Exhibit 1
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RIGHTS AGREEMENT
between
STORAGE TRUST REALTY
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Dated as of August 7, 1998
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions............................................1
Section 2. Appointment of Rights Agent....................................4
Section 3. Issuance of Right Certificates.................................4
Section 4. Form of Right Certificates.....................................6
Section 5. Countersignature and Registration..............................7
Section 6. Transfer, Division, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates...................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights......................................................8
Section 8. Cancellation and Destruction of Right Certificates............10
Section 9. Availability of Preferred Shares..............................11
Section 10. Preferred Shares Record Date..................................11
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights..............................................11
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares..............................................18
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power..............................................18
Section 14. Fractional Rights and Fractional Shares.......................20
Section 15. Rights of Action..............................................22
Section 16 Agreement of Right Holders....................................22
Section 17. Right Certificate Holder Not Deemed a Shareholder.............23
Section 18. Concerning the Rights Agent...................................23
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....23
Page
Section 20. Duties of Rights Agent........................................24
Section 21. Change of Rights Agent........................................26
Section 22. Issuance of New Right Certificates............................27
Section 23. Redemption....................................................27
Section 24. Exchange......................................................28
Section 25. Notice of Certain Events......................................29
Section 26. Notices.......................................................30
Section 27. Supplements and Amendments....................................30
Section 28. Successors....................................................30
Section 29. Benefits of this Agreement....................................30
Section 30. Severability..................................................31
Section 31. Governing Law.................................................31
Section 32. Counterparts..................................................31
Section 33. Descriptive Headings..........................................31
Section 34. Determinations and Actions by the Board of Trustees...........31
Exhibit A - Form of Articles Supplementary of Storage Trust Realty
Exhibit B - Form of Right Certificate
RIGHTS AGREEMENT
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Agreement, dated as of August 7, 1998 between Storage Trust
Realty, a Maryland real estate investment trust (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company (the "Rights Agent").
The Board of Trustees of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding as of the Close
of Business on August 21, 1998 (the "Record Date"), each Right representing
the right to purchase one one-thousandth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein
set forth, and has further agreed to authorize and direct the issuance of
one Right with respect to each Common Share that shall become outstanding
between the Record Date and the first to occur of the Redemption Date and
the Final Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as hereinafter defined) of 15% or more of
the Common Shares of the Company then outstanding, but shall not
include the Company, any Affiliate or Subsidiary (as hereinafter
defined) of the Company, any employee benefit plan of the Company
or of any Affiliate or Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of (i) an acquisition of Common
Shares by the Company which, by reducing the number of Common
Shares outstanding, increases the proportionate number of Common
Shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding, or (ii) the
acquisition by such Person of newly issued Common Shares directly
from the Company (it being understood that a purchase from an
underwriter or other intermediary is not directly from the
Company); provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding by reason of Common Share purchases by
the Company or the receipt of newly issued Common Shares directly
from the Company and shall, after such Common Share purchases or
direct issuance by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall be
deemed to be an "Acquiring Person"; provided further, however,
that any transferee from such Person who becomes the Beneficial
Owner of 15%
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or more of the Common Shares of the Company then outstanding shall
nevertheless be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Trustees of the
Company determines in good faith that a Person who would otherwise
be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph, has become such inadvertently, and
such Person divests as promptly as practicable (and in any event
within ten Business Days after notification by the Company) a
sufficient number of Common Shares so that such Person would no
longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this paragraph, then such Person shall not
be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on the date
of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A)
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding, whether
written or oral (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 (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; (B) the
sole or shared right to vote or dispose (including any
such right pursuant to any agreement, arrangement or
understanding, whether written or oral); provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or (C)
"beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the
Exchange Act); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
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Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public offering
of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso
to clause (B) of subparagraph (ii) of this definition) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to the Beneficial Ownership of securities of
the Company by any Person, shall mean the number of such
securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday,
a Sunday, or a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00
P.M., Eastern time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Eastern time,
on the next succeeding Business Day.
"Common Shares" when used with reference to the Company
shall mean the common shares of beneficial interest, par value
$0.01 per share, of the Company. "Common Shares" when used with
reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power
of such other Person or the equity securities or other equity
interest having power to control or direct the management of such
other Person.
"Distribution Date" shall have the meaning set forth in
Section 3 hereof.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
"Expiration Date" shall have the meaning set forth in
Section 7 hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
"Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Preferred Shares" shall mean the Series A Junior
Participating Preferred Shares, par value $0.01 per share, of the
Company having the rights and preferences set forth in the form of
Articles Supplementary attached to this Agreement as Exhibit A.
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"Principal Party" shall have the meaning set forth in
Section 13 hereof.
"Purchase Price" shall have the meaning set forth in
Section 4 hereof.
