EXHIBIT 4.1
EXECUTION COPY
RIGHTS AGREEMENT
dated as of
May 17, 1999
between
▇.▇. ▇▇▇▇▇▇▇▇ TOBACCO HOLDINGS, INC.
and
THE BANK OF NEW YORK
as Rights Agent
TABLE OF CONTENTS
----------------------
PAGE
SECTION 1. Definitions.......................................................1
SECTION 2. Appointment of Rights Agent.......................................5
SECTION 3. Issue of Right Certificates.......................................6
SECTION 4. Form of Right Certificates........................................7
SECTION 5. Countersignature and Registration.................................8
SECTION 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates................8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....9
SECTION 8. Cancellation of Right Certificates...............................11
SECTION 9. Reservation and Availability of Capital Stock....................11
SECTION 10. Preferred Stock Record Date.....................................12
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights........................................13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares......21
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..............................................22
SECTION 14. Fractional Rights and Fractional Shares.........................25
SECTION 15. Rights of Action................................................26
SECTION 16. Agreement of Right Holders......................................26
SECTION 17. Right Certificate Holder Not Deemed a Stockholder
..........................................................27
SECTION 18. Concerning the Rights Agent.....................................28
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agents.....................................................28
SECTION 20. Duties of Rights Agent..........................................29
SECTION 21. Change of Rights Agent..........................................32
SECTION 22. Issuance of New Right Certificates..............................33
SECTION 23. Redemption......................................................33
SECTION 24. Exchange........................................................33
SECTION 25. Notice of Proposed Actions......................................35
SECTION 26. Notices.........................................................36
SECTION 27. Supplements and Amendments......................................36
SECTION 28. Successors......................................................37
SECTION 29. Determinations and Actions by the Board, etc....................37
SECTION 30. Benefits of this Agreement......................................37
SECTION 31. Severability....................................................37
SECTION 32. Governing Law...................................................37
SECTION 33. Counterparts....................................................37
SECTION 34. Descriptive Headings............................................38
Exhibit A - Form of Certificate of Designation of Preferred Stock
Exhibit B - Form of Right CertificatE
RIGHTS AGREEMENT
AGREEMENT dated as of May 17, 1999 between ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco
Holdings, Inc., a Delaware corporation (the "Company), and The Bank of New
York, a New York banking corporation as Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, on May 17, 1999 the Board of Directors of the Company
authorized and declared a dividend, payable on May 27, 1999 (the "Record
Date"), of preferred stock purchase rights (the "Rights") in an amount such
that one Right is payable with respect to each share of Common Stock (as
hereinafter defined) outstanding at the close of business on June 14, 1999 and
has authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right (subject to adjustment) in respect of each
share of Common Stock issued after June 14, 1999, each Right representing the
right to purchase, upon the terms and subject to the conditions hereinafter
set forth, one one-hundredth (subject to adjustment) of a share of Preferred
Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. The following terms, as used herein, have the
following meanings:
"Acquiring Person" means any Person who, together with all Affiliates
and Associates of such Person, shall at any time after June 14, 1999 be the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include an Exempt Person; provided, however, that
(a) if the Board determines in good faith that a Person who would otherwise be
an "Acquiring Person" became the Beneficial Owner of a number of shares of
Common Stock such that the Person would otherwise qualify as an "Acquiring
Person" inadvertently (including, without limitation, because (i) such Person
was unaware that it beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (ii) such Person
was aware of the extent of its Beneficial Ownership of Common Stock but had no
actual knowledge of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement unless and until such
Person shall have failed to divest itself, as soon as practicable (as
determined, in good faith, by the Board of Directors of the Company), of
Beneficial Ownership
of a sufficient number of shares of Common Stock so that such Person would no
longer otherwise qualify as an "Acquiring Person"; and (b) no Person shall
become an "Acquiring Person" as the result of any acquisition of shares of
Common Stock by the Company which, by reducing the number of shares of Common
Stock outstanding, increases the proportionate number of shares of Common
Stock beneficially owned by such Person to 15% or more of the shares of Common
Stock then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisition by the Company and shall thereafter become
the Beneficial Owner of any additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such
additional shares of Common Stock such Person does not beneficially own 15% or
more of the shares of Common Stock then outstanding.
"Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act as in effect on the date
hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to have "Beneficial Ownership" of and to "beneficially own", any
securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, 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 such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (B) securities which
such Person has a right to acquire upon the
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exercise of Rights at any time prior to the time that any
Person becomes an Acquiring Person or (C) securities
issuable upon the exercise of Rights from and after the time
that Person becomes an Acquiring Person if such Rights were
acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof ("Original Rights") or
pursuant to Section 11(i) or Section 11(p) with respect to
an adjustment to Original Rights; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own", any security under this clause (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made
pursuant to the applicable rules and regulations under the
Exchange Act and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) and with respect
to which such Person or any of its Affiliates or Associates has any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in subparagraph (b)(ii) immediately
above) or disposing of any such securities;
provided, however, that no Person who is an officer, director or employee of
an Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned", including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person.
"Board" means the Board of Directors of the Company.
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"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of business" on any given date means 5:00 P.M., New York City
time, on such date; provided that if such date is not a Business Day "close of
business" means 5:00 P.M., New York City time, on the next succeeding Business
Day.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company, except that, when used with reference to any Person other than
the Company, "Common Stock" means the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person.
"Distribution Date" means the earlier of (a) the close of business on
the tenth day (or such later day as may be designated by action of a majority
of the Board) after the Stock Acquisition Date and (b) the close of business
on the tenth Business Day (or such later day as may be designated prior to the
occurrence of a Section 11(a)(ii) Event by action of the Board) after the date
of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person; provided,
however, that if either of such dates occurs after the date of this Agreement
and on or prior to the Record Date, then the Distribution Date shall be the
Record Date.
"Exempt Person" shall mean the Company or any Subsidiary of the
Company, in each case including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity or trustee holding Common Stock for or pursuant to
the terms of any such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Company or of any
Subsidiary of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means the earlier of (a) the Final Expiration Date
and (b) the time at which all Rights are redeemed as provided in Section 23 or
exchanged as provided in Section 24.
"Final Expiration Date" means the close of business on May 27, 2009.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization.
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"Preferred Stock" means the Series A Junior Participating Preferred
Stock, par value $0.01 per share, of the Company, having the terms set forth
in the form of certificate of designation attached hereto as Exhibit A.
"Purchase Price" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one one-hundredth of a share
of Preferred Stock (subject to adjustment as provided herein) upon exercise of
a Right, which price shall initially be $150.
"Section 11(a)(ii) Event" means any event described in the first
clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x), (y) or
(z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any Section 13
Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no even be liable
for, the acts or omissions of any such Co-Rights Agent. If the
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Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
SECTION 3. Issue of Right Certificates. (a) Prior to the Distribution
Date, (i) the Rights will be evidenced (subject to the penultimate sentence of
this Section 3(a)) by the certificates for the Common Stock and not by
separate Right Certificates (as hereinafter defined) and the registered
holders of the Common Stock shall be deemed to be the registered holders of
the associated Rights, and (ii) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock. With
respect to certificates for Common Stock outstanding as of the Record Date,
prior to the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights. Prior to the Distribution Date (or, if earlier,
the Expiration Date), the surrender for transfer of any certificate for Common
Stock outstanding on the Record Date, with or without a copy of the Summary of
Rights, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby.
