e) of this Agreement) exercised on or after
that time shall be entitled to receive upon payment of the Purchase Price in
effect immediately prior to that date, the aggregate number and kind of shares
of Preferred Stock or capital stock which, if the Rights had been exercised
immediately prior to that date and at a time when the Preferred Stock transfer
books of the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of the dividend, distribution, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both Section 11(a) of this Agreement and this Section 13(a),
the adjustment provided for in this Section 13(a) shall be in addition to, and
shall be made prior to any adjustment required pursuant to Section 11(a).
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(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
the record date) Preferred Stock (or shares having the same rights, privileges
and preferences as the shares of Preferred Stock ("EQUIVALENT PREFERRED STOCK")
or securities convertible into Preferred Stock or Equivalent Preferred Stock at
a price per share of Preferred Stock or per share of Equivalent Preferred Stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) of less than the Current Market
Price per share of Preferred Stock on the record date, the Purchase Price to be
in effect after the record date shall be determined by multiplying the Purchase
Price in effect immediately prior to the record date by a fraction, the
numerator of which shall be the number of one one-hundredths of shares of
Preferred Stock outstanding on the record date, plus the number of one
one-hundredths of shares of Preferred Stock which the aggregate offering price
of the total number of shares of one one-hundredths of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at the current market price and the denominator of which shall be the number of
one one-hundredths of shares of Preferred Stock outstanding on the record date,
plus the number of additional one one-hundredths of shares of Preferred Stock
and/or Equivalent Preferred Stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In case the subscription price is paid in a form of consideration
all or part of which is in a form other than cash, the value of the
consideration shall be determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent. Shares of Preferred Stock
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. The adjustment shall be made
successively whenever a record date is fixed; and in the event that rights or
warrants are not issued following an adjustment, the Purchase Price shall be
adjusted to be the Purchase Price that would have been in effect if the record
date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 13(b)),
the Purchase Price to be in effect after the record date shall be determined by
multiplying the Purchase Price in effect immediately prior to the record date by
a fraction, the numerator of which shall be the Current Market Price per one
one-hundredth of a share of the Preferred Stock on the record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of the subscription rights or warrants applicable to one
one-hundredth of a share of
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Preferred Stock and the denominator of which shall be the current market price
per one one-hundredth of a share of the Preferred Stock. The adjustments shall
be made successively whenever a record date is fixed; and in the event that a
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price that would be in effect if the record date had not been
fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless the adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 13(d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 13 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share
of one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 13(d), any adjustment
required by this Section 13 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the earliest of the Expiration Date, the Exchange Date and the Redemption Date.
(e) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Rights thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Stock, thereafter
the number of the other shares so receivable upon exercise of any Rights shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in Section 13(a) through (c), inclusive, and the provisions of Section 7, 9, 10,
12 and 14 hereof with respect to the Preferred Stock shall apply on like terms
to any other shares.
(f) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Preferred
Stock purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(g) Unless the Company shall have exercised its election as provided in
Section 13(h), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 13(b) and (c), each Rights outstanding immediately
prior to the making of the adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to the adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after adjustment
of the Purchase Price.
(h) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the
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number of shares of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the
adjustment. Each Right held of record prior to the adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one-millionth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 13(h), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on the record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which the holders shall be-entitled
as a result of the adjustment, or, at the option of the Company, shall cause to
be distributed to the holders of record in substitution and replacement for the
Rights Certificates held by the holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which the holders shall be entitled after the
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value of the shares of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred Stock
at the adjusted Purchase Price.
(k) In any case in which this Section 13 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Rights exercised after the record date,
the shares of Preferred Stock and other capital stock or securities of the
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Company, if any, issuable upon the exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon the exercise on the basis of the Purchase Price in effect prior to
the adjustment; provided, however, that the Company shall deliver to the holder
a due ▇▇▇▇ or other appropriate instrument evidencing the holder's right to
receive the additional shares upon the occurrence of the event requiring the
adjustment.
