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RIGHTS AGREEMENT
dated as of April 3, 1998
by and between
▇▇▇▇ & ▇▇▇▇▇▇, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
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TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions....................................................1
Section 2. Appointment of Rights Agent............................................5
Section 3. Issuance of Rights Certificates........................................5
Section 4. Form of Right Certificates.............................................7
Section 5. Countersignature and Registration......................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates...........................................................8
Section 7. Exercise of Rights.....................................................9
Section 8. Cancellation and Destruction of Right Certificates....................10
Section 9. Reservation and Availability of Capital Stock.........................11
Section 10. Securities Record Date................................................11
Section 11. Adjustment of Exercise Price, Number of Shares Issuable
Upon Exercise of Rights or Number of Rights...........................12
Section 12. Certificate of Adjusted Exercise Price or Number of
Shares Issuable Upon Exercise of Rights...............................17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.........................................................17
Section 14. Fractional Rights and Fractional Shares...............................20
Section 15. Rights of Action......................................................20
Section 16. Agreement of Right Holders............................................21
Section 17. Right Holder and Right Certificate Holder Not Deemed a
Stockholder...........................................................21
Section 18. Concerning the Rights Agent...........................................21
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.................................................................22
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Section 20. Duties of Rights Agent................................................23
Section 21. Change of Rights Agent................................................25
Section 22. Issuance of New Right Certificates....................................26
Section 23. Redemption of Rights..................................................26
Section 24. Exchange of Rights....................................................27
Section 25. Notice of Certain Events..............................................28
Section 26. Notices...............................................................28
Section 27. Supplements and Amendments............................................29
Section 28. Certain Covenants.....................................................30
Section 29. Successors............................................................30
Section 30. Benefits of this Agreement............................................30
Section 31. Severability..........................................................30
Section 32. Governing Law.........................................................31
Section 33. Counterparts..........................................................31
Section 34. Descriptive Headings..................................................31
Exhibit A -- Form of Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock
Exhibit B -- Form of Right Certificate
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TABLE OF DEFINED TERMS
Term Defined Page Section
------------ ---- -------
Adjustment Shares 12 11(a)(ii)
Affiliate 1 1
Agreement 1 Introduction
Associate 1 1
Beneficial Owner 1 1
Beneficially Own 1 1
Business Day 2 1
Close of Business 2 1
Closing Price 2 1
Common Share 3 1
Common Share Equivalent 3 11(a)(iii)
Company (▇▇▇▇ & Talbot, Inc.) 1 Introduction
Company (following a Section 13(a) Event) 18 13(a)(iii)
Current Market Price 3 1
Distribution Date 3 3(a)
Exchange Act 3 1
Exchange Ratio 26 24(a)
Exempt Person 3 1
Exercise Price 3 7(c)
Expiration Date 3 1
15% Ownership Date 4 1
15% Stockholder 4 1
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TABLE OF DEFINED TERMS
(continued)
Term Defined Page Section
------------ ---- -------
NASDAQ 2 1
Person 3 1
Preferred Share 3 1
Preferred Share Equivalent 4 11(b)
Record Date 1 Recital
Redemption Date 4 1
Redemption Price 4 23(a)
Right 1 Recital
Right Certificate 4 1
Rights Expiration Date 4 Introduction
Rights Agent 1 Introduction
Section 11(a)(ii) Event 4 11(a)(ii)
Section 13(a) Event 4 13(a)
Securities Act 4 1
Subsidiary 4 1
Surviving Person 17 13(a)
Trading Day 5 1
Unavailable Adjustment Shares 13 11(a)(iii)
Unavailable Exchange Shares 27 24(c)
Voting Share 5 1
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RIGHTS AGREEMENT
This Rights Agreement (the "Agreement") is made and entered into as of
April 3, 1998, by and between ▇▇▇▇ & ▇▇▇▇▇▇, INC., a Delaware corporation (the
"Company"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey limited
liability company (the "Rights Agent").
WHEREAS, the Board of Directors 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 at the Close of
Business (as hereinafter defined) on April 24, 1998 (the "Record Date"), each
Right representing the right to purchase one one-hundredth of a Preferred Share
(as hereinafter defined), upon the terms and subject to the conditions set forth
herein, and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date or the
Expiration Date (as such terms are hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect on
the date hereof.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "Beneficially Own" any securities:
(i) that such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated under the
Exchange Act, in each case as in effect on the date hereof;
(ii) that such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately, or only after the passage of time, compliance with
regulatory requirements, the fulfillment of a condition or otherwise)
pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights (other than these
Rights), 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 offer 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;
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(iii) that such Person or any such Person's Affiliates or
Associates has the right to vote, whether alone or in concert with
others, pursuant to any agreement, arrangement or understanding,
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 (A) arises solely
from a revocable proxy given to such Person or any of such Person's
Affiliates or Associates in response to a public proxy solicitation made
pursuant to and in accordance with the applicable rules and regulations
promulgated under the Exchange Act, and (B) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report);
(iv) that are Beneficially Owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (other than voting pursuant to a
revocable proxy as described in the proviso to clause (iii) of this
definition of "Beneficial Owner") or disposing of any securities of the
Company; and
(v) that, on any day on or after the Distribution Date, evidence
Rights that prior to such date were represented by certificates for
Common Shares that such Person Beneficially Owns on such day.
Notwithstanding anything to the contrary in this Section l(b), a Person engaged
in business as an underwriter of securities shall not be deemed to be the
Beneficial Owner of, or to Beneficially Own, any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the States of California or New Jersey are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m., California
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day,
it shall mean 5:00 p.m., California time, on the next succeeding Business Day.
"Closing Price" of a stock or other security on any day shall be the
last sale price, regular way, per share of such stock or unit of such other
security on such day 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 such stock or other 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 such stock or other security is listed or admitted
to trading or, if such stock or other security is 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 on the Nasdaq National Market ("NASDAQ") or such other
system then in use or, if on any such date such stock or other
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security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker that makes a market
in such stock or other security and that is selected by the Board of Directors
of the Company.
"Common Share" shall mean one share of the Common Stock, par value $1.00
per share, of the Company, unless used with reference to a Person other than the
Company, in which case it shall mean one share of each class of stock of such
Person having the right to vote generally in the election of directors or, if
such Person is a Subsidiary of another Person, one Common Share of the Person
that ultimately controls such Person.
"Common Share Equivalent" shall have the meaning ascribed to it in
Section 11(a)(iii) hereof.