(b) The Company shall give the Rights Agent prompt written notice of
the Distribution Date. As soon as practicable after the Company has notified
the Rights Agent of the occurrence of the Distribution Date, the Rights Agent
will, at the Company's expense, 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 (other than any Acquiring Person or any Affiliate or
Associate thereof), at the address of such holder shown on the records of the
Company, one or more Right Certificates evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. If an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11 the Company shall, at the time of distribution of the
Right Certificates, make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a)) so that Right Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. From and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to
the Expiration Date, the Company (i) shall, with respect to shares of Common
Stock so issued or sold (x) pursuant to the exercise of stock options or under
any employee plan or arrangement or (y) upon the exercise, conversion or
exchange of other securities issued by the Company prior to the Distribution
Date and (ii) may, in any other
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case, if deemed necessary or appropriate by the Board, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided that no such Right Certificate shall be issued
if, and to the extent that, (i) the Company shall be advised by counsel that
such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right Certificate would
be issued or (ii) appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
(d) Certificates issued for Common Stock after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between ▇.▇. ▇▇▇▇▇▇▇▇ Tobacco Holdings, Inc. and The
Bank of New York, as Rights Agent, dated as of May 17, 1999 and as
amended from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of the Company. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be evidenced by separate
certificates and no longer be evidenced by this certificate, may be
redeemed or exchanged or may expire. As set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any subsequent holder, may
be null and void.
SECTION 4. Form of Right Certificates. The certificates evidencing
the Rights (and the forms of assignment, election to purchase and certificates
to be printed on the reverse thereof) (the "Right Certificates") shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation 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. The Right Certificates shall be in a form
reasonably satisfactory to the Rights Agent. The Right Certificates, whenever
distributed, shall be dated as of the Record Date and show the date of
countersignature.
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SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, 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. The Right Certificates
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 whose
manual or facsimile signature is affixed to the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates may,
nevertheless, be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the place
for surrender of Right Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right Certificates. Such books shall show
with respect to each Right Certificate the name and address of the registered
holder thereof, the number of Rights indicated on the certificate and the
certificate number.
SECTION 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. (a) At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth in
this Agreement, be transferred or exchanged for another Right Certificate or
Certificates evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or
exchange any Right Certificate or Certificates shall surrender such Right
Certificate or Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed) to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Certificates until the registered holder of
the Rights has complied with the requirements of Section 7(e). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject to
Sections 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so
8
requested. The Company may require payment by the holders of Rights of a sum
sufficient to cover any transfer tax or other governmental charge that may be
imposed in connection with any transfer or exchange of any Right Certificate
or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate, if mutilated, the Company will issue
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d), 7(e), 9(c), 11(a), 23 and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company)
of the aggregate Purchase Price with respect to the Rights then to be
exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent therefor) certificates for the total
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) if the Company shall have elected to deposit
the shares of Preferred Stock issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary receipts
representing interests in such 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 such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 and (iii) after receipt of
such certificates or
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depositary receipts and cash, if any, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate (with such
certificates or receipts registered in such name or names as may be designated
by such holder). If the Company is obligated to deliver Common Stock, other
securities or assets pursuant to this Agreement, the Company will make all
arrangements necessary so that such other securities and assets are available
for delivery by the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Right Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
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 such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(d)
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(d) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates and Associates or any
transferee of any of them hereunder.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of Rights upon the occurrence of
any purported transfer pursuant to Section 6 or exercise pursuant to this
Section 7 unless such registered holder (i) shall have completed and signed
the certificate contained in
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the form of assignment or election to purchase, as the case may be, set forth
on the reverse side of the Right Certificate surrendered for such transfer or
exercise, as the case may be, (ii) shall not have indicated an affirmative
response to clause 1 or 2 thereof and (iii) shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. Cancellation of Right Certificates. All Right Certificates
surrendered for exercise, transfer or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall
cancel, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company.
