EXHIBIT 4
RIGHTS AGREEMENT
RIGHTS AGREEMENT dated as of November 8, 1996 (the "Agreement"),
between ▇▇▇▇▇▇▇ ASSOCIATES, INC., a Delaware corporation (the "Company") and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK (the "Rights Agent").
WHEREAS, effective October 30, 1996 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
distribution of (i) one right for each share of Class A Common Stock, par value
$1.00 per share, of the Company (the "Nonvoting Common Stock") and (ii) one
right for each share of Class B Common Stock, par value $1.00 per share, of the
Company (the "Voting Common Stock"; and, collectively with the Nonvoting Common
Stock, the "Company Common Stock") outstanding at the Close of Business (as
hereinafter defined) on November 14, 1996 (the "Record Date"), and has
authorized the issuance of one right (as such number may hereinafter be adjusted
pursuant hereto) for each share of Company Common Stock issued between the
Record Date (whether originally issued or delivered from the Company's treasury)
and, except as otherwise provided in Section 22, the Distribution Date (as
hereinafter defined), each right issued in respect of a share of Nonvoting
Common Stock (the "Nonvoting Common Stock Right") initially representing the
right to purchase, upon the terms and subject to the conditions hereinafter set
forth, one Unit of Series A Junior Participating Preferred Stock (as hereinafter
defined), and each right issued in respect of a share of Voting Common Stock
(the "Voting Common Stock Right") initially representing the right to purchase,
upon the terms and subject to the conditions hereinafter set forth, one Unit of
Series B Junior Participating Preferred Stock (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" means any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) that shall be the Beneficial Owner of (i)
20% or more of the then outstanding Nonvoting Common Stock, (ii) 20% or more of
the then outstanding Voting Common Stock, or (iii) 15% or more of the then
outstanding shares of the Company Common Stock in the aggregate; provided,
however, that the term "Acquiring Person" shall not include an Exempt Person.
Notwithstanding the foregoing, if a majority of the Independent Directors
determines in good faith
Page 9 of 94 Pages
that a Person who would otherwise be an Acquiring Person has become such
inadvertently (including, without limitation, because (A) such Person was
unaware that he or it is the Beneficial Owner of a percentage of Common Stock
that would otherwise cause such Person to be an Acquiring Person, or (B) such
Person was aware of the percentage of securities of which he or it was the
Beneficial Owner but had no actual knowledge of the consequences of being the
Beneficial Owner of such percentage under this Agreement) and without any
intention of changing or influencing control of the Company, and if such Person,
as promptly as practicable after being advised of such determination, divests
himself or itself of a sufficient number of shares of Common Stock so that such
Person would no longer be the Beneficial Owner of that percentage of securities
which would otherwise result in him or it being an Acquiring Person, then such
Person shall not be deemed to be or to have become an Acquiring Person for any
purposes of this Agreement.
(b) "Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates is considered to be a "beneficial owner" under Rule
13d-3 of the General Rules and Regulations under the Exchange Act (the "Exchange
Act Regulations") as in effect on the date hereof; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any securities under this subparagraph (i) as a result of an agreement,
arrangement or understanding to vote such securities if such agreement,
arrangement or understanding (A) arises solely from a revocable proxy given in
response to a proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the Exchange Act and the Exchange Act
Regulations, and (B) is not reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
(ii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate of such other
Person) with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (i) of this
paragraph (c) of Section 1) or disposing of such securities; or
(iii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only
Page 10 of 94 Pages
after the passage of time or upon the satisfaction of conditions) pursuant to
any agreement, arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that under this paragraph (c) a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made in accordance
with Exchange Act Regulations by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange, (B) securities that may be issued upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C) securities that may be
issued upon exercise of Rights from and after the occurrence of a Triggering
Event, which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(c) or Section 22 (the "Original Rights") or pursuant to Section 11(i) in
connection with an adjustment made with respect to any Original Rights.
Notwithstanding the foregoing, an employee, officer or director of the Company
shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any
securities which such Person has the right to acquire from the Company (whether
such right is exercisable immediately or only after the passage of time or upon
the satisfaction of conditions) pursuant to any stock option plan or other
employee benefit plan (the "Underlying Securities"; the right to acquire the
Underlying Securities shall hereinafter be referred to as a "Company Option");
provided that such Person has no intention of changing or influencing control of
the Company at the time of the acquisition of the Company Option or at any time
during which such Person has the right to exercise the Company Option; provided,
further, that if, notwithstanding the foregoing proviso, a Person would be
deemed to be an "Acquiring Person" and such Person thereafter becomes the
beneficial owner of one or more additional shares of Company Common Stock other
than pursuant to the exercise of a Company Option, such Person will immediately
and thereafter be deemed the "Beneficial Owner" of, and to "beneficially own,"
the Underlying Securities under all Company Options owned by such Person. An
employee, officer, or director of the Company exercising a Company Option shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," the
Underlying Securities; provided that such Person has no intention of changing or
influencing control of the Company at the time of the acquisition of the
Underlying Securities; provided, further, that if, notwithstanding the foregoing
proviso, a Person would be deemed to be an "Acquiring Person" and such Person
thereafter becomes the beneficial owner of one or more additional shares of
Company Common Stock other than pursuant to the exercise of a Company Option,
such Person will immediately and thereafter be deemed the "Beneficial Owner" of,
and to "beneficially own," the Underlying Securities. Any Person other than an
employee, officer or director of the Company (including a former employee,
officer or director of the
Page 11 of 94 Pages
Company) exercising a Company Option will not be deemed the "Beneficial Owner"
of, or to "beneficially own," the Underlying Securities; provided that such
Person has no intention of changing or influencing control of the Company at the
time of the acquisition of the Underlying Securities; and provided, further,
that such Person acquires such Underlying Securities with the intention of
effecting their resale (within five (5) days of so acquiring them) to a Person
other than an Affiliate or an Associate of such Person or to another Person
which would be an Acquiring Person (or an Affiliate or an Associate thereof),
and such Person actually disposes of such Underlying Securities within such
five-day period.
(d) "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in New York City are authorized or
obligated by law or executive order to be closed.
(e) "Close of Business" on any given date means 5:00 P.M.,
New York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(f) "Common Stock" of any Person other than the Company
means the capital stock of such Person with the greatest voting power, or, if
such Person shall have no capital stock, the equity securities or other equity
interest having power to control or direct the management of such Person.
(g) "Company Common Stock" has the meaning set forth in the
Recital.
(h) "Company Option" has the meaning set forth in Section
1(c).
(i) "Distribution Date" has the meaning set forth in Section
3(a).
(j) "Exempt Person" means:
(i) the Company, any Subsidiary of the Company, any
employee benefit plan or employee stock plan of the Company or of any Subsidiary
of the Company, or any person or entity organized, appointed, established or
holding Company Common Stock for or pursuant to the terms of any such plan; or
(ii) any Person who would otherwise become an Acquiring
Person solely by virtue of a reduction in the number of outstanding shares of
any class of Company Common Stock; provided, however, that such Person shall not
be an Exempt Person if, subsequent to such reduction, such Person shall become
the
Page 12 of 94 Pages
Beneficial Owner of any additional shares of any class of Company Common Stock.
(k) "Expiration Date" has the meaning set forth in Section
7(a).
(l) "Independent Director" means a member of the Board of
Directors of the Company who is not an officer or employee of the Company, who
is not an Acquiring Person or an Affiliate or Associate of an Acquiring Person
or a representative or nominee of an Acquiring Person or of any such Affiliate
or Associate, and who either (i) was a member of the Board of Directors of the
Company prior to the date hereof, or (ii) subsequently became a director of the
Company and whose election or nomination for election is approved or recommended
by a vote of a majority of the Board of Directors of the Company, which majority
includes a majority of the Independent Directors then on the Board of Directors.
(m) "Nonvoting Common Stock Right" has the meaning set forth
in the recital.