"Current Market Price" per share of a stock or unit of any other
security on any date shall mean the average of the daily Closing Prices of such
stock or other security for the 30 consecutive Trading Days through and
including the Trading Day immediately preceding the date in question; PROVIDED,
HOWEVER, that if any event shall have caused the Closing Price on any Trading
Day during such 30-day period not to be fully comparable with the Closing Price
on the date in question (or, if no Closing Price is available on the date in
question, on the Trading Day immediately preceding the date in question), then
each such non-comparable Closing Price so used shall be appropriately adjusted
by the Board of Directors in order to make the Closing Price on each Trading Day
during the period used for the determination of the Current Market Price fully
comparable with the Closing Price on such date in question (or, if applicable,
the immediately preceding Trading Day). "Current Market Price" per share of any
stock or unit of such other security that is not publicly held or so listed or
traded, and "Current Market Price" of any other property, shall mean the fair
value per share of such stock or unit of such other security, or the fair value
of such other property, respectively, as determined in good faith by the Board
of Directors of the Company based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.
"Distribution Date" shall have the meaning ascribed to it in Section 3
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exempt Person" shall mean the Company, any wholly-owned Subsidiary of
the Company, any employee benefit plan of the Company or of a Subsidiary of the
Company and any Person holding Voting Shares for or pursuant to the terms of any
such employee benefit plan.
"Exercise Price" shall have the meaning ascribed to it in Section 7(c)
hereof.
"Expiration Date" shall mean the Close of Business on April 24, 2008.
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company association, group (as such term is used in Rule 13d-5
promulgated under the Exchange
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Act as in effect on the date hereof) or other entity, and shall include any
successor (by merger or otherwise) of such entity.
"Preferred Share" shall mean one share of the Series A Junior
Participating Preferred Stock, par value $10.00 per share, of the Company, which
shall have the rights and preferences set forth in the Certificate of
Designation for the Preferred Shares substantially in the form of EXHIBIT A
hereto.
"Preferred Share Equivalent" shall have the meaning ascribed to it in
Section 11(b) hereof.
"Record Date" shall have the meaning ascribed to it in the recitals
hereto.
"Redemption Date" shall mean the date of the action of the Board of
Directors of the Company authorizing and directing the redemption of the Rights
pursuant to Section 23(a) hereof or the exchange of the Rights pursuant to
Section 24(a) hereof.
"Redemption Price" shall have the meaning ascribed to it in Section
23(a) hereof.
"Right Certificate", as that term is used with respect to any period
prior to the Distribution Date, shall have the meaning ascribed to it in Section
3(b) hereof, and, as that term is used with respect to any period on or after
the Distribution Date, shall have the meaning ascribed to it in Section 3(c)
hereof.
"Rights Expiration Date" shall mean the Expiration Date, except if there
has been a Distribution Date, then it shall mean the tenth anniversary of the
Distribution Date.
"Section 11(a)(ii) Event" shall have the meaning ascribed to it in
Section 11(a)(ii) hereof.
"Section 13(a) Event" shall have the meaning ascribed to it in Section
13(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" of any Person shall mean any corporation or other Person of
which equity securities or equity interests representing a majority of the
voting power are owned, directly or indirectly, or which is effectively
controlled, by such Person.
"15% Ownership 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) of the Exchange Act) by the Company or a
15% Stockholder containing the facts by virtue of which a Person has become a
15% Stockholder.
"15% Stockholder" shall mean any Person that Beneficially Owns 15% or
more of the Voting Shares of the Company then outstanding; PROVIDED, HOWEVER,
that the term "15% Stockholder" shall not include: (i) an Exempt Person; (ii)
any Person that would not otherwise be a 15% Stockholder but for a reduction in
the number of outstanding Voting Shares resulting from a stock repurchase
program or other similar plan of the Company or from a self
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tender offer of the Company, which plan or tender offer commenced on or after
the date hereof; PROVIDED, HOWEVER, that the term "15% Stockholder" shall
include such Person from and after the first date upon which (A) such Person,
since the date of the commencement of such plan or tender offer, shall have
acquired Beneficial Ownership of, in the aggregate, a number of Voting Shares of
the Company equal to 1% or more of the Voting Shares of the Company then
outstanding and (B) such Person, together with all Affiliates and Associates of
such Person, shall Beneficially Own 15% or more of the Voting Shares of the
Company then outstanding; or (iii) any Person that would not otherwise be a 15%
Stockholder but for its Beneficial Ownership of Rights. In calculating the
percentage of the outstanding Voting Shares that are Beneficially Owned by a
Person for purposes of this definition, Voting Shares that are Beneficially
Owned by such Person shall be deemed outstanding, and Voting Shares that are not
Beneficially Owned by such Person and that are subject to issuance upon the
exercise or conversion of outstanding conversion rights, exchange rights,
rights, warrants or options shall not be deemed outstanding. Any determination
made by the Board of Directors of the Company as to whether any Person is or is
not a 15% Stockholder shall be conclusive and binding upon all holders of
Rights.
"Trading Day" shall mean, as to any stock or other security, a day on
which the principal national securities exchange on which such stock or other
security is listed or admitted to trading is open for the transaction of
business or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, a Business Day.
"Voting Share" shall mean (i) a Common Share of the Company and (ii) any
other share of capital stock of the Company entitled to vote generally in the
election of directors or entitled to vote together with the Common Shares in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. References in this
Agreement to a percentage or portion of the outstanding Voting Shares shall be
deemed a reference to the percentage or portion of the total votes entitled to
be cast by the holders of the outstanding Voting Shares.
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.
Section 3. Issuance of Rights Certificates.
(a) "Distribution Date" shall mean the date, after the date hereof, that
is the earliest of (i) the tenth Business Day (or such later day as shall be
designated by the Board of Directors of the Company) following the date of the
commencement of, or the first public announcement of the intent of any Person,
other than an Exempt Person, to commence a tender offer or exchange offer, the
consummation of which would cause any Person to become a 15% Stockholder, (ii)
the date of the first Section 11(a)(ii) Event or (iii) the date of the first
Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be represented by
certificates for Common Shares (all of which certificates for Common Shares
shall be deemed to be Right Certificates) and not by separate Right
Certificates, (ii) the record holder of the Common Shares
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represented by each of such certificates shall be the record holder of the
Rights represented thereby and (iii) the Rights shall be transferable only in
connection with the transfer of Common Shares. Until the earliest of the
Distribution Date, the Redemption Date or the Expiration Date, the surrender for
transfer of such certificates for Common Shares shall also constitute the
surrender for transfer of the Rights represented thereby.