"Redemption Date" shall have the meaning set forth in
Section 7 hereof.
"Right Certificate" shall have the meaning set forth in
Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section
13(d) promulgated under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or
indirectly, by such Person.
"Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
"Triggering Event" shall mean any event described in
Section 11(a)(ii) or Section 13(a).
Any determination or interpretation required in connection with
any of the definitions contained in this Section 1 shall be made by the
Board of Trustees of the Company in their good faith judgment, which
determination shall be final and binding on the Rights Agent and on all
shareholders of the Company.
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 ten days' prior written
notice to the Rights Agent. The Rights Agent shall have no duty to
supervise and shall in no event be liable for acts or omissions of any such
co-Rights Agents.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
day after the Shares Acquisition Date, (ii) the Close of Business on the
fifteenth Business Day (or such later date as may be determined by action
of the Board of Trustees prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than the Company, any Affiliate or Subsidiary of the Company, any employee
benefit plan of the Company or of any Affiliate or Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the
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terms of any such plan) of, or of the first public announcement of, the
intention of any Person (other than the Company, any Affiliate or
Subsidiary of the Company, any employee benefit plan of the Company or of
any Affiliate or Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan) to commence, a tender
or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or more of
the then outstanding Common Shares, or (iii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of
the Board of Trustees prior to such time as any Person becomes an Acquiring
Person) after the date of filing by any Person of, or the first public
announcement of the intention of any Person to file, any application,
request, submission or other document with any federal or state regulatory
authority seeking approval of, attempting to rebut any presumption of
control upon, or otherwise indicating an intention to enter into, any
transaction or series of transactions the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares, other than a
transaction in which newly issued Common Shares are issued directly by the
Company to such Person (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and
the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in substantially
the form of Exhibit B hereto (a "Right Certificate"), evidencing one Right
for each Common Share so held. As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(b) With respect to certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof, and registered holders of Common Shares shall also be the
registered holders of the associated Rights (regardless of whether such
ownership is indicated on the Common Share certificates). Until the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, the transfer of any certificate for Common Shares shall
also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares which
are issued (whether or not previously issued) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date. Certificates evidencing such Common Shares shall
also be deemed to be certificates for Rights. Certificates evidencing both
Common Shares and Rights in accordance with this Section 3 which are
executed and delivered (whether or not the Common Shares evidenced thereby
were previously issued or are presented for transfer) by the Company
(including, without limitation, certificates representing reacquired Common
Shares
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referred to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to them a legend that by itself or together
with prior legends is substantially to the following effect:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in the Rights
Agreement between Storage Trust Realty (the "Company")
and ChaseMellon Shareholder Services, L.L.C., dated as of
August 7, 1998 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of the
Company. Under certain circumstances, as set forth in the
Rights Agreement, the Rights will be evidenced by
separate certificates and will no longer be evidenced by
this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly
after receipt of a written request therefor. Under
certain circumstances 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, shall become
null and void.
Until the Distribution Date, the Rights associated with the Common Shares
shall be evidenced by the certificates evidencing the associated Common
Shares alone (regardless of whether any such certificate contains the above
legend), and the transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as 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 or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such
number of one one-thousandths of a Preferred Share as shall be set forth
therein at the price per one one-thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
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(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that evidences Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any Associate or Affiliate of an
Acquiring Person) who becomes a transferee after the Acquiring Person
becomes an Acquiring Person, or (iii) a transferee of an Acquiring Person
(or of any Associate or Affiliate of an Acquiring Person) 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 to holders of equity interests
in such Acquiring Person or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or understanding, whether written
or oral, regarding the transferred Rights or (B) a transfer which is part
of a plan, arrangement or understanding, whether written or oral, which has
as a primary purpose or effect the avoidance of Section 7(e) hereof, and
any Right Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent
feasible and otherwise reasonably identifiable as such) the following
legend:
The Rights evidenced by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the
Rights evidenced hereby may become void in the
circumstances specified in Section 7(e) of such
Agreement.
The provisions of Section 7(e) shall apply whether or not any Right
Certificate actually contains the foregoing legend.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by the Chairman of
its Board of Trustees, its President or any of its Vice Presidents, or its
Secretary, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and 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 countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company
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; and 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.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Right Certificates issued
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hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its
face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Division, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Sections 4(b), 7(e), 14 and 24 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be
transferred, divided, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of Preferred Shares (or, following a Triggering Event, Common Shares
or other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, divide, combine or
exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, divided,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Right Certificate and the Company shall have been
provided with 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. Thereupon the Rights Agent shall,
subject to Sections 4 and 7 hereof, countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with
any transfer, division, combination or exchange of Right Certificates.