(l) Anything in this Section 13 to the contrary notwithstanding, the
Company shall be entitled to make reductions in the Purchase Price, in addition
to those adjustments expressly required by this Section 13, as and to the extent
that in its sole discretion the Company shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance
wholly for cash of any shares of Preferred Stock at less than the Current Market
Price, (iii) issuance wholly for cash of shares of Preferred Stock or securities
which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options or
warrants referred to in this Section 13, hereafter made by the Company to
holders of its Preferred Stock shall, if practicable, not be taxable to the
stockholders.
(m) The Company covenants and agrees that it shall not (i) consolidate
with, (ii) merge with or into, or (iii) sell or transfer to, in one or more
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, any other
Person if at the time of or immediately after the consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(n) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
any action the purpose or effect of which is to diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time prior to the Distribution Date (i)
declare a dividend or distribution on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to the event by a
fraction, (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and
(2) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of the event.
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(p) Whenever an adjustment is made as provided in Sections 11, 12 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth the
adjustment and a brief statement of the facts accounting for the adjustment, (b)
promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of the Certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be
obligated or responsible for calculating any such adjustment nor shall it be
deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional Rights or to
distribute Rights Certificates that evidence fractional Rights. In lieu of
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which the fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Current Market
Price of a whole Right as of the date on which the fractional Rights would have
been otherwise issuable.
(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 of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates, at the
time the Rights are exercised as herein provided, an amount in cash equal to the
same fraction of the Current Market Price of one one-hundredth of a share of
Preferred Stock as of the date of the exercise.
(c) The holder of a Right by his acceptance thereof expressly waives any
right to receive any fractional Rights or any fractional shares upon exercise of
a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights 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 Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his nights
pursuant to this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach of
this Agreement and shall be entitled to specific performance of the obligations
hereunder and injunctive
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26
relief against actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal corporate trust office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name a Rights 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 Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of the obligation;
provided, however, the Company must use its best efforts to have any order,
decree or ruling lifted or otherwise overturned.
Section 17. Rights Holder Not Deemed a Stockholder. Except as otherwise
expressly provided in this Agreement, no holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares 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 Rights
Certificate be construed to confer upon the holder of any Rights 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, or to
receive dividends or subscription rights, or otherwise, until and only to the
extent that the Right or Rights evidenced by the Rights Certificate shall have
been exercised in accordance with the provisions of this Agreement.
-23-
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Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises. The indemnification provided for hereunder shall survive the
expiration of the Rights and the termination of this Agreement.
The Rights Agent may conclusively rely upon and shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that the corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 of this Agreement. In case at
the time the successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver the Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign the Rights
Certificates either in the name of the predecessor or in the name of the
successor
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28
Rights Agent; and in all cases the Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
that time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign the Rights Certificates either in its prior name or in its
changed name; and in all cases the Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the Rights
Agent may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of the 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 the opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking or suffering any action hereunder,
the fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and the
certificate shall be full authorization to the Rights Agent, for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon the certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of facts or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on the Rights Certificates), but all statements and recitals
are and shall be deemed to have been made by the Company only.
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29
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Sections 11
or 13 of this Agreement or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any 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 Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to the officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any officer. Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent under this Agreement and the date on or
after which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than ten business days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application subject to the proposed
action or omission and/or specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing
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herein shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any attorneys or
agents or for any loss to the Company resulting from any act, default, neglect
or misconduct provided reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) The Rights Agent shall not be required to take notice or be deemed
to have notice of any fact event or determination under the Rights Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.
(l) If, with respect to any rights certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and, at the expense of the Company, to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the registered holder of any Rights
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
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be a corporation organized and doing business under the laws of the United
States or of the State of Illinois (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of Illinois), in good standing, having a principal
office in the state of Illinois, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $100,000,000. 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 notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provision of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to 5:00 P.M., Chicago, Illinois time, on the earlier of (i) the 10th
day following the Stock Acquisition Date, subject to extension by the Board of
Directors for a period of time up to, but not exceeding, 10 additional days, and
(ii) the Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "REDEMPTION PRICE"). The Company may, at its option, pay such
redemption price in cash, shares of Common Stock (based on the market price of
the Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors of the Company. Notwithstanding
anything in this Agreement to the contrary, no Rights may be exercised at any
time that the Rights are subject to redemption in accordance with the terms of
this Agreement.