(c) As soon as practicable after the Distribution Date, and after
notification by the Company to the Rights Agent accompanied by a shareholder
list prepared by the transfer agent of the Common Shares, the Rights Agent shall
send, at the expense of the Company, by first-class, 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 substantially in the form of EXHIBIT B hereto
representing one Right for each Common Share so held. From and after the
Distribution Date, the Rights shall be represented solely by such Right
Certificates and may only be transferred by the transfer of such Right
Certificates, and the holders of such Right Certificates, as listed in the
records of the Company or any transfer agent or registrar for such Rights, shall
be the record holders of such Rights.
(d) Certificates for Common Shares issued at any time after the Record
Date and prior to the earliest of the Distribution Date, the Redemption Date or
the Expiration Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of April 3,
1998 by and between ▇▇▇▇ & ▇▇▇▇▇▇, Inc. and ChaseMellon Shareholder
Services, L.L.C., , as Rights Agent (the "Rights Agreement"), as amended
to date, the terms and conditions of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of ▇▇▇▇ & Talbot, Inc. Under certain circumstances
specified in the Rights Agreement, such Rights will be represented by
separate certificates and will no longer be represented by this
certificate. Under certain circumstances specified in the Rights
Agreement, Rights beneficially owned by certain persons may become null
and void. ▇▇▇▇ & ▇▇▇▇▇▇, Inc. will mail to the record holder of this
certificate a copy of the Rights Agreement without charge promptly
following receipt of a written request therefor. As described in the
Rights Agreement, Rights Beneficially Owned by any Person who becomes a
15% Stockholder or any Affiliate or Associate of a 15% Stockholder (as
such capitalized terms are defined in the Rights Agreement) shall become
null and void.
(e) Certificates for Common Shares issued at any time on or after the
Distribution Date and prior to the earlier of the Redemption Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate does not represent any Right issued pursuant to the
terms of a Rights Agreement dated as of April 3, 1998 by and between
▇▇▇▇ & Talbot, Inc. and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent.
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(f) In the event that at any time on or after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Expiration Date, the
Company shall issue any Common Shares pursuant to the exercise of conversion
rights, exchange rights, rights (other than Rights), warrants or options that
shall have been issued or granted prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event, then,
unless the Board of Directors of the Company shall have provided otherwise at
the time of the issuance or grant of such conversion rights, exchange rights,
rights (other than Rights), warrants or options, the Rights Agent shall, as soon
as practicable after the Rights Agent receives notice thereof accompanied by a
shareholders list, the Rights Agent shall send by first-class, postage-prepaid
mail to the record holder of such Common Shares, at the address of such holder
as shown on the records of the Company, a Right Certificate substantially in the
form of Exhibit B hereto representing one Right for each Common Share so issued.
(h) Notwithstanding the foregoing provisions of this Section 3, the
Rights Agent shall not send any Right Certificate to any Person identified by
the Company as being a 15% Stockholder or an Affiliate or Associate of a 15%
Stockholder or to any Person if the Rights held by such Person are identified by
the Company as being Beneficially Owned by a 15% Stockholder or any of its
Affiliates or Associates. Any determination made by the Board of Directors of
the Company as to whether any Common Shares are or were Beneficially Owned at
any time by a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder
shall be conclusive and binding upon all holders of Rights.
Section 4. Form of Right Certificates.
The Right Certificates and the form of assignment, including
certificate, and the form of election to purchase, including certificate,
printed on the reverse thereof, when, as and if issued, shall be substantially
in the form of Exhibit B hereto, and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement (which legends, summaries or endorsements shall not affect the
duties or responsibilities of the Rights Agent hereunder), 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 upon which the
Rights or the securities of the Company issuable upon exercise of the Rights may
from time to time be listed, or to conform to usage. Subject to Section 22
hereof, Right Certificates, whenever issued, that are issued in respect of
Common Shares that were issued and outstanding as of the Close of Business on
the Distribution Date, shall be dated as of the Distribution Date.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive
Officer or President or any Vice President, either manually or by facsimile
signature, and may have affixed thereto the Company's seal or a facsimile
thereof attested by its Secretary or any Assistant Secretary, either manually or
by facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
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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 may nevertheless 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. Any Right Certificate may be signed on behalf of the Company by
any Person who at the actual date of such execution shall be a proper officer of
the Company to sign such Right Certificate, even though such Person was not such
an officer at the date of the execution of this Agreement.
(b) Following the Distribution Date and receipt by the Rights Agent of
the notice and shareholders list referred to in Section 3(c) hereof, the Rights
Agent shall keep or cause to be kept at its offices designated pursuant to
Section 26 hereof books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of Right Certificates, the number of Rights represented on
its face by each Right Certificate and the date of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and so long as
the Rights represented thereby remain outstanding, any one or more Right
Certificates may be transferred, split-up, combined or exchanged for one or more
Right Certificates representing the same aggregate number of Rights as the Right
Certificates surrendered. Any registered holder desiring to transfer, split up,
combine or exchange one or more Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent with the form of assignment, including certificate, on the
reverse side thereof completed and duly executed, with signature guaranteed.
Thereupon, the Rights Agent shall countersign and deliver to the Person entitled
thereto one or more Right Certificates, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates and the Rights Agent shall have no duty or obligation under
this Section 6(a) unless and until it is satisfied that any such sum has been
paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
such Right Certificate if mutilated, the Company shall issue and deliver to the
Rights Agent for delivery to the record holder of such Right Certificate a new
Right Certificate of like tenor in lieu of such lost, stolen, destroyed or
mutilated Right Certificate.
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(c) Notwithstanding anything to the contrary in this Section 6, the
Rights Agent shall not countersign and deliver a Right Certificate to any Person
if such Right Certificate represents, or would represent when held by such
Person, Rights that had become or would become null and void pursuant to Section
7(d) hereof.
Section 7. Exercise of Rights.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other provisions of
this Agreement, at any time after the Close of Business on the Distribution Date
and prior to the Close of Business on the earlier of the Redemption Date or the
Rights Expiration Date, the registered holder of any Right Certificate may
exercise the Rights represented thereby in whole or in part upon surrender of
such Right Certificate, with the form of election to purchase, including
certificate, on the reverse side thereof completed and duly executed, with
signature guaranteed, to the Rights Agent at the office of the Rights Agent at
ChaseMellon Shareholder Services, L.L.C., ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, together with payment of the Exercise Price for each
Right exercised. Upon the exercise of an exercisable Right and payment of the
Exercise Price in accordance with the provisions of this Agreement, the holder
of such Right shall be entitled to receive, subject to adjustment as provided
herein, one one-hundredth of a Preferred Share (or, following the occurrence of
a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or other
securities).