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 make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price with respect to each
surrendered Right for the total number of Preferred Shares (or Common
Shares or other securities
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or property, as the case may be) as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on August 7, 2008
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii)
the time at which such Rights are exchanged as provided in Section 24
hereof (the earliest to occur of the events described in (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $75.00, shall
be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate evidencing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side of the Right Certificate duly executed, accompanied by payment
of the Purchase Price for the Preferred Shares (or Common Shares or other
securities or property, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent of the Preferred Shares) certificates for the
number of Preferred Shares 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 Preferred Shares
issuable upon exercise of the Rights with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of
one one- thousandths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares evidenced 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)
when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may
be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue
other securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or property are available for distribution by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an
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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 an Acquiring Person or (iii)
a transferee of an Acquiring Person (or of any Associate or Affiliate of an
Acquiring Person) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming an Acquiring Person and receives such Rights
pursuant to either (x) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding, whether written or oral, regarding
the transferred Rights or (y) a transfer which the Board of Trustees
otherwise concludes in good faith is part of a plan, arrangement or
understanding, whether written or oral, which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void
without any further action, and any holder of such Rights shall thereupon
have no rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise, from and after the occurrence of
a Triggering Event. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) hereof are complied with, but
shall have no liability to any holder of Rights for the inability to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise shall have been
completed and signed by the registered holder thereof and the Company shall
have been provided with 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.
(g) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities), the number of Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer,
division, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation or
in 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 any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
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Section 9. Availability of Preferred Shares. The Company covenants
and agrees that it will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such
Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities), subject to payment of the Purchase
Price, be duly and validly authorized and issued and fully paid and
nonassessable.
The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or depositary
receipts for Preferred Shares (or Common Shares and/or other securities, as
the case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
shares or securities 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 applicable
transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares or securities on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books
of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any
rights of a holder of Preferred Shares (or Common Shares and/or other
securities, as the case may be) for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the
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outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D)
issue any of its shares in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving entity), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the
number and kind of shares issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number
and kind of shares which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par
value of the shares of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of a
Right, except as provided below and in Section 7(e) hereof, shall
thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common
Shares of the Company as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the
Rights.
(iii) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company may, in the
sole discretion of the Board of Trustees, elect to (and, in the
event that the Board of Trustees has not exercised the exchange
right contained in Section 24 hereof and there are not sufficient
issued but not outstanding and authorized but unissued Common
Shares to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Company shall) take all
such action as may be necessary to authorize, issue or pay, upon
the exercise of the Rights, cash (including by way of a reduction
of the Purchase Price), property, other securities or any
combination thereof having an aggregate value equal to the value
of the Common Shares of the Company which otherwise would have
been issuable pursuant to Section 11(a)(ii), which aggregate value
shall be determined by a majority of the Board of Trustees. For
purposes of the preceding
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sentence, the value of the Common Shares shall be determined
pursuant to Section 11(d) hereof and the value of any equity
securities which a majority of the Board of Trustees determines to
be equivalent to a Common Share (including the Preferred Shares,
in such ratio as the Board of Trustees shall determine) shall be
deemed to have the same value as the Common Shares. Any such
election by the Board of Trustees must be made and publicly
announced within 60 days following the date on which the event
described in Section 11(a)(ii) shall have occurred. Following the
occurrence of the event described in Section 11(a)(ii), a majority
of the Board of Trustees then in office may suspend the
exercisability of the Rights for a period of up to 60 days
following the date on which the event described in Section
11(a)(ii) shall have occurred to the extent that the Board of
Trustees has not determined whether to exercise the Company's
right of election under this Section 11(a)(iii). In the event of
any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of the Company
issuable upon exercise of one Right. In case such subscription price is
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Board of Trustees of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and on the holders of the Rights. Preferred Shares
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 in the event
that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
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(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving entity) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Trustees of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants attributable to one
Preferred Share and the denominator of which shall be such current per
share market price of the Preferred Shares; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
under Section 11(a)(iii) hereof, the "current per share market
price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for the purpose of any
computation under Section 11(a)(iii) hereof, the "current per
share market price" of a Security on any date shall be deemed to
be the average of the daily closing prices per share of such
Security for thirty (30) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
current per share market price of the Security is determined
during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into
such shares (other than the Rights), or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
"current per share market price" shall be appropriately adjusted
to reflect the current market price per share equivalent
(ex-dividend) of such Security. 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 Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price
-14-
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 Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected
by the Board of Trustees of the Company. If on any such date no
market maker is making a market in the Security, the fair value of
such Security on such date (as determined in good faith by the
Board of Trustees of the Company) shall be used. The term "Trading
Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of
the Common Shares of the Company as determined pursuant to Section
11(d)(i) (appropriately adjusted to reflect any share split, share
dividend or similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares of the
Company nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Trustees of
the Company, whose determination shall be described in a statement
filed with the Rights Agent.