SECTION 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for such issuance to be listed on any
such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities Act with
respect to the securities issuable upon exercise of the Rights, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily
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suspend, for a period of time not to exceed 90 days after the date set forth
in clause 9(c)(i), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement, with
simultaneous written notice to the Rights Agent, 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 such provision of this Agreement to the contrary, the
Rights shall not be exercisable for securities in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained,
such exercise therefor shall not be permitted under applicable law or a
registration statement in respect of such securities shall not have been
declared effective. Until it has received notice to the contrary, the Rights
Agent may assume that any Right exercised is permitted to be exercised under
applicable law and shall have no liability for acting in reliance upon such
assumption.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one one-hundredths of a share of
Preferred Stock issuable upon exercise of Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and 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 other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax or other governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of any Right
Certificates or of any certificates for Preferred Stock to a Person other than
the registered holder of the applicable Right Certificate, and prior to any
such transfer, issuance or delivery any such tax or other governmental charge
shall have been paid by the holder of such Right Certificate or it shall have
been established to the Company's satisfaction that no such tax or other
governmental charge is due.
SECTION 10. Preferred Stock Record Date. Each Person (other than the
Company) in whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of such Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
transfer taxes or other governmental charges) was made; provided that if the
date of such surrender and payment is a date upon which the transfer books of
the Company relating to the Preferred Stock are closed, such Person shall be
deemed to have become the
12
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the applicable transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable,
including the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. (a) (i) If the Company shall at any time after the date
of this Agreement (A) pay a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock into a
greater 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 involving the Company), the
Purchase Price in effect immediately prior to the record date for such
dividend or the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
other capital stock issuable on such date shall be proportionately adjusted so
that each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to such date, the
aggregate number and kind of shares of Preferred Stock or other capital stock,
as the case may be, which, if such Right had been exercised immediately prior
to such date and at a time when the applicable transfer books of the Company
were open, such holder would have been entitled to receive upon such exercise
and by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which requires an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement,
become an Acquiring Person, then each holder of a Right shall (except
as otherwise provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the Purchase Price in
effect immediately prior to the first occurrence of a Section
11(a)(ii) Event, in lieu of Preferred Stock, such number of duly
authorized, validly issued, fully paid and nonassessable shares of
Common Stock of the Company (such shares being referred to herein as
the "Adjustment Shares") as shall be equal to the result obtained by
dividing
13
(x) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
a Section 11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the
"Purchase Price" for each Right) by
(y) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of Common Stock on
the date of such first occurrence;
provided, however, that the Purchase Price (as so adjusted pursuant
to the foregoing clause (ii)(x)) and the number of Adjustment Shares
so receivable upon exercise of a Right shall, following the
occurrence of such Section 11(a)(ii) Event, be subject to further
adjustment as appropriate in accordance with Section 11(f). From and
after the occurrence of a Section 13 Event, any Rights that
theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are authorized
by the Company's certificate of incorporation but not outstanding or
reserved for issuance other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance
with Section 11(a)(ii), the Company shall, with respect to each
Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the Purchase Price then in effect, (A) (to
the extent available) Common Stock and then, (B) (to the extent
available) such number of one one-hundredths of a share of Preferred
Stock as are then equivalent in value to the value of the Adjustment
Shares, and then, if necessary, (C) other equity or debt securities
of the Company, cash or other assets, a reduction in the Purchase
Price or any combination of the foregoing, having an aggregate value
(based upon the advice of a nationally recognized investment banking
firm) equal to the value of the Adjustment Shares; provided that (x)
the Company may, and (y) if the Company shall not have made adequate
provision as required above to deliver value within 30 days following
the first occurrence of a Section 11(a)(ii) Event (the "Substitution
Period"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of
the Purchase Price, (1) (to the extent available) Common Stock and
then (2) (to the extent available) one-hundredths of a share of
Preferred Stock and then, if necessary, (3) other equity or debt
securities
14
of the Company, cash or other assets or any combination of the
foregoing, having an aggregate value (based upon the advice of a
nationally recognized investment banking firm) equal to the excess of
the value of the Adjustment Shares over the Purchase Price. To the
extent that the Company determines that some action is to be taken
pursuant to the preceding sentence, the Company (X) shall provide,
subject to Section 7(d), that such action shall apply uniformly to
all outstanding Rights and (Y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
decide the appropriate form and value of any consideration to be
delivered as referred to in the preceding sentence. If any such
suspension occurs, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current market
price per share of Common Stock (as determined pursuant to Section
11(d)) on the date of the first occurrence of a Section 11(a)(ii)
Event; any common stock equivalent shall be deemed to have the same
value as the Common Stock on such date; and the value of other
securities or assets shall be determined pursuant to Section
11(d)(iii).