(c) The "Exercise Price" for the exercise of each Right shall initially
be $70.00 and shall be payable in lawful money of the United States of America
in accordance with Section 7(f) hereof. The Exercise Price and the number of
Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, Common Shares and/or other securities) to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, from and
after the earlier of the date of the first Section 11(a)(ii) Event or the date
of the first Section 13(a) Event, any Rights that are or were Beneficially Owned
by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at any
time on or after the Distribution Date shall be null and void, and for all
purposes of this Agreement such Rights shall thereafter be deemed not to be
outstanding, and any holder of such Rights (whether or not such holder is a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder) shall thereafter
have no right to exercise such Rights.
(e) Prior to the Distribution Date, if the Board of Directors of the
Company shall have determined that such action adequately protects the interests
of the holders of Rights, the Company may, in its discretion, substitute for all
or any portion of the Preferred Shares that would otherwise be issuable (after
the Close of Business on the Distribution Date) upon the exercise of each Right
and payment of the Exercise Price (i) cash, (ii) other equity securities of the
Company, (iii) debt securities of the Company, (iv) other property or (v) any
combination of the foregoing, in each case having an aggregate Current Market
Price equal to the aggregate
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Current Market Price of the Preferred Shares for which substitution is made.
Subject to Section 7(d) hereof, in the event that the Company takes any action
pursuant to this Section 7(e), such action shall apply uniformly to all
outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase, including certificate, completed and duly
executed, with signature guaranteed, accompanied by payment of the Exercise
Price for each Right to be exercised and an amount equal to any applicable tax
or governmental charge required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check or cashier's
check payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from the transfer agent of the Preferred Shares (or,
following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
Common Shares and/or securities) certificates for the number of Preferred Shares
(or such other securities) to be purchased, and the Company hereby irrevocably
authorizes such transfer agent to comply with all such requests, and/or, as
provided in Section 14 hereof, requisition from the depositary agent described
therein depositary receipts representing such number of one-hundredths of a
Preferred Share (or such other securities) as are to be purchased (in which case
certificates for the Preferred Shares (or such other securities) represented by
such receipts shall be deposited by the transfer agent with such depositary
agent) and the Company hereby directs such 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 Preferred Shares (or such other
securities) in accordance with Section 14 hereof, (iii) after receipt of such
certificates, depositary receipts or cash, 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 thereof, deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be suspended for such period as shall
reasonably be necessary for the Company to register and qualify under the
Securities Act and any applicable securities law of any jurisdiction the
Preferred Shares to be issued pursuant to the exercise of the Rights; PROVIDED,
HOWEVER, that nothing contained in this Section 7 shall relieve the Company of
its obligations under Section 9(c) hereof.
(h) In case the registered holder of any Right Certificate shall
exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Sections 6 and 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and
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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.
Section 9. Reservation and Availability of Capital Stock.
(a) Subject to Sections 7(e) and 9(f) hereof, the Company shall cause to
be reserved and kept available out of its authorized and unissued equity
securities (or out of its authorized and issued equity securities held in its
treasury), the number of such equity securities that will from time to time be
sufficient to permit the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise of the
Rights are listed on any national securities exchange, the Company shall use its
best efforts, from and after such time as the Rights become exercisable, to
cause all such securities issued or reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon exercise of
the Rights, the Company shall use its best efforts, from and after the
Distribution Date, to register and qualify such securities under the Securities
Act, the Exchange Act and any other applicable securities laws and to keep such
registration effective until the earlier of the Redemption Date or the
Expiration Date.
(d) The Company shall take all such action as may be necessary to ensure
that all securities delivered upon exercise of the Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable securities.
(e) The Company shall pay when due and payable any and all taxes and
charges that may be payable in respect of the issuance or delivery of the Right
Certificates or of any securities upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax or charge that may be payable
in respect of any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of a certificate for securities in respect of
a name other than that of, the registered holder of the Right Certificate
representing Rights surrendered for exercise, or to issue or deliver any
certificate for securities upon the exercise of any Right 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 satisfaction that no such tax is due.
(f) With respect to the Common Shares and/or other securities issuable
pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants shall be
applicable only upon and following the occurrence of a Section 11(a)(ii) Event.
Section 10. Securities Record Date. Each Person in whose name any
certificate for securities of the Company is issued upon the exercise of Rights
shall for all purposes be deemed
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to have become the holder of record of the securities represented thereby on,
and such certificate shall be dated, the date upon which the Right Certificate
representing such Rights was duly surrendered and payment of the Exercise Price
(and any transfer taxes or charges) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the securities transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such securities on, and such certificate shall be dated, the
next succeeding Business Day on which the securities transfer books of the
Company are open.
Section 11. Adjustment of Exercise Price, Number of Shares Issuable Upon
Exercise of Rights or Number of Rights. The Exercise Price, the number and kind
of securities that may be purchased upon exercise of a 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 that the Company shall at any time after the
Close of Business on the Record Date and prior to the Close of Business
on the earlier of the Redemption Date or the Expiration Date (A) declare
or pay any dividend on the Preferred Shares payable in Preferred Shares
or Voting Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue Preferred Shares or other securities of
the Company (other than those for which an adjustment is required under
Section 11(b) hereof) 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
corporation) or in a reorganization of the Company, then, and upon each
such event, the number and kind of Preferred Shares or other securities
issuable upon the exercise of a Right on the date of such event shall be
proportionately adjusted so that the holder of any Right exercised on or
after such date shall be entitled to receive, upon the exercise thereof
and payment of the Exercise Price, the aggregate number and kind of
Preferred Shares or other securities or other property, as the case may
be, that, if such Right had been exercised immediately prior to such
date and at a time when such Right was exercisable and the transfer
books of the Company were open, such holder would have owned upon such
exercise and would have been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs that would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that a 15% Ownership Date shall have occurred
and neither the Redemption Date nor the Expiration Date shall have
occurred prior to the tenth Business Day following such 15% Ownership
Date (a "Section 11(a)(ii) Event"), then, and upon each such Section
11(a)(ii) Event, proper provision shall be made so that, except as
provided in Section 7(d) hereof, each holder of a Right shall thereafter
have the right to receive, upon the exercise thereof in accordance with
the terms of this Agreement and payment of the then current Exercise
Price, such number of Common Shares of the Company as shall equal the
result obtained by (A) multiplying the then current Exercise Price by
the then number of one-hundredths of a Preferred Share for which a Right
was
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exercisable immediately prior to such Section 11(a)(ii) Event (or, if
the Distribution Date shall not have occurred prior to the date of such
Section 11(a)(ii) Event, the number of one-hundredths of a Preferred
Share for which a Right would have been exercisable if the Distribution
Date had occurred on the Business Day immediately preceding the date of
such Section 11(a)(ii) Event), and (B) dividing that product by 50% of
the Current Market Price of a Common Share on the date of occurrence of
the relevant Section 11(a)(ii) Event (such number of shares being
hereinafter referred to as the "Adjustment Shares"). Successive
adjustments shall be made pursuant to this paragraph each time a Section
11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii) Event
the aggregate number of Common Shares that are authorized by the
Company's Certificate of Incorporation, as amended from time to time,
but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is less than the aggregate number of
Adjustment Shares thereafter issuable upon the exercise in full of the
Rights in accordance with Section 11(a)(ii) hereof (the excess of such
number of Adjustment Shares over and above such number of Common Shares
being hereinafter referred to as the "Unavailable Adjustment Shares"),
then, and upon each such event, the Company shall substitute for the pro
rata portion of the Unavailable Adjustment Shares that would otherwise
be issuable thereafter upon the exercise of each Right and payment of
the Exercise Price (A) cash, (B) other equity securities of the Company
(including, without limitation, shares of preferred stock of the Company
or units of such shares having the same Current Market Price as one
Common Share (a "Common Share Equivalent")), (C) debt securities of the
Company, (D) other property or (E) any combination of the foregoing, in
each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Adjustment Shares for
which substitution is made. Subject to Section 7(d) hereof, in the event
that the Company takes any action pursuant to this Section 11(a)(iii),
such action shall apply uniformly to all outstanding Rights.