(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, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth of
a Preferred Share or one ten-thousandth of any other share or security, as
the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the right to exercise
any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in this Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
-15-
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall entitle the holder
thereof to purchase, at the adjusted Purchase Price, the number of one
one-thousandths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter entitle the holder thereof to purchase, at the adjusted Purchase
Price, that number of one one-thousandths of a Preferred Share (calculated
to the nearest one one-millionth of a Preferred Share) obtained by (i)
multiplying (A) the number of one one-thousandths of a Preferred Share
covered by a Right immediately prior to such adjustment by (B) 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 substitution for
any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a Preferred Share for which a 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 one 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 hereof, the additional
Rights, if any, 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 shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one- thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number
of one
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one-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then par value,
if any, of the Preferred Shares issuable upon exercise of the Rights, the
Company shall take any action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(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 of the Preferred Shares and other securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and
other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ββββ 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 Shares, issuance wholly for cash of any Preferred Shares at less
than the current market price, issuance wholly for cash of Preferred Shares
or securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay
any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case (x) the number of one one-thousandths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-thousandths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (y) each Common Share
outstanding immediately after such event shall have issued with respect to
it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
-17-
(o) So long as the shares issuable upon the exercise of the Rights
may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(p) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the date of the expiration of the
Rights. The Company will also take such action as may be appropriate under
the blue sky laws of the various states. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability of
the Rights in order to prepare and file such registration statement or in
order to comply with such blue sky laws. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended.
(q) In the event that the Rights become exercisable following the
occurrence of a Triggering Event, the Company may permit the Rights,
subject to Section 7(e) hereof, to be exercised for 50% of the Common
Shares (or cash, property or other securities to be substituted for Common
Shares pursuant to Section 11(a)(iii)) that would otherwise be purchasable
under subsection (a) in consideration of the surrender to the Company of
the Rights so exercised and without other payment of the Purchase Price.
Rights exercised under this subsection (q) shall be deemed to have been
exercised in full and shall be canceled.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and may assume that no adjustment has been made unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) If after the Shares Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person, (y) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
entity of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its
-18-
Subsidiaries (taken as a whole) to any Person or Persons other than the
Company or one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the right
to receive, upon the exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
validly authorized and issued, fully paid, non-assessable and freely
tradeable common shares of the Principal Party (as hereinafter defined),
free and clear of all liens, rights of call or first refusal, encumbrances
or other adverse claims, as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable
(or, if such Right is not then exercisable for a number of one
one-thousandths of a Preferred Share, the number of such fractional shares
for which it was exercisable immediately prior to an event described under
Section 11(a)(ii) hereof) and dividing that product by (B) 50% of the then
current per share market price of the common shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, or otherwise, 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 and
(iv) such Principal Party shall take such steps (including, but not limited
to, the authorization and reservation of a sufficient number of its common
shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to
its common shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or
(y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Company
are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the surviving entity
of such merger or consolidation (including the Company if
applicable); and
(ii) in the case of any transaction described in (z) of
the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case described in clauses (b)(i) and
(b)(ii): (1) if the common shares of such Person are not at such time and
have 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 shares of which are and
have been so registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the common shares 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 shares having the greatest aggregate
market value; and (3) in case such Person is owned,
-19-
directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules
set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have sufficient
common shares authorized to permit the full exercise of the Rights and
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration statement
to (A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times meeting
the requirements of the Securities Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical
financial statements 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; and
(iii) take such actions as may be necessary or
appropriate under the blue sky laws of the various states.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that
one of the transactions described in this Section 13(a) shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there may be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price 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
-20-
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Trustees of the Company. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Trustees of the Company shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of
one one-thousandth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided,
that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-thousandth of a Preferred Share, the
Company may, to the extent necessary to reduce such fraction to an integral
multiple of one one-thousandth, pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one one-thousandth of a Preferred Share. For the purposes of this Section
14(b), the current market value of one one-thousandth of a Preferred Share
shall be one one-thousandth of the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise of
the Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one Common Share. For purposes of this
Section 14(c), the current market value of one Common Share shall be the
closing price of one Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(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 provided above).
-21-
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
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 the Common
Shares;
(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 of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or any 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.
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Section 17. Right Certificate Holder Not Deemed a Shareholder. 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 Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
trustees or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any trust action, or to receive
notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against any
claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares
or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any Person resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any Person succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, that such Person would
be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the
-23-
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.
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 imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for any and all losses, liabilities, costs, damages
and expenses (including attorneys' fees) arising out of or in connection
with the Rights Agent's gross negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of the action.
(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.