(n) "Person" means any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity, as
well as any syndicate or group deemed to be a person under Section 14(d)(2) of
the Exchange Act.
(o) "Preferred Stock" means the Series A Junior
Participating Preferred Stock, par value $1.00 per share, and the Series B
Junior Participating Preferred Stock, par value $1.00 per share, of the Company.
(p) "Purchase Price" has the meaning set forth in Section
7(b).
(q) "Record Date" has the meaning set forth in the Recital.
(r) "Right" means either a Voting Common Stock Right or a
Nonvoting Common Stock Right, as the case may be.
(s) "Rights Certificate" has the meaning set forth in
Section 3(a).
(t) "Rights Dividend Declaration Date" has the meaning set
forth in the Recital.
(u) "Section 11(a)(ii) Event" means any event described in
Section 11(a)(ii)(A), (B) or (C).
(v) "Section 13 Event" means any event described in clause
(x), (y) or (z) of Section 13(a).
Page 13 of 94 Pages
(w) "Series A Junior Participating Preferred Stock" means
the Series A Junior Participating Preferred Stock having the voting powers,
designation, preferences and relative, participating, optional or other special
rights and qualifications, limitations and restrictions described in the
Certificate of Designation set forth as Exhibit D.
(x) "Series B Junior Participating Preferred Stock" means
the Series B Junior Participating Preferred Stock having the voting powers,
designation, preferences and relative, participating, optional or other special
rights and qualifications, limitations and restrictions described in the
Certificate of Designation set forth as Exhibit E.
(y) "Stock Acquisition Date" means the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(z) "Subsidiary" means, with reference to any Person, any
other Person of which an amount of voting securities or equity interests
sufficient to elect at least a majority of the directors or equivalent governing
body of such other Person is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such first-mentioned Person.
(aa) "Summary of Rights" has the meaning set forth in
Section 3(b).
(ab) "Triggering Event" means any Section 11(a)(ii) Event or
any Section 13 Event.
(ac) "Underlying Securities" has the meaning set forth in
Section 1(c).
(ad) "Unit" has the meaning set forth in Section 7(b).
(ae) "Voting Common Stock Right" has the meaning set forth
in the recital.
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. With
the consent of the Rights Agent, the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Page 14 of 94 Pages
SECTION 3. Issue of Rights Certificates.
(a) Until (i) the earlier of the Close of Business on the
tenth Business Day after the Stock Acquisition Date, and the Close of Business
on the tenth Business Day after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange
Act Regulations or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of 20% or more of the then outstanding Nonvoting
Common Stock, 20% or more of the then outstanding Voting Common Stock, or 15% or
more of the then outstanding shares of the Company Common Stock in the
aggregate, or (ii) such later date as may be determined by action of a majority
of the Independent Directors (such determination to be made prior to either of
the dates specified in (i) above) and of which the Company will give the Rights
Agent prompt written notice (such date above being the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for shares of Company Common Stock registered in
the names of the holders of shares of Company Common Stock as of and subsequent
to the Record Date (which certificates for shares of Company Common Stock shall
be deemed also to be certificates for Rights) and not by separate certificates,
and (y) the Rights will be transferable only in connection with the transfer of
the underlying shares of Company Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of shares of Company Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit A
or Exhibit B (the "Rights Certificates"), evidencing one Right for each share of
Company Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Company Common
Stock has been made pursuant to Section 11(p), at the time of distribution of
the Rights Certificates, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(b) Voting Common Stock Rights may be held only by: (1) An
active employee of the Company, of a corporation in which the Company directly
owns 100% of the voting shares, or of a corporation, in an unbroken chain of
corporations, in which the Company indirectly (through the Company's ownership
of 100% of the
Page 15 of 94 Pages
voting shares of all intermediate corporations in that chain) owns 100% of the
voting shares, each such employee being hereinafter referred to as an "Active
Employee"; (2) directors of the Company ("Directors"); or (3) trusts for the
exclusive benefit of an Active Employee or Active Employees if the terms of the
trust provide that the Trustee shall vote all full shares of Voting Common Stock
of the Company credited to the account of said Active Employee or Active
Employees only in accordance with the written direction of said Active Employee
or Active Employees (hereinafter referred to as "Eligible Trusts"). A trust
shall be deemed to be for the exclusive benefit of an Active Employee even
though the trust makes provision for the holding of shares after an Active
Employee ceases to be such for such period as may be necessary in order to
effectuate distribution to him, or upon death, to his designated beneficiary. At
such time as (i) any person shall cease to be an Active Employee, (ii) any
Director shall cease to hold that position, or (iii) any Eligible Trust which is
a registered holder of Voting Common Stock Rights ceases to be an Eligible Trust
for any reason whatsoever, each Voting Common Stock Right held by or for such
Active Employee, Director or Eligible Trust shall be converted forthwith and
automatically into one Nonvoting Common Stock Right. At such time as any Voting
Common Stock Right is sold or transferred, by operation of law or otherwise, to
anyone, including the Company, who is not an Active Employee, a Director or an
Eligible Trust, each Voting Common Stock Right so sold or transferred shall be
converted forthwith and automatically into one Nonvoting Common Stock Right.
(c) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
in a form which may be appended to certificates that evidence shares of Company
Common Stock, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of shares of Company Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
(d) Rights shall, without any further action, be issued in
respect of all shares of Company Common Stock that are issued (including any
shares of Company Common Stock held in treasury) after the Record Date (but
prior to the earlier of the Distribution Date and the Expiration Date).
Certificates evidencing such shares of Company Common Stock issued after the
Record Date shall bear the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between ▇▇▇▇▇▇▇ Associates, Inc. (the "Company") and ▇▇▇▇▇▇
Trust and Savings Bank (the "Rights Agent") dated as of
November 8, 1996 (the "Rights
Page 16 of 94 Pages
Agreement), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
office of the stock transfer administration office of the
Rights Agent. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, may become null
and void."
With respect to certificates evidencing shares of Company Common Stock (whether
or not such certificates include the foregoing legend or have appended to them
the Summary of Rights), until the earlier of the Distribution Date and the
Expiration Date, the Rights associated with the shares of Company Common Stock
evidenced by such certificates shall be evidenced by such certificates alone and
registered holders of the shares of Company Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock evidenced by such certificates.
SECTION 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate to be printed on the reverse thereof) shall
each be substantially in the form set forth in Exhibit A and Exhibit B hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or any rule or regulation thereunder
or with any rule or regulation of any stock exchange on which the Rights may
from time to time be listed or to conform to usage. Subject to the provisions of
Section 11 and Section 22, the Rights Certificates, whenever distributed, shall
be dated as of the Record Date and on their face shall entitle the holders
thereof to purchase such number of Units of Preferred Stock as shall be set
forth therein at the price set forth therein, but the amount and type of
securities, cash or other
Page 17 of 94 Pages
assets that may be acquired upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) that becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer that a majority of the Independent Directors has determined to be part
of a plan, arrangement or understanding that has as a primary purpose or effect
the avoidance of Section 7(e) shall, upon the written direction of a majority of
the Independent Directors, contain (to the extent feasible) the following
legend:
"The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or became
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
SECTION 5. Countersignature and Registration.
(a) Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, the President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of the individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature of such Rights Certificates or did not
hold such offices at the date of such Rights Certificates. No Rights Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature duly
Page 18 of 94 Pages
executed by the Rights Agent by manual signature of an authorized signatory, and
such countersignature upon any Rights Certificate shall be conclusive evidence,
and the only evidence, that such Rights Certificate has been duly countersigned
as required hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and registration
of transfer of the Rights Certificates issued hereunder. Such books shall show
the name and address of each holder of the Rights Certificates, the number of
Rights evidenced on its face by each Rights Certificate and the date of each
Rights Certificate.