(b) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
initially to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("Preferred
Share Equivalents")) or securities convertible into Preferred Shares or
Preferred Share Equivalents, at a price per Preferred Share or Preferred Share
Equivalent (or having a conversion price per share, if a security convertible
into Preferred Shares or Preferred Share Equivalents) less than the Current
Market Price per Preferred Share on such record date, then, and upon each such
event, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be equal to the sum of
the number of Preferred Shares outstanding on such record date plus the number
of Preferred Shares that the aggregate offering price of the total number of
Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the
aggregate initial conversion price of the convertible securities to be so
offered) would purchase at such Current
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Market Price, and the denominator of which shall be equal to the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or Preferred Share Equivalents to be offered for
subscription or purchase (or into which the convertible securities to be so
offered are initially convertible); PROVIDED, HOWEVER, that if such rights,
options or warrants are not exercisable immediately upon issuance but become
exercisable only upon the occurrence of a specified event or the passage of a
specified period of time, then the adjustment to the Exercise Price shall be
made and become effective only upon the occurrence of such event or such passage
of time, and such adjustment shall be made as if the record date for the
issuance of such rights, options or warrants had been the business day
immediately preceding the date upon which such rights, options or warrants
became exercisable. 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 to the Exercise Price shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price that would
then be in effect if such record date had not been fixed.
(c) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, 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 surviving corporation) of assets (other than a distribution for
which an adjustment is required under Section 11(a)(i) or (b) hereof or a
regular quarterly cash dividend), then the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be equal to the excess of the Current Market Price per Preferred Share on
such record date over and above the fair market value of the portion of the
securities or assets to be so distributed with respect to one Preferred Share,
and the denominator of which shall be equal to such Current Market Price per
Preferred Share. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such a distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price that would then be
in effect if such record date had not been fixed.
(d) For the purpose of any computation under this Section 11, if the
Preferred Shares are not publicly held or traded, the "Current Market Price" per
Preferred Share shall be conclusively deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the then
current Exercise Price; PROVIDED, HOWEVER, that any adjustments that by reason
of this Section 11(e) are not required to be made shall be cumulated 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-thousandth of a
Common Share or other share or one-millionth of a Preferred Share, as the case
may be.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right shall, upon exercise thereof, be entitled to
receive any securities of the Company
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other than Preferred Shares, and if an event occurs in respect of such
securities that, if it were to occur in respect of Preferred Shares, would
require an adjustment under this Section 11 in respect of Preferred Shares, then
the number of such other securities 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 Preferred
Shares contained in this Section 11, and the other provisions of this Agreement
with respect to Preferred Shares shall apply on like terms to any such other
securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths 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) below, upon each adjustment of the Exercise Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter represent
the right to purchase, at the adjusted Exercise Price, that number of
one-hundredths of a Preferred Share (calculated to the nearest one-millionth of
a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of the
Exercise Price, to adjust the number of Rights instead of making any adjustment
in the number of Preferred Shares 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-hundredths 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 one-thousandth of a Right) obtained by
dividing the Exercise Price in effect immediately prior to the adjustment of the
Exercise Price by the Exercise Price in effect immediately after such adjustment
of the Exercise Price. The Company shall make a public announcement of its
election to adjust the number of Rights pursuant to this Section 11(i) and
promptly deliver a copy of such announcement to the Rights Agent, indicating the
record date for the adjustment and, if known at the time, the amount of the
adjustment to be made. Such record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if separate Right Certificates
have been issued, it shall be at least 10 days after the date of such public
announcement. If separate 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 representing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment or, at the option of the Company,
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
such adjustment, and upon surrender thereof if required by the Company, new
Right Certificates representing all the Rights
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to which such holders shall be entitled after such adjustment. Right
Certificates to be so distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the Company, the
adjusted Exercise Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or
the number of one-hundredths of a Preferred Share issuable upon the exercise of
one Right, the Right Certificates theretofore and thereafter issued may continue
to express the Exercise Price per one one-hundredth of a Preferred Share and the
number of Preferred Shares issuable upon the exercise of one Right that were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Exercise Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, (and shall provide the Rights
Agent with notice of such election) until the occurrence of such event, the
issuance to the holder of any Right exercised after such record date of the
number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; PROVIDED, HOWEVER, that
the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument representing 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 further adjustments in the number of
one-hundredths of a Preferred Share that may be purchased upon exercise of one
Right, and such further adjustments in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that the
Company in its sole discretion shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly
for cash of any Preferred Shares at less than the Current Market Price thereof,
(iii) issuance wholly for cash of Preferred Shares or securities that by their
terms are convertible into or exchangeable for Preferred Shares, (iv) dividends
on Preferred Shares payable in Preferred Shares or (v) issuance of rights,
options or warrants referred to in Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earliest
of the date of the first
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Section 11(a)(ii) Event, the date of the first Section 13(a) Event, the
Redemption Date or the Expiration Date, (i) pay any dividend on the Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares,
(iii) combine the outstanding Common Shares into a smaller number of Common
Shares or (iv) issue Common Shares in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), then,
and upon each such event, the Exercise Price to be in effect after such event
shall be determined by multiplying the Exercise Price in effect immediately
prior to such event by a fraction, the numerator of which shall be equal to the
number of Common Shares outstanding immediately prior to such event and the
denominator of which shall be equal to the number of Common Shares outstanding
immediately after such event. Successive adjustments shall be made pursuant to
this Section 11(n) each time such a dividend is paid or such a subdivision,
combination or reclassification is effected. If an event occurs that would
require an adjustment under both this Section 11(n) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(n) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
Issuable Upon Exercise of Rights. Whenever an adjustment is made as provided in
Section 11 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment and a brief statement of the facts and computations giving
rise to such adjustment, (b) file with the Rights Agent and with each transfer
agent for the securities issuable upon exercise of the Rights a copy of such
certificate and (c) mail a brief summary thereof to each holder of Rights in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the
failure of the Company to make such certification or to give such notice shall
not affect the validity or the force and effect of such adjustment. Any
adjustment to be made pursuant to Sections 11 or 13 hereof shall be effective as
of the date of the event giving rise to such adjustment. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained, and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of such an adjustment unless