(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 such record date) Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any
conversion or exercise price) less than the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such date by a fraction, the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate price (taking account of any conversion
or exercise price) of the total number of shares of Preferred Stock (and/or
equivalent preferred stock) so to be offered would purchase at such current
market price and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock (and/or equivalent preferred stock) so to be
offered. In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board,
whose determination shall be described
15
in a statement filed with the Rights Agent and shall be conclusive for all
purposes. 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. Such adjustment shall be made successively whenever such a record
date is fixed, and if such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger involving the
Company) of evidences of indebtedness, equity securities other than Preferred
Stock, assets (other than a regular periodic cash dividend out of the earnings
or retained earnings of the Company) or rights, options or warrants (excluding
those referred to in Section 11(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section
11(d)) per share of Preferred Stock on such record date, less the value (as
determined pursuant to Section 11(d)(iii)) of such evidences of indebtedness,
equity securities, assets, rights, options or warrants so to be distributed
with respect to one share of Preferred Stock and the denominator of which
shall be such current market price per share of Preferred Stock. Such
adjustment shall be made successively whenever such a record date is fixed,
and if such distribution is not so made, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), the "current market price"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the 10 consecutive
Trading Days immediately following such date; and for purposes of computations
made pursuant to Section 14, the "current market price" per share of Common
Stock for any Trading Day shall be deemed to be the closing price per share of
Common Stock for such Trading Day; provided that if the current market price
per share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities exercisable for or convertible into shares of such Common Stock
(other than the Rights), or (B) any
16
subdivision, combination or reclassification of such Common Stock, and prior
to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as
set forth above, after the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification,
then, and in each such case, the "current market price" shall be properly
adjusted to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the shares of Common Stock are not listed
or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then
in use or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as determined
in good faith by the Board (or, if at the time of such determination there is
an Acquiring Person, by a nationally recognized investment banking firm) shall
be used. If the Common Stock is not publicly held or not so listed or traded,
the "current market price" per share means the fair value per share as
determined in good faith by the Board, or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized
investment banking firm, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in Section
11(d)(i) (other than the last sentence thereof). If the current
market price per share of Preferred Stock cannot be determined in
such manner, the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (as such
number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the
current market price per share of Common Stock (as determined
pursuant to Section 11(d)(i) (other than the last sentence thereof)).
If neither the Common Stock nor the Preferred Stock is publicly
17
held or so listed or traded, the "current market price" per share of
the Preferred Stock shall be determined in the same manner as set
forth in the last sentence of Section 11(d)(i). For all purposes of
this Agreement, the "current market price" of one one-hundredth of a
share of Preferred Stock shall be equal to the "current market price"
of one share of Preferred Stock divided by 100.
(iii) For the purpose of any computation hereunder, the value of any
securities or assets other than Common Stock or Preferred Stock shall
be the fair value as determined in good faith by the Board, or, if at
the time of such determination there is an Acquiring Person, by a
nationally recognized investment banking firm which determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may
be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof 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 Preferred Stock contained in
Section 11(a), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one
one-hundredths of a share of Preferred Stock and other capital stock of the
Company issuable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
18
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and 11(c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
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 for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which such Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record
of Right Certificates on the record date specified in the public announcement.