SECTION 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of Units of Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Certificates
to be transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and executed the certificate set forth in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14, countersign and deliver to the Person entitled
thereto, a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
Page 19 of 94 Pages
(b) If a Rights Certificate shall be mutilated, lost, stolen
or destroyed, upon request by the registered holder of the Rights represented
thereby and upon payment to the Company and the Rights Agent of all reasonable
expenses incident thereto, there shall be issued, in exchange for and upon
cancellation of the mutilated Rights Certificate, or in substitution for the
lost, stolen or destroyed Rights Certificate, a new Rights Certificate, in
substantially the form of the prior Rights Certificate, of like tenor and
evidencing the equivalent number of Rights, but, in the case of loss, theft or
destruction, only upon receipt of evidence satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights Certificate and,
if requested by the Company or the Rights Agent, indemnity also satisfactory to
it.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Prior to the earlier of (i) the Close of Business on the
tenth anniversary hereof (the "Final Expiration Date"), and (ii) the time at
which the Rights are redeemed as provided in Section 23 (the earlier of (i) and
(ii) being the "Expiration Date"), the registered holder of any Rights
Certificate may, subject to the provisions of Sections 7(e) and 9(c), exercise
the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price (as
hereinafter defined) for the number of Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a
share (each such one one-thousandth of a share being a "Unit") of Preferred
Stock upon exercise of Rights shall be $60.00, subject to adjustment from time
to time as provided in Sections 11 and 13(a) (such purchase price, as so
adjusted, being the "Purchase Price"), and shall be payable in accordance with
paragraph (c) below.
(c) As promptly as practicable following the occurrence of
the Distribution Date, the Company shall deposit with a corporation in good
standing organized under the laws of the United States or any State of the
United States, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state authority (such institution being the "Depositary Agent") certificates
evidencing the shares of Preferred Stock that may be acquired upon exercise of
the Rights and shall cause such
Page 20 of 94 Pages
Depositary Agent to enter into an agreement pursuant to which the Depositary
Agent shall issue receipts evidencing interests in the shares of Preferred Stock
so deposited. Upon receipt of a Rights Certificate evidencing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price for the Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased thereby as
set forth below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k), thereupon promptly (i) requisition from the Depositary
Agent depositary receipts evidencing such number of Units of Preferred Stock as
are to be purchased and the Company will direct the Depositary Agent to comply
with such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14, (iii)
after receipt of such depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. In the event that the Company is
obligated to issue Company Common Stock, other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a), the Company
will make all arrangements necessary so that such Company Common Stock, other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made in
cash or by certified or bank check or money order payable to the order of the
Company.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of any Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and that receives such
Rights pursuant to either (A) a transfer (whether or
Page 21 of 94 Pages
not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom the Acquiring Person (or such
Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights, shares of Company Common Stock
or the Company or (B) a transfer that a majority of the Independent Directors
has determined to be part of a plan, arrangement or understanding that has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) are complied
with, but shall have no liability to any holder of Rights or any other Person as
a result of its failure to make any determination under this Section 7(e) or
such Section 4(b) with respect to an Acquiring Person or its Affiliates,
Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights evidenced by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
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 the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Page 22 of 94 Pages
SECTION 9. Reservation and Availability of Capital Stock.
(a) The Company shall at all times prior to the Expiration
Date cause to be reserved and kept available, out of its authorized and unissued
shares of Preferred Stock, the number of shares of Preferred Stock that, as
provided in this Agreement, will be sufficient to permit the exercise in full of
all outstanding Rights. Upon the occurrence of any events resulting in an
increase in the aggregate number of shares of Preferred Stock (or other equity
securities of the Company) issuable upon exercise of all outstanding Rights
above the number then reserved, the Company shall make appropriate increases in
the number of shares so reserved.
(b) If the shares of Preferred Stock to be issued and
delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the period from the Distribution
Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) of the
consideration to be delivered by the Company upon exercise of the Rights or, if
so required by law, as soon as practicable following the Distribution Date (such
date being the "Registration Date"), to file a registration statement on an
appropriate form under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities that may be acquired upon exercise of the
Rights (the "Registration Statement"), (ii) to cause the Registration Statement
to become effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary
to ensure that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
Page 23 of 94 Pages
(e) The Company shall pay any documentary, stamp or transfer
tax imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; provided, however, that the Company
shall not be required to pay any such tax imposed in connection with the
issuance or delivery of Units of Preferred Stock, or any certificates or
depositary receipts for such Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as the
case may be) to any person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company shall
not be required to issue or deliver any certificates or depositary receipts for
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to, or in a name other
than that of, the registered holder upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
SECTION 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Units of
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) evidenced thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or, following the occurrence of a Triggering Event,
other 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
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) transfer books of the Company are open; and provided further,
however, that if delivery of Units of Preferred Stock is delayed pursuant to
Section 9(c), such Persons shall be deemed to have become the record holders of
such Units of Preferred Stock only when such Units first become deliverable.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to securities for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Page 24 of 94 Pages
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred
Stock, (C) combine the outstanding shares of Preferred Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date upon exercise of the Rights, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date, such holder would have owned upon such exercise and 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), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date hereof, directly
or indirectly, (1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of such
merger or combination and Company Common Stock shall remain outstanding and
unchanged, (2) shall, in one transaction or a series of transactions, transfer
any assets to the Company or to any of its Subsidiaries in exchange (in whole or
in part) for shares of Company Common Stock, for other equity securities of the
Company or any such Subsidiary, or for securities exercisable for or convertible
into shares of equity securities of the Company or any of its Subsidiaries
(whether Company Common Stock or otherwise) or otherwise obtain from the Company
or any of its Subsidiaries, with or without consideration, any additional shares
of such equity securities or securities exercisable for or convertible into such
equity securities (other than pursuant to a pro rata distribution to all holders
of Company
Page 25 of 94 Pages
Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity,
assets (including securities) on terms and conditions less favorable to the
Company or such Subsidiary or plan than those that could have been obtained in
arm's-length negotiations with an unaffiliated third party, other than pursuant
to a transaction set forth in Section 13(a), (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the Company or any of
the Company's Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity (other than transactions, if any, consistent
with those engaged in, as of the date hereof, by the Company and such Acquiring
Person or such Associate or Affiliate), assets (including securities) having an
aggregate fair market value of more than $5 million, other than pursuant to a
transaction set forth in Section 13(a), (5) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the Company or any of
its Subsidiaries or any employee benefit plan maintained by the Company or any
of its Subsidiaries or any trustee or fiduciary with respect to such plan acting
in such capacity, any material trademark or material service ▇▇▇▇, other than
pursuant to a transaction set forth in Section 13(a), (6) shall receive, or any
designee, agent or representative of such Acquiring Person or any Affiliate or
Associate of such Acquiring Person shall receive, any compensation from the
Company or any of its Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with the Company's (or
its Subsidiaries') past practices, or (7) shall receive the benefit, directly or
indirectly (except proportionately as a holder of Company Common Stock or as
required by law or governmental regulation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person,
other than pursuant to any transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or consolidation
of the Company with any of its Subsidiaries or any other transaction or series
of transactions
Page 26 of 94 Pages
involving the Company or any of its Subsidiaries, other than a transaction or
transactions to which the provisions of Section 13(a) apply (whether or not with
or into or otherwise involving an Acquiring Person), which has the effect,
directly or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any
of its Subsidiaries that is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of an event described in
Section 11(a)(ii)(A)-(C) (a "Section 11(a)(ii) Event"), proper provision shall
be made so that each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of the number of Units of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, such number of Units of Preferred Stock as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of Units of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event (such product thereafter
being, for all purposes of this Agreement other than Section 13, the "Purchase
Price"), and (y) dividing that product by 50% of the then current market price
(determined pursuant to Section 11(d) hereof) per Unit of Preferred Stock on the
date of such first occurrence (such Units of Preferred Stock being the
"Adjustment Shares").