and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event (a "Section 13(a) Event") that, at any time on or after
the 15% Ownership Date and prior to the earlier of the Redemption Date or the
Expiration Date, (1) the Company shall, directly or indirectly, consolidate with
or merge with and into any other Person and the Company shall not be the
continuing or surviving corporation in such consolidation or merger, (2) any
Person shall, directly or indirectly, consolidate with or merge with and into
the Company and the Company shall be the continuing or surviving corporation in
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
Person or cash or any other property, or (3) the Company and/or any one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer,
in one or more transactions (other than transactions in the ordinary course of
business), assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons
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other than the Company or one or more of its wholly-owned Subsidiaries (such
Persons, together with the Persons described in clauses (1) and (2) above shall
be collectively referred to in this Section as the "Surviving Person"), then,
and in each such case, proper provision shall be made so that:
(i) except as provided in Section 7(d) hereof, each holder of a
Right shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and payment of
the then current Exercise Price, in lieu of the securities or other
property otherwise purchasable upon such exercise, such number of
validly authorized and issued, fully paid and nonassessable Common
Shares of the Surviving Person (and if such Surviving Person has more
than one class or series of Common Shares, such number of validly
authorized and issued, fully paid and nonassessable Common Shares of
each series or class) as shall be equal to a fraction, the numerator of
which is the product of the then current Exercise Price multiplied by
the number of one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to the first Section 13(a) Event
(or, if the Distribution Date shall not have occurred prior to the date
of such Section 13(a) Event, the number of one-hundredths of a Preferred
Share that would have been so purchasable if the Distribution Date had
occurred on the Business Day immediately preceding the date of such
Section 13(a) Event, or, if a Section 11(a)(ii) Event has occurred prior
to such Section 13(a) Event, the product of the number of one-hundredths
of a Preferred Share purchasable upon the exercise of a Right (or, if
the Distribution Date shall not have occurred prior to the date of such
Section 11(a)(ii) Event, the number of one-hundredths of a Preferred
Share that would have been so purchasable if the Distribution Date had
occurred on the Business Day immediately preceding the date of such
Section 11(a)(ii) Event) immediately prior to such Section 11(a)(ii)
Event, multiplied by the Exercise Price in effect immediately prior to
such Section 11(a)(ii) Event), and the denominator of which is 50% of
the Current Market Price per Common Share of the Surviving Person on the
date of consummation of such Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this
Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
the Surviving Person; and
(iv) the Surviving Person shall take such steps (including, but
not limited to, the 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 ensure that the provisions hereof
shall thereafter be applicable to its Common Shares thereafter
deliverable upon the exercise of Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is the
sale or transfer in one or more transactions of assets or earning power
aggregating more than 50% of the assets or
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earning power of the Company and its Subsidiaries (taken as a whole), but less
than 100% thereof, then each Person acquiring all or a portion thereof shall
assume the obligations of the Company as to a fraction of each of the Rights
equal to the fraction of the assets of the Company and its Subsidiaries (taken
as a whole) acquired by such Person, and the obligations of the Company as to
the remaining fraction of each of the Rights shall continue to be the
obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless prior
thereto the Company and the Surviving Person shall have executed and delivered
to the Rights Agent a supplemental agreement confirming that such Surviving
Person shall, upon consummation of such Section 13(a) Event, assume this
Agreement in accordance with Section 13 hereof, that all rights of first refusal
or preemptive rights in respect of the issuance of Common Shares of such
Surviving Person upon exercise of outstanding Rights have been waived and that
such Section 13(a) Event shall not result in a default by such Surviving Person
under this Agreement, and further providing that, as soon as practicable after
the date of consummation of such Section 13(a) Event, such Surviving Person
shall:
(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, use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing, use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the
Expiration Date, and similarly comply with all applicable state
securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the Common Shares of the Surviving Person purchasable
upon exercise of the Rights on a national securities exchange, or use
its best efforts to cause the Rights and such Common Shares to meet the
eligibility requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
(d) In the event that at any time after the occurrence of a Section
11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant
to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described in Section 13(a)
hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.
(e) The provisions of this Section 13 shall apply to each successive
merger, consolidation, sale or other transfer constituting a Section 13(a)
Event.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates that represent fractional Rights. If the Company
shall determine not to issue such fractional Rights, the Company shall pay to
the registered holders of the Right Certificates with respect to which such
fractional Rights would otherwise be issuable, at the time such fractional
Rights would otherwise have been issued as provided herein, an amount in cash
equal to the same fraction of the Current Market Price of a whole Right on the
Business Day immediately prior to the date upon which such fractional Rights
would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares (other than fractions that are integral multiples of
one one-hundredth of a Preferred Share) upon exercise of Rights, or to
distribute certificates that represent fractional Common Shares or Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
represented 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
Preferred Shares. If the Company shall determine not to issue fractional Common
Shares or Preferred Shares (or depositary receipts in lieu of Preferred Shares),
the Company shall pay to the registered holders of Right Certificates with
respect to which such fractional Common Shares or Preferred Shares would
otherwise be issuable, at the time such Rights are exercised as provided herein,
an amount in cash equal to the same fraction of the Current Market Price of a
whole Common Share or Preferred Share, as the case may be. For purposes of this
Section 14(b), the Current Market Price of a whole Common Share or Preferred
Share shall be the Closing Price per share for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
Common Shares or Preferred Shares upon exercise of such Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except 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 certificates for Common Shares representing Rights, and any
registered holder of any Right Certificate or of such certificate for Common
Shares, without the consent of the Rights Agent or of the holder of any other
Right Certificate or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights represented by such Right Certificate or by such certificate for Common
Shares in the manner provided in such 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 shall
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be entitled to specific performance, and injunctive relief against actual or
threatened violations, of the obligations of any Person under 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 every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be represented by
certificates for Common Shares registered in the name of the holders of such
Common Shares (which certificates for Common Shares shall also constitute Right
Certificates), and each such Right shall be transferable only in connection with
the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates shall only be
transferable on the registry books of the Rights Agent if surrendered at the
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate is registered as the absolute owner thereof and
of the Rights represented thereby (notwithstanding any notations of ownership or
writing on the Right Certificate by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Holder and Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the securities of the Company that may at any time be issuable upon 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 or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, in each case until such Right or the
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the preparation, delivery,
amendment, 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, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
without limitation the costs and expenses of defending against any claim of
liability.