-24-
(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(e) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after receipt of a certificate
furnished pursuant to Section 12 describing a change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or Common Shares will,
when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all 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, any Vice President, the Secretary
or the Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall
not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying
the action to be taken or omitted.
(h) The Rights Agent and any stockholder, Trustee, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or its Subsidiaries or become pecuniarily
interested in any transaction in which the Company or its Subsidiaries may
be interested, or contract with or lend money to the Company or its
Subsidiaries or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or its Subsidiaries
or for any other legal entity.
-25-
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
the Common Shares or Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days
after 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 registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be (A) a corporation or bank organized and doing business
under the laws of the United States or of any other state of the United
States, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million or (B)
an affiliate of such a corporation described in subparagraph (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 Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
-26-
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Trustees to reflect
any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Company may, at its option, at any time prior to such time
as any Person becomes an Acquiring Person, redeem all but not less than all
of the then outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). The redemption of
the Rights by the Company may be made effective at such time, on such basis
and with such conditions as the Board of Trustees in its sole discretion
may establish. The Company may, at its option, pay the Redemption Price in
cash, Common Shares (based on the current per share market price of the
Common Shares at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Trustees.
(b) Immediately upon the action of the Board of Trustees of the
Company ordering the redemption of the Rights (or at the effective time of
such redemption established by the Board of Trustees of the Company
pursuant to the next-to-last sentence of paragraph (a) of this Section 23),
and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within 10 days after such
action of the Board of Trustees ordering the redemption of the Rights or,
if later, the effectiveness of the redemption of the Rights pursuant to the
next-to-last sentence of paragraph (a), the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. 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. The Company may, at its
option, discharge all of its obligations with respect to the Rights by (i)
issuing a press release announcing the manner of redemption of the Rights,
(ii) depositing with a bank or trust company having a capital and surplus
of at least $100,000,000, funds necessary for such redemption, in trust, to
be applied to the redemption of the Rights so called for redemption and
(iii) arranging for the mailing of the Redemption Price to the registered
holders of the Rights; then, and upon such action, all outstanding Rights
Certificates shall be null and void without further action by the Company.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23, in Section 24 hereof,
or in connection with the purchase of Common Shares prior to the
Distribution Date.
-27-
Section 24. Exchange.
(a) The Company may, at its option, at any time after a Triggering
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any share
split, share dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Company shall not be empowered
to effect such exchange at any time after any Person (other than the
Company, any Affiliate or Subsidiary of the Company, any employee benefit
plan of the Company or of any Affiliate or Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Trustees of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares
or Preferred Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated
-28-
in accordance with this Section 24, the Company shall take all such action
as may be necessary to authorize additional Common Shares or Preferred
Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to
the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (e), the current market value of
a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose at any time after the
Distribution Date (i) to pay any dividend payable in shares of any class to
the holders of its Preferred Shares or to make any other distribution to
the holders of its Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares
or to effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such share dividend, or distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
-29-
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Storage Trust Realty
ββββ βββββββββ ββββββ
ββββββββ, ββββββββ βββββ
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or
by the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
ββ ββββββββββ ββββ
ββββββββ ββββββ
ββββββββββ ββββ, βββ ββββββ βββββ
Attention: Client Administration
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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights (including, without limitation,
changes to the Purchase Price) which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect
the interests of the holders of Rights.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the
sole and exclusive
-30-
benefit of the Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Common
Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Maryland and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State, except that
those provisions of this Agreement affecting the rights, duties and
responsibilities of the Rights Agent shall be governed by and construed in
accordance with the law of the State of New York.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Determinations and Actions by the Board of Trustees.
The Board of Trustees of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Trustees or the Company or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (a) interpret the provisions of
this Agreement, and (b) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, interpretations and determinations
(including, for purpose of clause (b) above, all omissions with respect to
the foregoing) which are done or made by the Trustees in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (y) not
subject the Trustees to any liability to the holders of the Right
Certificates.
-31-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the day and year first above
written.