(iii) In the event that the number of shares of
Preferred Stock that are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company, by the vote of a majority of the Independent
Directors, shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess being the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for such Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Company Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of preferred
stock (such other shares being "preferred stock equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by a majority of the Independent Directors,
after receiving advice from a nationally recognized investment banking firm;
provided, however, that if the Company shall not have made adequate provision to
Page 27 of 94 Pages
deliver value pursuant to clause (B) above within 30 days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a) expires (the later
of (x) and (y) being referred to herein as the "Section 11(a)(iii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, Units
of Preferred Stock (to the extent available) and then, if necessary, cash, which
Units of Preferred Stock and/or cash shall have an aggregate value equal to the
Spread. To the extent that the Company determines that some action need be taken
pursuant to the first sentence of this Section 11(a)(iii), the Company shall
provide, subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights. For purposes of this Section 11(a)(iii), the value of a Unit
of Preferred Stock shall be the current market price (as determined pursuant to
Section 11(d) hereof) per Unit of Preferred Stock on the Section 11(a)(iii)
Trigger Date and the value of any preferred stock equivalent shall be deemed to
have the same value as the Preferred Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
days after such record date) shares of Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the sum of the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock that the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by a majority of
Page 28 of 94 Pages
the Independent Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights, shares of Preferred Stock owned by or held for the
account of the Company or any Subsidiary shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in shares of Preferred
Stock, but including any dividend payable in stock other than Preferred Stock)
or subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date less the fair market value (as determined in good
faith by a majority of the Independent Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holder of the Rights) of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
distributable in respect of a share of Preferred Stock and the denominator of
which shall be such current market price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock or Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such shares for the 10 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that if prior to the
expiration of such requisite ten Trading Day-period the issuer announces either
(A) a dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, then, following the
ex-dividend date for such dividend or the record date for such subdivision, as
Page 29 of 94 Pages
the case may be, the "current market price" shall be properly adjusted to take
into account such event. The closing price for each day shall be, if the shares
are listed and admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which such
shares are listed or admitted to trading or, if such shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date such shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected by a majority
of the Independent Directors. If on any such date no market maker is making a
market in such shares, the fair value of such shares on such date as determined
in good faith by a majority of the Independent Directors shall be used. If such
shares are not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share as determined in good faith by a
majority of the Independent Directors, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. The term "Trading Day" shall mean, if such shares are listed or
admitted to trading on any national securities exchange, a day on which the
principal national securities exchange on which such shares are listed or
admitted to trading is open for the transaction of business or, if such shares
are not so listed or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for Company Common Stock in clause (i) of this
Section 11(d) (other than the fourth sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 1,000 (as such amount may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to Company Common
Stock occurring after the date of this Agreement) multiplied by the current
market price per share of Company Common Stock. If neither Company Common Stock
nor Preferred Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by a majority of the Independent Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights
Page 30 of 94 Pages
Agent and the holders of the Rights. For all purposes of this Agreement, the
"current market price" of a Unit of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one-thousandth of a share of Company Common
Stock or Common Stock or other share or hundred-thousandth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction that
mandates such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or 13(a) the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of Units of Preferred
Stock (or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Units of Preferred Stock (calculated to the nearest hundred-thousandth of a
Unit) obtained by (i) multiplying (x) the number of Units of Preferred Stock
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to
Page 31 of 94 Pages
such adjustment of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of Units of Preferred Stock that may be acquired upon
the exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of Units of Preferred
Stock 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 hundred-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 days later than the date of such public
announcement. If Rights 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 Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights 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 Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Units of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per Unit and the number of
Units of Preferred Stock that were expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value of
Page 32 of 94 Pages
the number of Units of Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
such fully paid and nonassessable number of Units of Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date of that number of Units of Preferred Stock and shares of other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of Units of Preferred Stock and shares of other capital stock
or securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment a majority of
the Independent Directors shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities that
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such holders or shall reduce the taxes
payable by such holders.
(n) The Company shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
Page 33 of 94 Pages
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the Person which constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
distributed or otherwise transferred to its stockholders or other persons
holding an equity interest in such Person, Rights previously owned by such
Person or any of its Affiliates and Associates; provided, however, that this
Section 11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not,
except as permitted by Section 23 or Section 26, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Company Common Stock payable in shares
of Company Common Stock, (ii) subdivide the outstanding shares of Company Common
Stock, (iii) combine the outstanding shares of Company Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), the number of Rights associated with each share of
Company Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Company Common Stock immediately
prior to such event by a fraction, the numerator of which shall be the total
number of shares of Company Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Company Common Stock outstanding immediately following the
occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred
Page 34 of 94 Pages
Stock and the Company Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate evidencing shares of
Company Common Stock) in accordance with Section 25. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, either (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Company Common
Stock shall be converted into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) to any Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), in one or more transactions assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) (any such event being a "Section 13 Event"), then, and in
each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, such
number of validly authorized and issued, fully paid and nonassessable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), which
shares shall not be subject to any liens, encumbrances, rights of first refusal,
transfer restrictions or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of
Units of Preferred Stock for which a Right is exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such Units for which a Right would be exercisable hereunder but for
the occurrence of such Section 11(a)(ii) Event by the Purchase Price which would
be in effect hereunder but for such first occurrence) and (2) dividing that
product (which, following
Page 35 of 94 Pages
the first occurrence of a Section 13 Event, shall be the "Purchase Price" for
all purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to ensure that the provisions of this Agreement
shall thereafter be applicable to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the provisions of Section
11(a)(ii) shall be of no further effect following the first occurrence of any
Section 13 Event.
(b) "Principal Party" means:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), (A) the Person that is
the issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than one such
issuer, the issuer of Common Stock that has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof) and (B) if no securities are
so issued, the Person that is the other party to such merger or consolidation,
or, if there is more than one such Person, the Person the Common Stock of which
has the highest aggregate current market price (determined pursuant to Section
11(d) hereof); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the largest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a party
to such transaction or transactions receives the same portion of the assets or
earning power transferred pursuant to such transaction or transactions or if the
Person receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); provided,
however, that in any such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act ("Registered Common Stock"), or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of
Page 36 of 94 Pages
another Person that has Registered Common Stock outstanding, "Principal Party"
shall refer to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person which has Registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent entity of such
first-mentioned Person; (3) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and one or more of such other
Persons has Registered Common Stock outstanding, "Principal Party" shall refer
to whichever of such other Persons is the issuer of the Registered Common Stock
having the highest aggregate current market price (determined pursuant to
Section 11(d) hereof); and (4) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and none of such
other Persons have Registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
stockholders' equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as
practicable following the execution of such agreement, a registration statement
under the Securities Act with respect to the Common Stock that may be acquired
upon exercise of the Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the requirements of the
Securities Act) until the Expiration Date, and (C) as soon as practicable
following the execution of such agreement, take such action as may be required
to ensure that any acquisition of such Common Stock upon the exercise of the
Rights complies with any applicable state security or "blue sky" laws; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act.
Page 37 of 94 Pages
(d) In case the Principal Party that is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of this Section 13; then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended, or
that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers. In
the event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
SECTION 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates that evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the Persons to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
such fraction of the market value of a whole Right. For purposes of this Section
14(a), the market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be, if the Rights are listed or admitted to trading on
a national securities exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-
Page 38 of 94 Pages
counter market as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by a majority of the Independent
Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
a majority of the Independent Directors shall be used and such determination
shall be described in a statement filed with the Rights Agent and the holders of
the Rights.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions that are integral multiples
of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates that evidence such fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock). In lieu of such fractional shares of Preferred
Stock that are not integral multiples of one one-thousandth of a share, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the then current market price of a share of Preferred Stock on the
day of exercise, determined in accordance with Section 11(d).
(c) The holder of a Right by the acceptance of the Rights
expressly waives his or her right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates evidencing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate evidencing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate evidencing shares of Company Common
Stock), may, in his or her own behalf and for his or her own benefit, enforce,
and may institute and maintain any suit, action or proceeding against the
Company or any other Person to enforce, or otherwise act in respect of, his or
her right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights 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 be entitled to specific
performance of the obligations
Page 39 of 94 Pages
hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
SECTION 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents to and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purposes duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f), the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as promptly as practicable.