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The costs and expenses of enforcing this right of indemnification shall also be
paid by the Company. The indemnification provided for hereunder shall survive
the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and shall be authorized
and protected and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with the acceptance and
administration of this Agreement in reliance upon any Right Certificate or
certificate for 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 its counsel as set forth in Section 20 hereof. The
Rights Agent shall not be deemed to have notice of any action or event (as to
which the Rights Agent is entitled to notice hereunder) unless such has been
given to Rights Agent as provided herein.
(c) Notwithstanding anything in this Agreement to the contrary, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) 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 corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. If, 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 if at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in such Right Certificate and in this
Agreement.
(b) If 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 if 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;
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and in all such cases such Right Certificates shall have the full force provided
in such Right Certificate and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations, and only the duties and obligations, expressly imposed
by this Agreement (and no implied duties or obligations shall be read into this
Agreement against the Rights Agent) upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance of the Rights, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, it may consult
with legal counsel (who may be legal counsel for the Company), and the advice or
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including without limitation the identity of any 15% Stockholder and the
determination of the Current Market Value) be proved or established by the
Company prior to taking, suffering or omitting 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 any one of the Chairman of the Board, any Vice Chairman of
the Board, the Chief Executive Officer or President, any Vice President, the
Chief Financial Officer or Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be
full authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability in respect of, any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement, or in the Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any liability or responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any 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 any Rights becoming null
and void pursuant to Section 7(d) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
7, 11, 13, 23 and 24 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of Rights represented by Right Certificates after actual notice that such change
or adjustment is required); nor shall it
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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 or other
securities to be issued pursuant to this Agreement or any Right Certificate, or
as to whether any Preferred Shares or Common Shares or other securities 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 any
one of the Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer or President, any Vice President, the Chief Financial Officer
or Treasurer, the Secretary or any Assistant Secretary of the Company, and to
apply to such officers for advice or instructions in connection with its duties.
The Rights Agent may conclusively rely on the most recent instructions given by
any such officer and such instructions shall be full authorization and
protection to the Rights Agent for, and the Rights Agent shall incur no
liability in respect of, any action taken, suffered or omitted to be taken by it
in good faith in accordance with such instructions 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 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, suffered or omitted by the Rights Agent in accordance with
a proposal included in any such application on or after the date specified in
such application (which date shall not be less than ten Business Days after the
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions from the Company in
response to such application to the contrary.
(h) The Rights Agent and any stockholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person
or legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent negligence, bad faith or willful misconduct on
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the part of such attorneys or agents, provided that reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
its believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) The Rights Agent shall not be required to take notice or be deemed
to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as a 15% Stockholder, Affiliate or Associate) under this Agreement
unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.
(l) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise or 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 and Preferred Shares by registered or certified mail, and,
at the expense of the Company 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 and 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 as such, 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 such holder's Right
Certificate for inspection by the Company), then the Company shall become the
Rights Agent and 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 Person organized and doing business under the laws of the United
States or of the States of New York or California (or of any other state of the
United States so long as such Person is authorized to do business in the States
of New York or California), in good standing, having an office in New York or
California, that is authorized under such laws to act in the capacity required
by the terms of this Agreement and is subject to supervision or examination by
federal or state authority and that has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000. After appointment,
the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
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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 of this Agreement and so that the successor
Rights Agent may appropriately act as Rights Agent hereunder. 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 and 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.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Right Certificates to the contrary,
the Company may, at its option, issue new Right Certificates in such form as may
be approved by the Board of Directors in order to reflect any adjustment or
change in the Exercise Price and the number or kind or class of shares or other
securities or property purchasable upon exercise of the Rights in accordance
with the provisions of this Agreement.
Section 23. Redemption of Rights.
(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration
Date, the Board of Directors of the Company may, at its option, authorize and
direct the redemption of all, but not less than all, of the then outstanding
Rights at a redemption price of $.001 per Right, as such redemption price shall
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Redemption Price"), and the
Company shall so redeem the Rights.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing and directing the redemption of the Rights pursuant to subsection
(a) of this Section 23, or at such time and date thereafter as it may specify,
and without any further action and without any notice, the right to exercise
Rights shall terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within ten Business Days after the
date of such action, the Company shall give notice of such redemption to the
holders of Rights (and prompt notice thereof to the Rights Agent) by mailing
such notice to all holders of Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, if prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. Any notice that
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives such notice, but neither the failure to give any such notice
nor any defect therein shall affect the legality or validity of such redemption.
Each such notice of redemption shall state the method by which the payment of
the Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may, directly or indirectly, redeem, acquire or purchase for value
any Rights in any manner other than that specifically set forth in Section 24
hereof or in this Section 23, or in connection with the purchase of Common
Shares prior to the earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event.
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(c) The Company may, at its option, pay the Redemption Price in cash,
Common Shares, Preferred Shares, other equity securities of the Company, debt
securities of the Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the Redemption Date
equal to the Redemption Price.
Section 24. Exchange of Rights.
(a) At any time during the period of 180 days after a Section 11(a)(ii)
Event, the Board of Directors of the Company may, at its option, authorize and
direct the exchange of all, but not less than all, of the then outstanding
Rights for Common Shares, one one-hundredths of Preferred Shares, debt
securities of the Company, other property, or any combination of the foregoing,
in each case having an aggregate Current Market Price equal to the result
obtained by (i) multiplying the Current Market Price per Common Share on the
record date for such exchange by the number of Common Shares for which a Right
is exercisable on such record date and (ii) subtracting from such product the
Exercise Price on such Record Date (the "Exchange Ratio"), and the Company shall
so exchange the Rights.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing and directing the exchange of the Rights pursuant to subsection (a)
of this Section 24, or at such time and date thereafter as it may specify, and
without any further action and without any notice, the right to exercise Rights
shall terminate and the only right thereafter of the holders of Rights shall be
to receive a number of Common Shares in accordance with the Exchange Ratio.