STORAGE TRUST REALTY
By /s/ ββββββ β. ββββββ
------------------------------------
ββββββ β. ββββββ
Chairman
Attest:
By /s/ βββββ β. βββ βββββ
--------------------------------
Name: βββββ β. βββ βββββ
Title: Assistant Secretary
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By /s/ βββββ βββββ
--------------------------------
βββββ βββββ
Assistant Vice President
Attest:
By /s/ ββββ ββββββ
---------------------------------
Name: ββββ ββββββ
Title: Assistant Secretary
-32-
Exhibit A
----------
STORAGE TRUST REALTY
FORM OF
ARTICLES SUPPLEMENTARY
SERIES A JUNIOR
PARTICIPATING PREFERRED SHARES
Storage Trust Realty, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and
Taxation of Maryland pursuant to Section 8- 203(b) of the Annotated Code of
Maryland (the "Code") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Declaration of Trust of the Company, the Board of Trustees, as required by
Section 8-203(b) of the Code, at a meeting duly called and held on August
7, 1998, has classified 150,000 unissued shares of the Company as Series A
Junior Participating Preferred Shares, with the following preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions
of redemption, which upon any restatement of the Declaration of Trust shall
be made part of Article 2 of the Declaration, with any necessary or
appropriate changes to the enumeration and lettering hereof:
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
Section 1. Designation and Amount. There shall be a series of
preferred shares of the Company, $0.01 par value per share, which shall be
designated "Series A Junior Participating Preferred Shares" (the "Series A
Preferred Shares"), and the number of shares constituting that series shall
be 150,000. Such number of shares may be increased or decreased by
resolution of the Board of Trustees and by the filing of articles
supplementary in accordance with the provisions of Title 8 of the
Corporations and Associations Code of the State of Maryland stating that
such increase or reduction has been so authorized; provided, however, that
no decrease shall reduce the number of Series A Preferred Shares to a
number less than the number of Series A Preferred Shares then outstanding
plus the number of Series A Preferred Shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Company.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any class or series of preferred shares of the Company ranking
prior and superior to the Series A Preferred Shares with respect to
dividends, the holders of Series A Preferred Shares shall be entitled to
receive, when, as and if authorized by the Board of Trustees out of funds
legally available for the purpose, quarterly dividends payable in cash to
holders of record on the last Business Day of January, April, July and
October in each year (each such date being referred to herein as a
-1-
"Quarterly Dividend Payment Date") (commencing on the first Quarterly
Dividend Payment Date after the first issuance of a Series A Preferred
Share or fraction thereof) in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in Common Shares (hereinafter defined) or a
subdivision of the outstanding Common Shares (by a reclassification or
otherwise), authorized on the common shares of beneficial interest, par
value $0.01 per share, of the Company (the "Common Shares") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
Series A Preferred Share or fraction thereof. In the event the Company
shall at any time following August 21, 1998 (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount to which holders of
Series A Preferred Shares were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying
each such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator
of which is the number of Common Shares that were outstanding immediately
prior to such event.
(B) The Company shall declare a dividend or distribution on the
Series A Preferred Shares as provided in paragraph (A) above at the time it
declares a dividend or distribution on the Common Shares (other than a
dividend payable in Common Shares).
(C) No dividend or distribution (other than a dividend or
distribution payable in Common Shares) shall be paid or payable to the
holders of Common Shares unless, prior thereto, all accrued but unpaid
dividends to the date of that dividend or distribution shall have been paid
to the holders of Series A Preferred Shares.
(D) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Shares from the Quarterly Dividend Payment
Date next preceding the date of issuance of such Series A Preferred Shares,
unless the date of issuance of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue and be cumulative from the date of issuance of
such shares, or unless the date of issuance is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
Series A Preferred Shares entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Series A Preferred Shares in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by- share basis among
all such shares at the time outstanding. The Board of Trustees may fix a
record date for the determination of holders of Series A Preferred Shares
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for
the payment thereof.
-2-
Section 3. Voting Rights. The holders of Series A Preferred Shares
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each one one-thousandth of a Series A Preferred Share shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
shareholders of the Company. In the event the Company shall at any time
following August 21, 1998 (i) declare any dividend on Common Shares payable
in Common Shares, (ii) subdivide the outstanding Common Shares or (iii)
combine the outstanding Common Shares into a smaller number of shares, then
in each such case the number of votes per share to which holders of Series
A Preferred Shares were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of Common Shares outstanding immediately after such event and
the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, the holders of Series A
Preferred Shares and the holders of Common Shares and any other shares of
beneficial interest of the Company having general voting rights shall vote
together as one class on all matters submitted to a vote of shareholders of
the Company.
(C) (i) Whenever, at any time or times, dividends payable on any
Series A Preferred Shares shall be in arrears in an amount equal
to at least six full quarterly dividends (whether or not declared
and whether or not consecutive), the holders of record of the
outstanding Series A Preferred Shares shall have the exclusive
right, voting separately as a single class, to elect two Trustees
of the Company at a special meeting of shareholders of the Company
or at the Company's next annual meeting of shareholders, and at
each subsequent annual meeting of shareholders, as provided below.
At elections for such Trustees, the holders of Series A Preferred
Shares shall be entitled to cast one vote for each one
one-thousandth of a Series A Preferred Share held, subject to
adjustment.
(ii) Upon the vesting of such right of the holders of the
Series A Preferred Shares, the maximum authorized number of
members of the Board of Trustees shall automatically be increased
by two and the two vacancies so created shall be filled by vote of
the holders of the outstanding Series A Preferred Shares as
hereinafter set forth. A special meeting of the shareholders of
the Company then entitled to vote shall be called by the Chairman,
the President, any Senior Vice President or the Secretary of the
Company, if requested in writing by the holders of record of not
less than 10% of the Series A Preferred Shares then outstanding.