19
(j) 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 Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value, if any, of the number of one
one-hundredths of a share 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 such number of one one-hundredths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided that the
Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exercisable for Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its Preferred Stock, shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate, merge or otherwise combine with
or (ii) sell or otherwise transfer (and/or permit any of its Subsidiaries to
sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning
20
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 if (x)
at the time of or immediately after such consolidation, merger, combination or
sale there are any rights, warrants or other instruments or securities
outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, combination or sale, the stockholders of a
Person who constitutes, or would constitute, the "Principal Party" for the
purposes of Section 13 shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if
at any time after the date hereof and prior to the Distribution Date the
Company shall (i) pay a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
into a larger number of shares or (iii) combine the outstanding 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 as
contemplated by Section 3(c), 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 such event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in the manner set forth in Section 26. The Rights Agent shall be
fully protected in relying on any
21
such certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) If, following the occurrence of a Section 11(a)(ii) Event,
directly or indirectly,
(x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation, merger or
combination,
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving
corporation of such merger or combination and, in connection with
such merger or combination, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for other stock or
securities of the Company or any other Person, cash or any other
property, or
(z) the Company and/or one or more of its Subsidiaries shall sell
or otherwise transfer, in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries,
taken as a whole, to any other Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
(i) each holder of a Right shall thereafter be entitled to receive,
upon exercise thereof at the Purchase Price in effect immediately
prior to the first occurrence of a Section 11(a)(ii) Event, such
number of duly authorized, validly issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the
Principal Party (as hereinafter defined), not subject to any rights
of call or first refusal, liens, encumbrances or other claims, as
shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
a Section 11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by
22
(B) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of the Common Stock
of such Principal Party on the date of consummation of such
consolidation, merger, combination, sale or transfer;
provided, however, that the Purchase Price (as so adjusted pursuant
to the foregoing clause (i)(A)) and the number of shares of Common
Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance
with Section 11(f) to reflect any events occurring in respect of the
Common Stock of such Principal Party after the occurrence of such
consolidation, merger, sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions
of Section 11 shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a)) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x)
or (y), the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such merger,
consolidation or combination, and if no securities are so issued, the
Person that survives or results from such merger, consolidation or
combination; and
23
(ii) in the case of any transaction described in Section 13(a)(z),
the Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction or
transactions;
provided that in any such case, (A) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other Person; and
(B) in case such 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 such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise reserved for issuance to permit the exercise in full
of the Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Section 13(a) and 13(b) and providing that, as soon as practicable after the
date of any consolidation, merger, combination, sale or transfer mentioned in
Section 13(a), the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise
of the Rights, and will use its best efforts to cause such
registration statement (A) to become effective as soon as practicable
after such filing and (B) to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Expiration Date; and
(ii) deliver to holders of the Rights historical financial s
tatements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) In no event shall the Rights Agent have any liability in respect
of any such Principal Party transactions, including, without limitation, the
propriety thereof. The Rights Agent may rely and be fully protected in relying
upon a certificate of the Company stating that the provisions of this Section
13 have been fulfilled. Notwithstanding anything in this Agreement to the
contrary, the prior
24
written consent of the Rights Agent must be obtained in connection with any
supplemental agreement which alters the rights or duties of the Rights Agent.
SECTION 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
price of a whole Right. For purposes of this Section 14(a), the current market
price of a whole Right shall be the closing price of a Right for the Trading
Day immediately prior to the date on which such fractional Rights would
otherwise have been issuable. The closing price of a Right for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board. If on any such date no such market maker is making a
market in the Rights, the current market price of the Rights on such date
shall be as determined in good faith by the Board, or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized
investment banking firm.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are 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 multiples of one one-hundredth of a share of
Preferred Stock). In lieu of any such fractional shares of Preferred Stock,
the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market price of one one-hundredth of a share
of Preferred Stock. For purposes of this Section 14(b), the current market
price of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as
25
determined pursuant to Section 11(d)) for the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
or exchanged as herein provided an amount in cash equal to the same fraction
of the current market price of a share of Common Stock. For purposes of this
Section 14(c), the current market price of a share of Common Stock shall be
the closing price of a share of Common Stock (as determined pursuant to
Section 11(d)(i)) for the Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right except as permitted by this Section 14.