(b) Immediately upon the action of the Board of Directors of the Company
extending the redemption period pursuant to Section 23(a)(i), evidence of which
shall
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have been filed with the Rights Agent, the Company shall issue a press release
indicating the date to which the Board of Directors has extended its right to
redeem the Rights.
(c) Notwithstanding anything in this Agreement to the contrary, no
redemption of the Rights shall be permitted after 5:00 P.M., Chicago, Illinois
time, on the earlier of (i) the 10th day following the Stock Acquisition Date,
subject to extension by the Board of Directors for a period of time up to, but
not exceeding, 10 additional days, or (ii) the Expiration Date.
(d) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, evidence of which shall have been filed
with the Rights Agent and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. Within 10 days after
the action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as 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 mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. In any case, failure to give such notice to any particular holder
of Rights shall not affect the sufficiency of the notice to other holders of
Rights. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time, in any manner, other than
that specifically set forth in this Section 23, and neither the Company nor any
of its Affiliates or Associates may acquire or purchase for value any Rights at
any time, in any manner, other than in connection with the purchase of shares of
associated Common Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Company may, at its option but subject to receipt of any
required regulatory approvals, by action of the Board of Directors, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights owned by the
Acquiring Person or that otherwise have become void pursuant to Section 7(e)
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 similar transaction occurring after the date hereof (such exchange
ratio being herein referred to as the "EXCHANGE RATIO").
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall
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terminate and the only right thereafter of a holder of such Rights 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
exchange. The Company promptly shall mail a notice of any exchange to all
holders of such Rights at their last addresses as they appear upon the registry
books of Rights Agent. Any notice that is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the 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 which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred (or Equivalent Preferred Stock, for shares of
Common Stock exchangeable for Rights, at the initial rate of one one-hundredth
of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in the voting
rights of the Preferred Stock pursuant to the terms thereof, so that the
fraction of a share of Preferred Stock delivered in lieu of each share of Common
Stock shall have at least the same voting rights as one share of Common Stock.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates that evidence fractional Common
Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the Current Market Value of a whole share of Common Stock.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly
cash dividend), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any Flip-Over Event, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, in accordance
with Section 26, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, Flip-Over Event,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if
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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 20 days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) Upon the occurrence of a Flip-In Event or a Flip-Over Event, the
Company or Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26, a notice of the occurrence of such event and
the consequences thereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
First Sierra Financial, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
With copy to: ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if delivered by registered or certified mail and shall be deemed given upon
receipt thereof, addressed (until another address is filed in writing with the
Company) as follows:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company. The Company shall deliver a copy of any notice or demand
it delivers to the holder of any Rights Certificate to the Rights Agent and the
Rights Agent shall deliver a copy of any notice or demand it deliver to the
holder of any Rights Certificate to the Company.
Section 27. Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates other than an Acquiring Person; provided, however, that no
amendment or supplement may be made if the effect would be to extend or shorten
the redemption period after the Stock Acquisition Date or change the Purchase
Price or the Redemption Price. Notwithstanding any other provisions of this
Section 27, the Board of Directors shall retain the right to amend the Purchase
Price for a period of six months from the date of this Agreement.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent hereunder will
be effective against the Rights Agent without the execution of such supplement
or amendment by the Rights Agent.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
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Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: FIRST SIERRA FINANCIAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: President
Attest: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ------------------------------
Name: Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Title: Vice President
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Exhibit A
to
Rights Agreement
[FORM OF]
CERTIFICATE OF DESIGNATIONS
OF PREFERRED STOCK
of
FIRST SIERRA FINANCIAL, INC.
We, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board of Directors, and ▇▇▇▇▇ ▇▇,
Secretary, of First Sierra Financial, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
in accordance with the provisions of Section 151(g) thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation, the Board of Directors on December 15, 1998,
adopted, ratified and approved this Certificate of Designations and the series
of preferred stock designated herein.