SECTION 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Preferred Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights evidenced thereby, nor shall anything
Page 40 of 94 Pages
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, except as provided in Section 24, to
receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights 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, including
reasonable fees and disbursements of its counsel, incurred in connection with
the execution and administration of this Agreement and the exercise and
performance of its duties hereunder. The Company shall indemnify the Rights
Agent for, and hold it harmless against, any loss, liability, or expense,
incurred without negligence or wilful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability hereunder. The costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company. The indemnity provided for herein shall survive the expiration of
the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon, which
reliance shall be conclusive, any Rights Certificate or certificate for
Preferred Stock or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document believed
by it to be genuine and to have been signed and/or executed or made by the
proper Person or Persons.
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stockholder services businesses 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
Page 41 of 94 Pages
of any document or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement (an 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
Rights Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts of refrains from acting,
it may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Page 42 of 94 Pages
Secretary of the Company and delivered to the Rights Agent; provided, however,
that so long as any Person is an Acquiring Person hereunder, such certificate
shall be signed and delivered by a majority of the Independent Directors; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence or wilful 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 Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), 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 have any responsibility for
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or for the validity or execution of
any Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 or for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12); nor
shall the Rights Agent be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 7(e) hereof)
until the Rights Agent has actual knowledge of such changes; nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or any other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Preferred Stock or any other securities will, when
so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and assurances as may reasonably be required by the
Rights Agent for the performance by the Rights Agent of its duties under this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the Chief
Page 43 of 94 Pages
Executive Officer, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer;
provided, however, that so long as any Person is an Acquiring Person hereunder,
and the Rights Agent has actual knowledge that such person is an Acquiring
Person, the Rights Agent shall accept such instructions and advice only from a
majority of the Independent Directors and shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with such
instructions of the majority of the Independent Directors. 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 Rights Agreement and the date on and/or
after which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than five Business Days after the date any such officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder, 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 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 therefrom,
provided the Rights Agent exercised reasonable care 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 or
Page 44 of 94 Pages
in the exercise of its rights hereunder if the Rights Agent shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed, not signed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company. If such certificate has been completed and signed and shows a
negative response to clauses 1 and 2 of such certificate, unless previously
instructed otherwise in writing by the Company (which instructions may impose on
the Rights Agent additional ministerial responsibilities, but no discretionary
responsibilities), the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section
7(e) and shall not be charged with any knowledge to the contrary.
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' prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' prior notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the
Preferred Stock and the Company Common Stock, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or any state of the United
States in good standing, shall be authorized to do business as a banking
institution in the State of New York or the Commonwealth of Pennsylvania, shall
be authorized under such laws to exercise corporate trust or stock transfer
powers, shall be subject to supervision or examination by federal or state
Page 45 of 94 Pages
authorities and shall have at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
corporation described in clause (a). After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Preferred Stock and the Company Common Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent.
SECTION 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a majority of the Independent Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired under the Rights Certificates. In addition, in
connection with the issuance or sale of shares of Company Common Stock following
the Distribution Date and prior to the Expiration Date, the Company (a) shall
with respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Independent Directors, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. Redemption and Termination.
(a) Subject to Section 30, the Company may, at its option,
by action of a majority of the Independent Directors, at any time prior to (i)
the Close of Business on the tenth Business
Page 46 of 94 Pages
Day following the Stock Acquisition Date, or (ii) such later date as a majority
of the Independent Directors shall determine (such determination to be made
prior to the date specified in (i) above) and of which the Company will give the
Rights Agent prompt written notice, but in no event later than the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being the "Redemption
Price"), and the Company may, at its option, by action of a majority of the
Independent Directors, pay the Redemption Price either in shares of Company
Common Stock (based on the "current market price", as defined in Section 11(d),
of the shares of Company Common Stock at the time of redemption) or cash.
(b) Immediately upon the action of a majority of the
Independent Directors ordering the redemption of the Rights, evidence of which
shall be filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of a majority of the Independent
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for Company
Common Stock. Any notice that is mailed in the manner herein provided shall be
deemed given whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
SECTION 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), (iv) to effect any consolidation or merger into or
with any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer),
Page 47 of 94 Pages
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 (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or (v) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock whichever shall be the earlier;
provided, however, that no such notice shall be required pursuant to this
Section 24, if any Subsidiary of the Company effects a consolidation or merger
with or into, or effects a sale or other transfer of assets or earnings power
to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section
11(a)(ii) shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii).
SECTION 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
▇▇▇▇▇▇▇ Associates, Inc.
▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 48 of 94 Pages
and if to the Rights Agent, at its address at:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to the Company and to the Rights Agent shall be deemed given upon
receipt. Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) 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 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates evidencing
shares of Company Common Stock. From and after the Distribution Date and subject
to the penultimate sentence of this Section 26, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) subject to Section 30, a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company or, so
long as any Person is an Acquiring Person hereunder, from the majority of the
Independent Directors that states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment, subject to the Right Agent's right to apply to
counsel chosen by the Right Agent and the Right Agent being reasonably assured
that such supplement or amendment is in no way detrimental to the Right Agent's
right or
Page 49 of 94 Pages
interest. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made that changes the Redemption Price, the
Purchase Price, the Expiration Date or the number of Units of Preferred Stock
for which a Right is exercisable without the approval of a majority of the
Independent Directors. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Company Common Stock.
SECTION 27. 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 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, the Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
or by a majority of the Independent Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or any member
thereof to any liability to the holders of the Rights.
SECTION 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
SECTION 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of
Page 50 of 94 Pages
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; provided, however, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and a majority of the Independent Directors determines in its good
faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement and the Rights shall
not then be redeemable, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth Business Day following the date of such determination by a majority of the
Independent Directors.
SECTION 31. Governing Law. This Agreement each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed entirely in such state; provided, however, that Sections 18, 19,
20 and 21 shall be governed by, and construed in accordance with, the laws of
the State of Illinois.
SECTION 32. Counterparts. This Agreement may be executed (including by
facsimile) in one or more counterparts and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. Descriptive Headings. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 34. Exchange.
(a) The Company may at any time prior to the Distribution
Date, upon resolution of a majority of the Independent Directors, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to Section 7(e) hereof) for Units of
Preferred Stock at an exchange ratio specified in the following sentence, as
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof. Subject to such adjustment, upon
such resolution each Right may be exchanged for that number of Units of
Preferred Stock obtained by dividing the Adjustment Spread (as defined below) by
the then current market price (determined pursuant to Section 11(d) hereof) per
Unit of Preferred Stock on the earlier of (i) the date on which any Person
becomes an Acquiring Person and (ii) the date on which a tender or exchange
offer by any Person (other than the Company, any
Page 51 of 94 Pages
Subsidiary of the Company, any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity) is first published or sent or given within the meaning
of Rule 14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 20% or more of
the then outstanding Nonvoting Common Stock, 20% or more of the then outstanding
Voting Common Stock, or 15% or more of the then outstanding shares of the
Company Common Stock in the aggregate (such exchange ratio being the "Exchange
Ratio"). The "Adjustment Spread" shall equal (x) the aggregate market price on
the date of such event of the number of Adjustment Shares determined pursuant to
Section 11(a)(ii), minus (y) the Purchase Price.
(b) Immediately upon the action of a majority of the
Independent Directors ordering the exchange of any Rights pursuant to Section
34(a) and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Units of Preferred Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange shall state the
method by which the exchange of Units of Preferred Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Preferred
Stock that are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 34, the Company shall take all such action as
may be necessary to authorize additional shares of Preferred Stock for issuance
upon exchange of the Rights or make adequate provision to substitute (1) cash,
(2) Company Common Stock or other equity securities of the Company, (3) debt
securities of the Company, (4) other assets, or (5) any combination of the
foregoing, having an aggregate value equal to the Adjustment Spread, where such
aggregate value has been determined by a majority of the Independent Directors.