At such special meeting, or, if no such special meeting shall have
been called, then at the next annual meeting of shareholders of
the Company, the holders of the Series A Preferred Shares shall
elect, voting as above provided, two Trustees of the Company to
fill the aforesaid vacancies created by the automatic increase in
the number of members of the Board of Trustees. At any and all
such meetings for such election, the holders of a majority of the
outstanding Series A Preferred Shares shall be necessary to
constitute a quorum for such election, whether present in person
or by proxy, and such two Trustees shall be elected by the vote of
at least a plurality of shares held by such shareholders present
-3-
represented at the meeting. Any Trustee elected by holders of
Series A Preferred Shares pursuant to this Section may be removed
at any annual or special meeting, by vote of the holders of a
majority of the shares of Series A Preferred Stock then
outstanding, voting as a single class, with or without cause. In
case any vacancy shall occur among the Trustees elected by the
holders of the Series A Preferred Shares pursuant to this Section,
such vacancy may be filled by the remaining Trustee so elected, or
his successor then in office, and the Trustee so elected to fill
such vacancy shall serve until the next meeting of shareholders
for the election of Trustees. After the holders of the Series A
Preferred Shares shall have exercised their right to elect
Trustees in any default period and during the continuance of such
period, the number of Trustees shall not be further increased or
decreased except by vote of the holders of Series A Preferred
Shares as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A
Preferred Shares.
(iii) The right of the holders of the Series A Preferred
Shares, voting separately as a class, to elect two members of the
Board of Trustees of the Company as aforesaid shall continue
until, and only until, such time as all arrears in dividends
(whether or not declared) on the Series A Preferred Shares shall
have been paid or declared and set apart for payment, at which
time such right shall terminate, except as herein or by law
expressly provided, subject to revesting in the event of each and
every subsequent default of the character above-mentioned. Upon
any termination of the right of the holders of the Series A
Preferred Shares as a class to vote for Trustees as herein
provided, the term of office of all Trustees then in office
elected by the holders of Series A Preferred Shares pursuant to
this Section shall terminate immediately. Whenever the term of
office of the Trustees elected by the holders of the Series A
Preferred Shares pursuant to this Section shall terminate and the
special voting powers vested in the holders of the Series A
Preferred Shares pursuant to this Section shall have expired, the
maximum number of members of the Board of Trustees of the Company
shall be such number as may be provided for in the Bylaws of the
Company irrespective of any increase made pursuant to the
provisions of this Section.
(D) Except as otherwise provided herein or required by law,
holders of Series A Preferred Shares shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Shares as provided herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever any quarterly dividends or other dividends or
distributions payable on the Series A Preferred Shares as provided in
Section 2 are in arrears, then, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on Series A Preferred
Shares outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares ranking junior (either as to
-4-
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Shares, other than dividends paid or payable in
such junior shares;
(ii) declare or pay dividends on or make any other
distributions on any shares ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Shares, except dividends paid ratably on the
Series A Preferred Shares and all such parity shares on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A
Preferred Shares, provided that the Company may at any time
redeem, purchase or otherwise acquire any such parity shares in
exchange for shares of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any
Series A Preferred Shares, except in accordance with a purchase
offer made in writing or by publication (as determined by the
Board of Trustees) to all holders of such shares upon such terms
as the Board of Trustees, after consideration of the respective
annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of the Company
unless the Company could, under paragraph (A) of this Section, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Series A Preferred Shares
purchased or otherwise acquired by the Company in any manner whatsoever
shall become authorized but unissued shares of beneficial interest and may
be reissued as Common Shares or as part of a new series of preferred shares
to be created by resolution or resolutions of the Board of Trustees,
subject to the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
voluntary liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Shares unless, prior thereto, the holders of Series A
Preferred Shares shall have received $1.00 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the
holders of Series A Preferred Shares unless, prior thereto, the holders of
Common Shares shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as
-5-
appropriately adjusted as set forth in subparagraph C below to reflect such
events as share splits, share dividends and recapitalizations with respect
to the Common Shares) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding Series A Preferred Shares and Common Shares, respectively,
holders of Series A Preferred Shares and holders of Common Shares shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio, on a per share basis, of the Adjustment Number to
1 with respect to such Series A Preferred Shares and Common Shares, on a
per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred shares, if
any, which rank on a parity with the Series A Preferred Shares, then such
remaining assets shall be distributed ratably to the holders of the Series
A Preferred Shares and such parity shares in proportion to their respective
liquidation preferences.