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
any certificate representing 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
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
26
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent
may deem and treat the Person in whose name a Right Certificate (or,
prior to the Distribution Date, a certificate representing shares of
Common Stock) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the certificate representing
shares of Common Stock made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent, subject to the last sentence of Section 7(d),
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use
its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
27
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to
pay to the Rights Agent such compensation as shall be agreed to in writing
between the Company and the Rights Agent 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 execution or administration of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the administration of this Agreement or the exercise or
performance of its duties hereunder, including without limitation the costs
and expenses of defending against any claim (whether asserted by the Company,
a holder of Rights, or any other Person) of liability including reasonable
attorney's fees and expenses. The provisions of this Section 18(a) shall
survive the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with the administration of this Agreement or the exercise or performance of
its duties hereunder in reliance upon any Right 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,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed and executed by the
proper Person or Persons, and, where necessary, to be acknowledged.
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agents. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may
28
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any
"Acquiring Person" and the determination of "current market price")
be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken, suffered or omitted in good
faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
29
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(d)) or any
adjustment in the terms of the Rights (including the manner, method
or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or
the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after the Rights Agent's actual
notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any shares of Common Stock or Preferred Stock to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when
issued, be duly authorized, validly issued, fully paid and
nonassessable, nor shall the Rights Agent be responsible for the
legality of the terms hereof in its capacity as an administrative
agent.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President or any Vice President
or the Secretary or any Assistant Secretary or the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall
not be liable for any action taken, suffered or omitted to be taken
by it in good faith in
30
accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions.
(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 the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the
Company or to any holders of Rights resulting from any such act,
default, neglect or misconduct, provided that 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) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the cases
may be, has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or
transfer without first consulting with the Company.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any
action taken or omitted by it in connection with its administration
of this Agreement if such acts or omissions are in reliance upon (i)
the proper execution of the certification concerning beneficial
ownership appended to the form of assignment and the form of election
to purchase attached hereto unless the Rights Agent shall have actual
knowledge that, as executed, such
31
certification is untrue, or (ii) the non-execution of such
certification including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such
non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or
transfer of the Right Certificates.
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. 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. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
Rights Agent or any registered holder of any Right Certificate may, at the
expense of the Company, apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
state of the United States, in good standing, having a principal office in the
State of New York, which is authorized under such laws to exercise stock
transfer or 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
$50,000,000 or (b) an Affiliate of a corporation described in clause 21(a).
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, subsequent to the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21, 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.
32
SECTION 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares of stock
issuable upon exercise of the Rights made in accordance with the provisions of
this Agreement.
SECTION 23. Redemption. (a) The Board may, at its option, at any time
prior to the earlier of (i) the close of business on the tenth day after the
Stock Acquisition Date (or such later date as a majority of the Board may
designate prior to such time as the Rights are no longer redeemable) and (ii)
the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be 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"); provided that after
any Person has become an Acquiring Person, any redemption of the Rights shall
be effective only if such redemption shall have been approved by a majority of
the Board. Notwithstanding anything in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired. The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board in its sole discretion may
establish. The Redemption Price shall be payable, at the option of the
Company, in cash, shares of Common Stock, or such other form of consideration
as the Board shall determine.
(b) Immediately upon the action of the Board electing to redeem the
Rights (or at such later time as the Board may establish for the effectiveness
of such redemption), and without any further action and without any notice,
the right to exercise the Rights will terminate and thereafter the only right
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. The Company shall promptly thereafter give notice of such
redemption to the Rights Agent and the holders of the Rights in the manner set
forth in Section 26; provided that the failure to give, or any defect in, such
notice shall not affect the validity of such redemption. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
SECTION 24. Exchange. (a) At any time after the occurrence of a
Section 11(a)(ii) Event, the Board may, at its option, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to Section 7(d)) for shares of Common Stock at
an
33
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 hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after an Acquiring Person
together with all Affiliates and Associates of such Acquiring Person, becomes
the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding. From and after the occurrence of a Section 13 Event, any Rights
that theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
electing to exchange any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights will
terminate and thereafter the only right 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 thereafter give notice of such exchange to the Rights Agent and the
holders of the Rights to be exchanged in the manner set forth in Section 26;
provided that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the shares of 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 Section 7(d)) held by
each holder of Rights.