Page 52 of 94 Pages
(d) The Company shall not be required to issue
fractions of Units of Preferred Stock or to distribute certificates that
evidence fractional Units. In lieu of fractional Units, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exchanged as herein provided an amount in cash equal to the same fraction of the
current market price (determined pursuant to Section 11(d) hereof) of one Unit
of Preferred Stock.
SECTION 35. Survival of Agreement Following Certain Events.
This Agreement shall survive any recapitalization, merger, or consolidation, or
similar event resulting in the elimination of the Company's dual classes of
Common Stock. Pursuant to Section 26, the Company and the Rights Agent shall
supplement or amend any provision of this Agreement without the approval of any
holders of any Rights Certificates to reflect the elimination of the dual
classes of Company Common Stock.
Page 53 of 94 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
ATTEST: ▇▇▇▇▇▇▇ ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------- -------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Counsel Chairman, Chief Executive
and Asst. Secretary Officer, Chief Operating
Officer and President
ATTEST: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------- -------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Trust Officer and Assistant Vice President
Secretary
Page 54 of 94 Pages
EXHIBIT A
Form of Series A Rights Certificate
Certificate No. A-__ _______ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.](1)
Series A Rights Certificate
▇▇▇▇▇▇▇ ASSOCIATES, INC.
This certifies that _____________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of November 8, 1996 (the "Rights Agreement"; terms
defined therein are used herein with the same meaning unless otherwise defined
herein) between ▇▇▇▇▇▇▇ ASSOCIATES, INC., a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as Rights Agent (which term shall
include any successor Rights Agent under the Rights Agreement), to purchase from
the Company at any time after the Distribution Date and prior to the Expiration
Date at the office of the Rights Agent, one one-thousandth of one fully paid and
nonassessable share of Series A Junior Participating Preferred Stock, par value
$1.00 per share (the "Preferred Stock"), of the Company at the Purchase Price
initially of $60.00 per one one-thousandth share (each such one one-thousandth
of a share being a "Unit") of Preferred Stock, upon presentation and surrender
of this Rights Certificate with the Election to Purchase and related certificate
duly executed. The number of Rights evidenced by this Rights Certificate (and
the number of Units that may be purchased
--------
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Page 55 of 94 Pages
upon exercise thereof) set forth above, and the Purchase Price per Unit set
forth above shall be subject to adjustment in certain events as provided in the
Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person or, under
certain circumstances described in the Rights Agreement, a transferee of any
such Acquiring Person, Associate or Affiliate, such Rights shall become null and
void and no holder hereof shall have any right with respect to such Rights from
and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive common stock, cash or other
assets, all as provided in the Rights Agreement.
This Rights Certificate is subject to all the terms and conditions of
the Rights Agreement, which terms and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the
Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company under certain circumstances
at its option at a redemption price of $.01 per Right, payable at the Company's
option in cash or in common stock of the Company, subject to adjustment in
certain events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
Page 56 of 94 Pages
No holder of this Rights Certificate, as such, shall he entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be constituted to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________ ___, 199_/200_.
ATTEST: ▇▇▇▇▇▇▇ ASSOCIATES, INC.
By: ________________________ By: _____________________
Name: Name:
Title: Title:
Countersigned:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
as Rights Agent
By: ________________________
Name:
Title:
Page 57 of 94 Pages
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto _______________________________________________________________
------------------------------------------------------------------------------
(Please print name and address of transferee)
------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _________ __, 199_/200_
----------------------------
Signature
Signature Guaranteed:
Page 58 of 94 Pages
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate |_| is |_| is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
|_| did |_| did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________ __, 199_/200_ ______________________
Signature
Signature Guaranteed:
-------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member in the Securities Transfer
Agents Medallion Program, the Stock Exchange Medallion Program or the New York
Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend. to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
Page 59 of 94 Pages
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: ▇▇▇▇▇▇▇ ASSOCIATES, INC.
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the Units of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
-------------------------------
(Please print name and address)
-------------------------------
Please insert social security
or other identifying number: ______________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
-------------------------------
(Please print name and address)
-------------------------------
Please insert social security
or other identifying number: ______________
-------------------------
Signature
Signature Guaranteed:
Page 60 of 94 Pages
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate |_| are |_| are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned |_| did |_| did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: ____________ __, 199_/200_ ________________________
Signature
Signature Guaranteed:
------------------------
NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member in the Securities Transfer
Agents Medallion Program, the Stock Exchange Medallion Program or the New York
Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
Page 61 of 94 Pages
EXHIBIT B
Form of Series B Rights Certificate
Certificate No. B-__ _______ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.](2)
Series B Rights Certificate
▇▇▇▇▇▇▇ ASSOCIATES, INC.
This certifies that ___________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of November 8, 1996 (the "Rights Agreement"; terms
defined therein are used herein with the same meaning unless otherwise defined
herein) between ▇▇▇▇▇▇▇ ASSOCIATES, INC., a Delaware corporation (the
"Company"), and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as Rights Agent (which term shall
include any successor Rights Agent under the Rights Agreement), to purchase from
the Company at any time after the Distribution Date and prior to the Expiration
Date at the office of the Rights Agent, one one-thousandth of one fully paid and
nonassessable share of Series B Junior Participating Preferred Stock, par value
$1.00 per share (the "Preferred Stock"), of the Company at the Purchase Price
initially of $60.00 per one one-thousandth share (each such one one-thousandth
of a share being a "Unit") of Preferred Stock, upon presentation and surrender
of this Rights Certificate with the Election to Purchase and related certificate
duly executed. The number of Rights evidenced by this Rights Certificate (and
the number of Units that may be purchased
--------
(2) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Page 62 of 94 Pages
upon exercise thereof) set forth above, and the Purchase Price per Unit set
forth above shall be subject to adjustment in certain events as provided in the
Rights Agreement.
The Rights evidenced by this certificate may be held only by: (1) An
active employee of the Company, of a corporation in which the Company directly
owns 100% of the voting shares, or of a corporation, in an unbroken chain of
corporations, in which the Company indirectly (through the Company's ownership
of 100% of the voting shares of all intermediate corporations in that chain)
owns 100% of the voting shares, each such employee being hereinafter referred to
as an "Active Employee"; (2) directors of the Company ("Directors"); or
(3) Trusts for the exclusive benefit of an Active Employee or Active Employees
if the terms of the trust provide that the Trustee shall vote all full shares of
Class B Common Stock of the Company credited to the account of said Active
Employee or Active Employees only in accordance with the written direction of
said Active Employee or Active Employees (hereinafter referred to as "Eligible
Trusts"). A trust shall be deemed to be for the exclusive benefit of an Active
Employee even though the trust makes provision for the holding of shares after
an Active Employee ceases to be such for such period as may be necessary in
order to effectuate distribution to him, or upon death, to his designated
beneficiary. At such time as (i) any person shall cease to be an Active
Employee, (ii) any Director shall cease to hold that position, or (iii) any
Eligible Trust which is a registered holder of Rights evidenced by this
certificate ceases to be an Eligible Trust for any reason whatsoever, each Right
evidenced by this certificate held by or for such Active Employee, Director or
Eligible Trust shall be converted forthwith and automatically into one Series A
Right of the Company. At such time as any Right evidenced by this certificate is
sold or transferred, by operation of law or otherwise, to anyone, including the
Company, who is not an Active Employee, a Director or an Eligible Trust, each
Right so sold or transferred shall be converted forthwith and automatically into
one Series A Right of the Company.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person or, under
certain circumstances described in the Rights Agreement, a transferee of any
such Acquiring Person, Associate or Affiliate, such Rights shall become null and
void and no holder hereof shall have any right with respect to such Rights from
and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive common stock, cash or other
assets, all as provided in the Rights Agreement.