(C) In the event the Company shall at any time following August
21, 1998 (i) declare any dividend on Common Shares payable in Common
Shares, (ii) subdivide the outstanding Common Shares or (iii) combine the
outstanding Common Shares into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common
Shares that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Company shall
enter into any consolidation, merger, combination or other transaction in
which the Common Shares are exchanged for or changed into other shares or
securities, cash and/or any other property, then in any such case, the
Series A Preferred Shares shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of shares,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each Common Share is exchanged or changed.
In the event the Company shall at any time (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of Series A
Preferred Shares shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
Section 8. Redemption. The Series A Preferred Shares shall not be
redeemable by the Company. The preceding sentence shall not limit the
ability of the Company to purchase or otherwise deal in such shares to the
extent permitted by law.
-6-
Section 9. Ranking. The Series A Preferred Shares shall rank
junior to all other series of the Company's preferred shares (whether with
or without par value) as to the payment of dividends and the distribution
of assets, unless the terms of any such series shall provide otherwise.
Section 10. Amendment. Neither the Company's Declaration of Trust
nor any Articles Supplementary relating to the Series A Preferred Shares
shall be amended in any manner which would materially and adversely alter
or change the preferences, rights or other terms of the Series A Preferred
Shares without the affirmative vote of the holders of a majority or more of
the outstanding Series A Preferred Shares, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Shares may be
issued in fractions of a share that are integral multiples of one-one
thousandth of a share, which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends and participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Shares.
SECOND: These Articles Supplementary have been approved by the Board
of Trustees in the manner and by the vote required by law.
THIRD: The undersigned Chairman of the Board acknowledges these
Articles Supplementary to be the act of the Company and, as to all matters
or facts required to be verified under oath, such officer acknowledges that
to the best of his knowledge, information and belief, these matters and
facts are true in all material respects and that this statement is made
under the penalties for perjury.
-7-
IN WITNESS WHEREOF, these Articles Supplementary have been duly
executed by the undersigned officer this ____ day of August, 1998.
STORAGE TRUST REALTY
By:______________________________________
Name:
Title:
-8-
Exhibit B
---------
[Form of Right Certificate]
Certificate No. R- ______Rights
NOT EXERCISABLE AFTER AUGUST 7, 2008 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE EXCHANGED OR REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]*
Right Certificate
STORAGE TRUST REALTY
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the
Rights Agreement, dated as of August 7, 1998 (the "Rights Agreement"),
between Storage Trust Realty, a Maryland real estate investment trust (the
"Company"), and ChaseMellon Shareholder Services, L.L.C. (the "Rights
Agent") to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00
p.m. (Eastern time) on August 7, 2008 or notice of redemption or exchange
at the office of the Rights Agent (or its successors as Rights Agent)
designated for such purpose, one one-thousandth of a fully paid,
non-assessable Series A Junior Participating Preferred
-----------------------
The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding sentence.
-1-
Share (a "Preferred Share") of the Company, at a purchase price of $75.00
per one one-thousandth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the appropriate
Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
Preferred Shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per Preferred Share set forth above, are the
number and Purchase Price as of August 7, 1998, based on the Preferred
Shares as constituted at such date. Capitalized terms not defined in this
Right Certificate that are defined in the Rights Agreement shall have the
meanings ascribed to them in the Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights evidenced
by this Right Certificate are beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person, (ii) under
certain circumstances specified in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person
who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void
and no holder hereof shall have any right with respect to such Rights from
and after the occurrence of any such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of Preferred Shares or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under certain circumstances
specified in such Rights Agreement. Copies of the Rights Agreement are on
file at the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal corporate trust office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of Preferred Shares as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $0.01 per Right at any time prior to the earlier
of (i) such time as any Person becomes an Acquiring Person or (ii) the
Close of Business on the Final Expiration Date.
-2-
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which may,
at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of trustees or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
trust action, or, to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its seal.
Dated as of ________ __, __
STORAGE TRUST REALTY
By:__________________________
Name:
Title:
Attest: (SEAL)
--------------------------
Name:
Title:
-3-
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: ________________________________
Authorized Signature
-4-
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED ______________________________________ hereby sells, assigns
and transfers unto_________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Attorney, to
transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Date:____________________,__ ________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate o is o is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
o did o did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Date:___________________,__ __________________________________________
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
-1-
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires
to exercise Rights evidenced by the
Right Certificate.)
To: STORAGE TRUST REALTY
The undersigned hereby irrevocably elects to exercise Rights
evidenced by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the
name of:
Please insert social security or other identifying number:
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:_________________________________________
_________________________________________________________________
(Please print name and address)
Date:_______________________, __ ___________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate o are o are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it o did o did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:_________________, __ ___________________________________
Signature
NOTICE
------
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.