Section 1. Designation and Amount. The shares of the series of preferred
stock shall be designated as "Junior Preferred Stock, Series C" (the "Preferred
Stock") and the number of shares constituting the series shall be 300,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of preferred stock ranking prior and superior
to the shares of Preferred Stock with respect to dividends, the holders
of shares of Preferred Stock, in preference to the holders of common
stock, $.01 par value per share, of the Corporation (the "Common Stock")
and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the 15th day of
March, June, September and December in each year (each such date being a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of
a share of Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100
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times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first
issue of any share or fraction of a share of Preferred Stock. In the
event the Corporation shall at any time on or after December 28, 1998,
declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on
the Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $100 per share on the Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders
of shares of Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Preferred Stock in an
amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
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Section 3. Voting Rights. The holders of shares of Preferred Stock shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time on or after
December 28, 1998, declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, holders of Preferred Stock shall
have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Preferred Stock, except dividends paid ratably on the
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
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(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) to
the Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration any
shares of Preferred Stock, or any shares of stock ranking on a
parity with the Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of preferred stock and
may be reissued as part of a new series of preferred stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Preferred Stock unless, prior
thereto, the holders of shares of Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, provided that the
holders of shares of Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of Common Stock, or (2) to the holders of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Preferred
Stock, except distributions made ratably on the Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time on or after December 28, 1998,
declare or pay any
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dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In the event that case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash or other property, then in any such case
the shares of Preferred Stock then outstanding shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash or other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is changed or exchanged. In
the event the Corporation shall at any time on or after December 28, 1998,
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Preferred Stock shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Preferred Stock shall not be
redeemable.
Section 9. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of two-thirds
or more of the outstanding shares of Preferred Stock, voting together as a
single class.
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IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury as of this _____
day of December, 1998.
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chairman of the Board of Directors
ATTEST:
-------------------------------
▇▇▇▇▇ ▇. ▇▇, Secretary
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Exhibit B
to
Rights Agreement
[FORM OF]
RIGHTS CERTIFICATE
Certificate No. R- _______________ Rights
NOT EXERCISABLE AFTER DECEMBER 30, 2008 OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
[THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECAME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF THE RIGHTS AGREEMENT.]
RIGHTS CERTIFICATE
FIRST SIERRA FINANCIAL, INC.
This certifies that _____________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of December 30, 1998 (the "RIGHTS AGREEMENT") between First
Sierra Financial, Inc., a Delaware corporation (the "COMPANY"), and ▇▇▇▇▇▇ Trust
and Savings Bank, an Illinois banking corporation (the "RIGHTS AGENT"), unless
notice of redemption shall have been previously given by the Company, to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. (Chicago, Illinois
time) on December 30, 2008 at the principal corporate trust office of the Rights
Agent, or at the office of its successor as Rights Agent, one one-hundredth of a
fully paid nonassessable share of the Junior Preferred Stock, Series C (the
"PREFERRED STOCK"), par value $0.01 per share, of the Company, at a purchase
price of $65.25 per one one-hundredth share upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase duly executed. The
Purchase Price may be paid in cash or by certified bank check or money order
payable to the order of the Company.
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The number of Rights evidenced by this Rights Certificate (and the
number of shares of Preferred Stock which may be purchased upon exercise
thereof) and the Purchase Price set forth above have been determined as of
December 28, 1998, based on the Common Stock of the Company as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock or other securities, cash or other property
which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
If the Rights evidenced by this Rights Certificate are or were formerly
beneficially owned, on or after the earlier of the Distribution Date and the
Stock Acquisition Date, by an Acquiring Person or an Affiliate, Associate or
direct or indirect transferee of an Acquiring Person, such Rights may become
null and void and the holder of any such Right (including any subsequent holder)
shall not have any right with respect to such Right.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
Capitalized terms used in this Rights Certificate have the same meanings as such
terms are defined in the Rights Agreement. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the above-mentioned
office of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal corporate trust office of the Rights Agent, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Preferred Stock or other property as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier of (i) the close of
business on the 10th day following the time it becomes public that an Acquiring
Person has become such (with the possibility of an extension for an additional
10 days) and (ii) the Expiration Date.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be exchanged by the Company, at its option, at any time
after
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any person becomes an Acquiring Person, for a number of shares of common stock
of the Company determined in accordance with the Rights Agreement.