Page 63 of 94 Pages
This Rights Certificate is subject to all the terms and conditions of
the Rights Agreement, which terms and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the
Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company under certain circumstances
at its option at a redemption price of $.01 per Right, payable at the Company's
option in cash or in common stock of the Company, subject to adjustment in
certain events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be constituted to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
Page 64 of 94 Pages
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________ ___, 199_/200_.
ATTEST: ▇▇▇▇▇▇▇ ASSOCIATES, INC.
By: _________________________ By: ______________________
Name: Name:
Title: Title:
Countersigned:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
as Rights Agent
By: ________________________
Name:
Title:
Page 65 of 94 Pages
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto _________________________________________________
----------------------------------------------------------------
(Please print name and address of transferee)
----------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _________ __, 199_/200_
----------------------------
Signature
Signature Guaranteed:
Page 66 of 94 Pages
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate |_| is |_| is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
|_| did |_| did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________ __, 199_/200_ ______________________
Signature
Signature Guaranteed:
-------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member in the Securities Transfer
Agents Medallion Program, the Stock Exchange Medallion Program or the New York
Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend. to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
Page 67 of 94 Pages
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: ▇▇▇▇▇▇▇ ASSOCIATES, INC.
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the Units of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
-------------------------------
(Please print name and address)
-------------------------------
Please insert social security
or other identifying number: ______________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
-------------------------------
(Please print name and address)
-------------------------------
Please insert social security
or other identifying number: ______________
-------------------------
Signature
Signature Guaranteed:
Page 68 of 94 Pages
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate |_| are |_| are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned |_| did |_| did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: ____________ __, 199_/200_ ________________________
Signature
Signature Guaranteed:
------------------------
NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member in the Securities Transfer
Agents Medallion Program, the Stock Exchange Medallion Program or the New York
Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
Page 69 of 94 Pages
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 30, 1996, the Board of Directors of ▇▇▇▇▇▇▇ Associates,
Inc., a Delaware corporation (the "Company"), declared a distribution of (i) one
Nonvoting Common Stock Right (as defined below) for each outstanding share of
Class A Common Stock, par value $1.00 per share (the "Nonvoting Common Stock"),
and (ii) one Voting Common Stock Right (as defined below) for each outstanding
share of Class B Common Stock, par value $1.00 per share (the "Voting Common
Stock", and collectively with the Nonvoting Common Stock, the "Company Common
Stock") to stockholders of record at the close of business on November 14, 1996
(the "Record Date") and for each share of Company Common Stock issued (including
shares distributed from Treasury) by the Company thereafter and prior to the
Distribution Date. Each Nonvoting Common Stock Right entitles the registered
holder, subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-thousandth of a share (a "Unit") of Series A
Junior Participating Preferred Stock, par value $1.00 per share (the "Series A
Preferred Stock"), at a Purchase Price of $60.00 per Unit, subject to adjustment
(the "Nonvoting Common Stock Right"). Each Voting Common Stock Right entitled
the registered holder, subject to the terms of the Rights Agreement (as defined
below), to purchase one Unit of Series B Junior Participating Preferred Stock,
par value $1.00 per share (the "Series B Preferred Stock", and collectively with
the Series A Preferred Stock, the "Preferred Stock"), at a Purchase Price of
$60.00 per Unit, subject to adjustment (the "Voting Common Stock Right", and
collectively with the Nonvoting Common Stock Right, the "Rights"). The Purchase
Price is payable in cash or by certified or bank check or money order payable to
the order of the Company. The description and terms of the Rights are set forth
in a Rights Agreement between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as
Rights Agent (the "Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for
the Preferred Stock have been filed with the Securities and Exchange Commission
as exhibits to a Registration Statement on Form 8-A dated November ___, 1996
(the "Form 8-A"). Copies of the Rights Agreement and the Certificate of
Designation are available free of charge from the Company. This summary
description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Rights Agreement and the Certificate of Designation, including the
definitions therein of certain terms, which Rights Agreement and Certificate of
Designation are incorporated herein by reference.
Page 70 of 94 Pages
The Rights Agreement
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights Certificates
will be distributed. The Rights will separate from the Company Common Stock and
the "Distribution Date" will occur upon (i) the earlier of (A) 10 business days
following a public announcement (the date of such announcement being the "Stock
Acquisition Date") that a person or group of affiliated or associated persons
(other than the Company, any subsidiary of the Company or any employee benefit
plan of the Company or such subsidiary) (an "Acquiring Person") has acquired,
obtained the right to acquire, or otherwise obtained beneficial ownership of 20%
or more of the then outstanding shares of either the Nonvoting Common Stock or
the Voting Common Stock, or 15% or more of the then outstanding shares of
Company Common Stock in the aggregate, and (B) 10 business days following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 20% or more of the then outstanding shares of
either the Nonvoting Common Stock or the Voting Common Stock, or 15% or more of
the then outstanding shares of Company Common Stock in the aggregate, or
(ii) such later date as may be determined by action of a majority of the
Independent Directors of the Board prior to the occurrence of either event
specified in (i) above. The determination of beneficial ownership under the
Rights Agreement generally exclude options to purchase shares and shares
acquired from the Company pursuant to stock-based plans for employees and
directors. Until the Distribution Date, (x) the Rights will be evidenced by
Company Common Stock certificates and will be transferred with and only with
such Company Common Stock certificates, (y) new Company Common Stock
certificates issued after the Record Date (also including shares distributed
from Treasury) will contain a notation incorporating the Rights Agreement by
reference, and (z) the surrender for transfer of any certificates representing
outstanding Company Common Stock will also constitute the transfer of the Rights
associated with the Company Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the Rights Agreement
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and shares of
Page 71 of 94 Pages
Company Common Stock shall remain outstanding, (ii) a Person becomes the
beneficial owner of 20% or more of the then outstanding shares of either the
Nonvoting Common Stock or the Voting Common Stock, or 15% or more of the then
outstanding shares of Company Common Stock in the aggregate, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's ownership interest in any
class of Company Common Stock being increased by more than 1% (e.g., by means of
a reverse stock split or recapitalization), then, in each such case, each holder
of a Right will thereafter have the right to receive, upon exercise, Units of
Preferred Stock (or, in certain circumstances, Company Common Stock, cash,
property or other securities of the Company) having a current market value equal
to two times the exercise price of the Right. The exercise price is the Purchase
Price multiplied by the number of Units of Preferred Stock issuable upon
exercise of a Right prior to the events described in this paragraph.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates or
merges with the Company and all or part of the Company Common Stock is converted
or exchanged for securities, cash or property of any other Person or (iii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as described
above) shall thereafter have the right to receive, upon exercise, common stock
of the Acquiring Person having a current market value equal to two times the
exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to the
holders of the Preferred Stock of evidences of indebtedness, cash or assets
(excluding regular cash dividends, if any) or of subscription rights or warrants
(other than those referred to above).
Page 72 of 94 Pages
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
A majority of the Independent Directors may redeem the Rights in whole,
but not in part, until (i) ten business days following the Stock Acquisition
Date, or (ii) such later date as they shall determine, at a price of $.01 per
Right (subject to adjustment in certain events) (the "Redemption Price"),
payable, at the election of such majority of the Independent Directors, in cash
or shares of Company Common Stock. Immediately upon the action of a majority of
the Independent Directors ordering the redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended without
the approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable. The Rights Agreement will
survive any recapitalization, merger, consolidation, or similar event resulting
in the elimination of the Company's dual classes of Common Stock. The provisions
of the Rights Agreement may be amended without the approval of the holders of
Company Common Stock to reflect such elimination of the dual classes of Common
Stock.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Page 73 of 94 Pages
Each Unit of Preferred Stock will be entitled to dividends at the same
rate per share as dividends declared on the Company Common Stock and shall be
entitled to payment of dividends to the extent dividends are declared on the
Company Common Stock. In the event of liquidation, the holder of a Unit of
Preferred Stock will receive the per share amount paid in respect of a share of
Company Common Stock.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock. The rights of holders of the Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Except as provided by law, the holders of Series A Preferred Stock will
not have any right to vote on any matters to be voted on by the stockholders of
the Company, and the Series A Preferred Stock will not be included in
determining the number of shares voting or entitled to vote on any such matters.