(c) The Company may at its option substitute, and, in the event that
there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit the exchange of Rights for
Common Stock ordered in accordance with Section 24(a), the Company shall
substitute to the extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a number of one-one
hundredths of a share of Preferred Stock such that the current market price
(determined pursuant to Section 11(d)) of such number of one-one hundredths of
a share of Preferred Stock is equal to the current market price (determined
pursuant to Section 11(d)) of one share of Common Stock as of the date of such
exchange.
34
SECTION 25. Notice of Proposed Actions. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company),
or (ii) to offer to the holders of its 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 or combination of outstanding
shares of Preferred Stock) or (iv) to effect any consolidation or merger with
any other Person, or to effect and/or to permit one or more of its
Subsidiaries to effect any sale or other transfer, in one transaction or a
series of related transactions, of 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, 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 Right and to the Rights
Agent, to the extent feasible and in accordance with Section 26, a notice of
such proposed action, which shall specify the record date for the purposes of
any such dividend, distribution or offering of rights or warrants, or the date
on which any such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Preferred Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action
covered by clause 25(a)(i) or 25(a)(ii) above at least 20 days prior to the
record date for determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering, 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
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such
action.
(b) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a public filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the Rights, for purposes of
this Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to each holder of a
Right and to the Rights Agent, in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or 13, as the case
may be, and (ii) all
35
references in Section 25(a) to Preferred Stock shall be deemed thereafter to
refer to Common Stock or other capital stock, as the case may be.
SECTION 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right to or on
the Company shall be sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of the Company indicated on the signature
page hereof or such other address as the Company shall specify in writing to
the Rights Agent. Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail (postage prepaid) to the address of the
Rights Agent indicated on the signature page hereof or such other address as
the Rights Agent shall specify in writing to the Company. Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate (or, prior to the Distribution
Date, to the holder of any certificate representing shares of Common Stock)
shall be sufficiently given or made if sent by first-class mail (postage
prepaid) to the address of such holder shown on the registry books of the
Company.
SECTION 27. Supplements and Amendments. For so long as the Rights are
redeemable, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of certificates representing shares of
Common Stock. At any time when the Rights are no longer redeemable, the
Company may, and the Rights Agent shall if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Rights;
provided, however, that no such supplement or amendment may (a) adversely
affect the interests of the holders of Rights as such (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person), (b) cause this
Agreement again to become amendable other than in accordance with this
sentence, or (c) cause the Rights again to become redeemable. Notwithstanding
the foregoing, after any Person has become an Acquiring Person, any supplement
or amendment shall be effective only if such supplement or amendment has been
approved by a majority of the Board. Upon the delivery of a certificate from
an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section, the
Rights Agent shall execute such supplement or amendment. Notwithstanding any
other provision hereof, the Rights Agent's consent must be obtained regarding
any amendment or supplement pursuant to this Section 27 which alters the
Rights Agent's rights or duties.
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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. Determinations and Actions by the Board, etc. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in
effect on the date of this Agreement. The Board shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including the
right and power to (i) interpret the provisions of this Agreement and (ii)
make all determinations deemed necessary or advisable for the administration
of this Agreement (including a determination to redeem or exchange or not to
redeem or exchange the Rights or to amend the Agreement).
SECTION 30. 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 Right Certificates (and, prior to the
Distribution Date, the certificates representing the shares of 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 Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of Common
Stock).
SECTION 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
SECTION 32. Governing Law. This Agreement, each Right and each Right
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 to
be made and performed entirely within such State, except that the rights and
obligations of the Rights Agent shall be governed by the laws of the State of
New York.
SECTION 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
37
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
SECTION 34. Descriptive Headings. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
▇.▇. ▇▇▇▇▇▇▇▇ TOBACCO HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
General Counsel
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
THE BANK OF NEW YORK, as Rights Agent
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Stock Transfer Administration