No fractional shares of Preferred Stock (other than fractions that are
integral multiples of one one-hundredth of share of Preferred Stock, which may,
at the election of the Company, be evidenced by depository receipts) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
but in lieu thereof the Company may elect to make a cash payment, as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or to receive dividends or shall be deemed, for any purpose, the holder of
Preferred Stock or of any other securities, cash or property which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or this Certificate be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company, including,
without limitation, any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or to institute, as a holder of
Preferred Stock or other securities issuable on the exercise of the Rights
represented by this Certificate, any derivative action, or otherwise, until and
only to the extent the Right or Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until the Rights Agent shall have countersigned it.
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WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of December 30, 1998.
FIRST SIERRA FINANCIAL, INC.
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and
Chairman of Board of Directors
ATTEST:
-------------------------------
▇▇▇▇▇ ▇▇, Secretary
Countersigned:
-------------------------------
By:
-------------------------------
Authorized Signature
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[FORM OF]
REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED, _________________________________ hereby sells,
assigns and transfers unto ____________________________ (Please print name and
address of transferee) this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated:___________________ , 19__
_______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: , 19 Signature
------------------- -- -------------------------------
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment
is not completed, the Company will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificate issued
in exchange for this Rights Certificate.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by this Rights Certificate)
To: First Sierra Financial, Inc.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock ______________ or other securities, cash or other property
issuable upon the exercise of such Rights and requests that certificates for
such shares or other securities be issued in the name of, and such cash or other
property be paid to:
Please insert social security or other identifying number
-------------------------------------------
(Please print name and address)
-------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the remaining balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
-------------------------------------------
(Please print name and address)
-------------------------------------------
Dated: , 19
------------------- --
Signature
------------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of this Rights
Certificate)
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Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
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Exhibit C
to
Rights Agreement
FIRST SIERRA FINANCIAL, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On December 15, 1998, the Board of Directors of First Sierra Financial,
Inc., a Delaware corporation (the "COMPANY"), declared a dividend distribution
of one preferred stock purchase right (a "RIGHT") for each share of common
stock, par value $0.01 per share (the "COMMON STOCK"), of the Company. The
dividend is payable on December 28, 1998 (the "RECORD DATE") to stockholders of
record at the close of business on the Record Date and in respect of all shares
of Common Stock that become outstanding after the Record Date and prior to the
earliest of (a) the Distribution Date (as such term is hereinafter defined), (b)
the redemption of the Rights, (c) the exchange of the Rights and (d) the
expiration of the Rights. Except as described herein and subject to adjustment
as provided in the Rights Agreement (as such term is hereinafter defined), each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of the Company's Junior Preferred Stock, Series C, par
value $0.01 per share (the "PREFERRED STOCK"), at a purchase price of $65.25 per
one one-hundredth of a share (the "PURCHASE PRICE"). The description and terms
of the Rights are set forth in a Rights Agreement, dated as of December 30, 1998
(the "RIGHTS AGREEMENT"), between the Company and ▇▇▇▇▇▇ Trust and Savings Bank,
as Rights Agent (the "RIGHTS AGENT").
The Rights will be evidenced by Common Stock certificates and not
separate certificates until the earliest of (i) 10 days following the date of
public disclosure that a person or group, together with persons affiliated or
associated with it (an "ACQUIRING PERSON"), has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the "STOCK ACQUISITION DATE") and (ii) 10 business days following
commencement or disclosure of an intention to commence a tender offer or
exchange offer by a person or group other than the Company and certain related
entities if, upon consummation of such offer, such person or group, together
with persons affiliated or associated therewith, would beneficially own 15% or
more of the outstanding shares of Common Stock (the earlier of such dates being
the "DISTRIBUTION DATE"). Until the Distribution Date (or earlier redemption or
expiration of the Rights), the transfer of Common Stock will also constitute
transfer of the associated Rights. Following the Distribution Date, separate
certificates will evidence the Rights.
The Rights will first become exercisable on the Distribution Date
(unless sooner redeemed); provided, however, that no Rights will be exercisable
at any time that the Rights are subject to redemption by the Company in
accordance with the terms of the
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Rights Agreement. The Rights will expire at the close of business on December
30, 2008 (the "EXPIRATION DATE"), unless earlier redeemed by the Company as
hereinafter described.
The Purchase Price and the number of shares of Preferred Stock or other
securities, cash or other property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend or distribution on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights, options or warrants to subscribe for
Preferred Stock or securities convertible into Preferred Stock at less than the
current market price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of other securities, cash (excluding regular
periodic cash dividends, property, evidences of indebtedness or assets.