Within ten Business Days after the date of such action, the Company shall give
notice of such exchange to the holders of Rights (and prompt notice thereof to
the Rights Agent) by mailing such notice to all holders of Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, if
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives such notice, but neither the
failure to give any such notice nor any defect therein shall affect the legality
or validity of such exchange. Each such notice of exchange shall state the
method by which the Rights will be exchanged for Common Shares.
(c) Notwithstanding the foregoing, in the event that the aggregate
number of Common Shares that are authorized by the Company's Certificate of
Incorporation, as amended from time to time, but not outstanding or reserved for
issuance for purposes other than upon exercise or exchange of the Rights is less
than the aggregate number of Common Shares issuable upon the exchange of the
Rights in accordance with this Section 24 (the excess of such number of
authorized Common Shares over and above such number of issuable Common Shares
being hereinafter referred to as the "Unavailable Exchange Shares"), then the
Company shall substitute for the pro rata portion of the Unavailable Exchange
Shares that would otherwise be issuable upon the exchange of the Rights in
accordance with this Section 24 (i) cash, (ii) other equity securities of the
Company (including, without limitation, Common Share Equivalents), (iii) debt
securities of the Company, (iv) other property or (v) any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Exchange Shares for which
substitution is made. Subject to Section 7(d) hereof,
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in the event that the Company takes any action pursuant to this Section 24, such
action shall apply uniformly to all outstanding Rights.
Section 25. Notice of Certain Events.
(a) In the event that the Company shall propose (i) to declare or pay
any dividend on or make any distribution with respect to its Common Shares or
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Common Shares or Preferred Shares options, rights or
warrants to subscribe for or to purchase any additional shares thereof or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Common Shares or Preferred Shares (other than
a reclassification involving only the subdivision of outstanding shares), (iv)
to effect any consolidation or merger with or into, 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 more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then and in each such case, the Company shall give to
the Rights Agent and each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action that shall specify the
record date for the purpose of such dividend or distribution, or the date upon
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 record of the Common Shares 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 20 days prior to the record date
for determining holders of the Common Shares or Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares or Preferred Shares, whichever date
shall be the earlier. The failure to give the notice required by this Section 25
or any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) Upon the occurrence of each Section 11(a)(ii) Event and each Section
13(a) Event, the Company shall as soon as practicable thereafter give to the
Rights Agent and each holder of a Right Certificate, in accordance with Section
26 hereof, a notice of the occurrence of such event, specifying the event and
the consequences of the event to holders of Rights under Sections 11 and 13
hereof.
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:
▇▇▇▇ & ▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
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Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made to or on the Rights Agent (i) by the
Company shall be sufficiently given or made if sent, postage prepaid, by
registered or certified mail, addressed to the principal office of the Rights
Agent as set forth below (until another address is filed in writing with the
Company) or (ii) by the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to the
principal office of the Rights Agent as set forth below (until another address
is filed in writing with the Company), and shall be deemed given upon actual
receipt. The Company hereby agrees that it shall encourage the holders of the
Right Certificates, in any and all writings to such holders regarding the Rights
or this Agreement, to give or make any notice or demand authorized by this
Agreement by registered or certified mail, addressed to the principal office of
the Rights Agent as follows (until another address is filed in writing with the
Company):
ChaseMellon Shareholder Services, L.L.C.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Attention: General Counsel
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.
(a) The Board of Directors of the Company may, from time to time,
without the approval of any holders of Rights, supplement or amend any provision
of this Agreement in any manner, whether or not such supplement or amendment is
adverse to any holder of Rights, and direct the Rights Agent so to supplement or
amend such provision, and the Rights Agent shall so supplement or amend such
provision; PROVIDED, HOWEVER, that from and after the earliest of (i) the date
of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a)
Event, (iii) the Redemption Date or (iv) the Expiration Date, this Agreement
shall not be supplemented or amended in any manner that would materially and
adversely affect any holder of outstanding Rights other than a 15% Stockholder
or a Surviving Person.
(b) From and after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
Rights Expiration Date, the Company shall not effect any amendment to the
Certificate of Designation for the Preferred Shares that would materially and
adversely affect the rights, privileges or preferences of the Preferred Shares
without the prior approval of the holders of two-thirds or more of the then
outstanding Rights. Notwithstanding anything in this Agreement to the contrary,
no supplement or amendment that changes the rights and duties of the Rights
Agent under this Agreement in any manner adverse to the Rights Agent will be
effective against the Rights Agent without the execution of such supplement or
amendment by the Rights Agent.
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(c) The Rights Agent shall be entitled to request and receive a
certificate executed by either the Chairman of the Board, any Vice Chairman of
the Board, the Chief Executive Officer or President or any Vice President of the
Company and the Chief Financial Officer or Treasurer, the Secretary or any
Assistant Secretary of the Company stating that the proposed supplement or
amendment complies with this Section 27 prior to its execution of such
supplement or amendment.
Section 28. Certain Covenants. Subject to Section 27 hereof and the
other provisions of this Agreement, from and after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Expiration Date, the
Company shall not (a) issue or sell, or permit any Subsidiary to issue or sell,
to a 15% Stockholder or a Surviving Person, or any Affiliate or Associate of a
15% Stockholder or a Surviving Person, or any Person holding Voting Shares of
the Company that are Beneficially Owned by a 15% Stockholder or a Surviving
Person, (i) any rights, options, warrants or convertible securities on terms
similar to, or that materially adversely affect the value of, the Rights or (ii)
Preferred Shares, Common Shares or shares of any other class of capital stock,
if such sale is intended to or would materially adversely affect the value of
the Rights, or (b) take any other action that is intended to or would materially
adversely affect the value of the Rights.
Section 29. 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 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (other than those representing
Rights that have become null and void) and the certificates for Common Shares
representing Rights (other than those Rights that have become null and void) any
legal or equitable right, remedy or claim under this Agreement, and this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and such registered holders of Right Certificates and certificates for
Common Shares representing Rights.
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Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts made and
performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each such counterpart shall for all purposes be deemed to be
an original and all such counterparts shall together constitute but one and the
same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
▇▇▇▇ & TALBOT, INC.
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman of the Board Title: Treasurer and Secretary
and Chief Executive
Officer
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
Attest:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President Title: Assistant Vice President
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