The number of outstanding Rights and the number of one one-hundredths of
a share of Preferred Stock issuable upon exercise of each Right and the Purchase
Price are also subject to adjustment in the event of a stock dividend on the
Common Stock or a stock split of the Common Stock or subdivision, consolidation
or combination of the Common Stock occurring, in any case, prior to the
Distribution Date.
If (i) a person acquires beneficial ownership of 20% or more of the
Common Stock or (ii) the Company is the surviving corporation in a merger with
an Acquiring Person and the Common Stock remains outstanding and unchanged, the
Rights will "FLIP IN" and entitle each holder of a Right, except as provided
below, to purchase, upon exercise at the then-current Purchase Price, that
number of shares of Common Stock having a market value of two times the Purchase
Price.
In the event that, following the Distribution Date, the Company is
acquired in a merger or other business combination in which the Common Stock
does not remain outstanding or is changed or 50% or more of the Company's
consolidated assets or earning power is sold, leased, exchanged or otherwise
transferred or disposed of (in one transaction or a series of related
transactions) the Rights will "FLIP OVER" and entitle each holder of a Right to
purchase, upon the exercise of the Right at the then-current Purchase Price,
that number of shares of common stock of the acquiring company (or, in certain
circumstances, one of its affiliates) which at the time of the transaction would
have a market value of two times the Purchase Price.
Any "flip-in" event or "flip-over" event is a "TRIGGERING EVENT."
Any Rights beneficially owned at any time on or after the Distribution
Date by an Acquiring Person or any affiliate or associate of an Acquiring Person
(whether or not ownership is subsequently transferred) will become null and void
upon the occurrence of a Triggering Event, and any holder of such Rights will
have no right to exercise such Rights.
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. Holders will have no right to receive fractional shares of
Preferred Stock (other than fractions that are integral multiples of one
one-hundredth of a share of Preferred Stock) upon the exercise of Rights. In
lieu of fractional shares, an adjustment in cash may be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
At any time prior to the earlier of (i) the close of business on the
10th day following the Stock Acquisition Date (with the possibility for the
Board of Directors to extend this time for an additional 10 days) and (ii) the
Expiration Date, the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right. The Company may, at its option, pay such redemption
price in cash, shares of Common Stock (based on the market price of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors of the Company. Immediately upon the
action of the Company's Board of Directors electing to redeem the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights thereafter will be to receive the applicable redemption price.
The Company may, at any time after the occurrence of a Triggering Event,
provided that all necessary regulatory approvals have been obtained, exchange
the Rights (other than Rights owned by the Acquiring Person), in whole or in
part, at a ratio of one share of Common Stock per Right, subject to adjustment.
Until a Right is exercised, the holder has no rights as a Stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends or distributions.
At any time prior to the Distribution Date, the Company may, without the
approval of any holder of the Rights, supplement or amend any provision of the
Rights Agreement (including the date on which the Distribution Date will occur),
except the Purchase Price, the number of shares of Preferred Stock, other
securities, cash or other property obtainable upon exercise of a Right, the
redemption price or the Expiration Date. Thereafter, the Rights Agreement may be
amended only to cure ambiguities, to correct inconsistent provisions or in ways
that do not adversely affect the holders of the Rights.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1.00 per share but will be entitled
to an aggregate dividend of 100 times the dividend declared per share of Common
Stock, if greater. In the event of liquidation, the holders of the Preferred
Stock will be entitled to a minimum preferential liquidation payment of $100 per
share, but will be entitled to an aggregate payment of 100 times the payment
made per share of Common Stock, if greater. In the event of any merger or other
business combination in which Common Stock is exchanged, each
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share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. Customary anti-dilution provisions protect
these rights.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-hundredth of a share of Preferred Stock
purchasable upon exercise of each Right is intended to approximate the value of
one share of Common Stock.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors of the Company because, at any time until 10 days following the Stock
Acquisition Date, subject to extension by the Board of Directors for a period of
time up to 10 additional days, the Rights may be redeemed by the Company at
$0.01 per Right.
-------------------
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission and is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
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