Notwithstanding the foregoing, during such period or periods as there are no
shares of Voting Common Stock issued and outstanding, and only during such
period or periods, each Unit of Series A Preferred Stock shall entitle the
holder thereof to one vote (subject to certain adjustments) on all matters
submitted to a vote of the holders of the Nonvoting Common Stock. In such an
event where there are no shares of Voting Common Stock issued and outstanding,
the holders of Units of Series A Preferred Stock and the holders of shares of
Nonvoting Common Stock will vote together as one class on all matters submitted
to a vote of holders of Nonvoting Common Stock. Except as set forth in the
Certificate of Designation, holders of Units of Series A Preferred Stock will
have no special voting rights and their consents will not be required (except to
the extent they are entitled to vote with holders of shares of Nonvoting Common
Stock) for taking any corporate action.
Subject to certain adjustments provided for in the Certificate of
Designation, each Unit of Series B Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the holders of Voting
Common Stock of the Company. Except as otherwise provided in the Certificate of
Designation or by law, the holders of Units of Series B Preferred Stock and the
holders of shares of Voting Common Stock will vote together as one class on all
matters submitted to a vote of holders of Common Stock of the Company. Further,
holders of Units of Series B Preferred Stock will have no special voting rights
and their consents will not be required (except to the extent they are entitled
to vote with holders of shares of Voting Common Stock) for taking any corporate
action.
Page 74 of 94 Pages
Shares of Series B Preferred Stock and Rights to purchase Series B
Preferred Stock may be held only by: (1) an active employee (i) of the Company,
(ii) of a corporation in which the Company directly owns 100% of the voting
shares, or (iii) of a corporation, in an unbroken chain of corporations, in
which the Company indirectly (through the Company's ownership of 100% of the
voting shares of all intermediate corporations in that chain) owns 100% of the
voting shares, each such employee being hereinafter referred to as an "Active
Employee"; (2) directors of the Company; or (3) trusts for the exclusive benefit
of an Active Employee or Active Employees if the terms of the trust provide that
the Trustee shall vote all full shares of Series B Preferred Stock of the
Company credited to the account of said Active Employee or Active Employees only
in accordance with the written direction of said Active Employee or Active
Employees.
Because of the nature of the Series A Preferred Stock's and the Series
B Preferred Stock's dividend, liquidation and voting rights, the economic value
of one Unit of Preferred Stock that may be acquired upon the exercise of each
Right should approximate the economic value of one share of the Nonvoting Common
Stock and the Voting Common Stock, respectively.
Page 75 of 94 Pages
EXHIBIT D
DESIGNATION OF THE VOTING POWERS, DESIGNATIONS
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
--------------------------------
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
--------------------------------
I, _________________________, [Chief Executive Officer and President]
of ▇▇▇▇▇▇▇ Associates, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DO HEREBY
CERTIFY:
that, pursuant to authority conferred upon the Board of Directors of
the Corporation by its Certificate of Incorporation (the "Certificate"), and,
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware, such Board of Directors, at a duly called meeting held on
October 30, 1996, at which a quorum was present and acted throughout, adopted
the following resolutions, which resolutions remain in full force and effect on
the date hereof creating a series of 10,000 shares of Preferred Stock having a
par value of $1.00 per share, designated as Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock") out of the class of 1,000,000
shares of preferred stock of the par value of $1.00 per share (the "Preferred
Stock"):
RESOLVED, that in order to effect the Rights Plan and pursuant to the
authority vested in the Board of Directors in accordance with the provisions of
the Certificate, the Board of Directors does hereby create, authorize and
provide for the issuance of the Series A Preferred Stock having the voting
powers, designation, relative, participating, optional and other special rights,
preferences, and qualifications, limitations and restrictions thereof that are
set forth as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 10,000.
Page 76 of 94 Pages
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any other series of Preferred Stock or any other shares of preferred
stock of the Corporation ranking prior and superior to the shares of Series A
Preferred Stock with respect to dividends, each holder of one one-thousandth
(1/1000) of a share (a "Unit") of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for that purpose, (i) dividends payable in cash when and if declared
by the Board of Directors of the Corporation in respect of the Common Stock
(each such date being a "Dividend Payment Date") commencing on the first
Dividend Payment Date after the first issuance of such Unit of Series A
Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to,
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the Common Stock since
the immediately preceding Dividend Payment Date, or, with respect to the first
Dividend Payment Date, since the first issuance of a Unit of Series A Preferred
Stock, and (ii) subject to the provision for adjustment hereinafter set forth,
distributions (payable in kind) on each Dividend Payment Date in an amount per
Unit equal to the aggregate per share amount of all noncash dividends or other
distributions (other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock, by reclassification or
otherwise) declared on shares of common stock since the immediately preceding
Dividend Payment Date, or with respect to the first Dividend Payment Date, since
the first issuance of a Unit of Series A Preferred Stock. In the event that the
Corporation shall at any time after October 30, 1996 (the "Rights Declaration
Date"), (i) declare any dividend on outstanding shares of Common Stock payable
in shares of common stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of
Series A Preferred Stock was entitled immediately prior to such event pursuant
to the next preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on Units
of Series A Preferred Stock as provided in paragraph (A) above immediately after
it declares a dividend or distribution on the shares of Common Stock (other than
a dividend payable in shares of Common Stock).
Section 3. Voting Rights.
Page 77 of 94 Pages
(A) Except as provided in (B) below, and except as otherwise provided
by law, the holders of Series A Preferred Stock shall not have any right to vote
on any matters to be voted on by the stockholders of the Corporation, and the
Series A Preferred Stock shall not be included in determining the number of
shares voting or entitled to vote on any such matters.
(B) Notwithstanding subsection (A) of this Section 3, during such
period or periods as there shall be no shares of Class B Common Stock of the
Corporation issued and outstanding, and only during such period or periods, each
Unit of Series A Preferred Stock shall entitle the holder thereof to one vote on
all matters submitted to a vote of the holders of the shares of Class A Common
Stock. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Class A
Common Stock payable in shares of Class A Common Stock, (ii) subdivide
outstanding shares of Class A Common Stock or (iii) combine the outstanding
shares of Class A Common Stock into a smaller number of shares, then in each
such case the number of votes per Unit to which holders of Units of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which shall be the
number of shares of Class A Common Stock outstanding immediately after such
event and the denominator of which shall be the number of shares of Class A
Common Stock that were outstanding immediately prior to such event. Except as
otherwise provided herein or by law, the holders of Units of Series A Preferred
Stock and the holders of shares of Class A Common Stock shall vote together as
one class on all matters submitted to a vote of holders of Class A Common Stock
of the Corporation. Except as set forth herein, holders of Units of Series A
Preferred Stock shall have no special voting rights and their consents shall not
be required (except to the extent they are entitled to vote with holders of
shares of Class A Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever any dividends or distributions payable, on Units of Series
A Preferred Stock as provided in Section 2 have not been paid in full,
thereafter and until all such accrued and unpaid dividends and distributions,
whether or not declared, on outstanding Units of Series A Preferred Stock shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or repurchase or otherwise acquire for consideration, any shares
of junior stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of parity stock, except dividends paid ratably on
Units of Series A Preferred Stock and shares of all
Page 78 of 94 Pages
such parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of such Units and all such shares are
then entitled;
(iii) redeem or repurchase or otherwise acquire for
consideration shares of any parity stock; provided, however, that the
Corporation may at any time redeem, repurchase or otherwise acquire shares of
any such parity stock in exchange for shares of any junior stock;
(iv) repurchase or otherwise acquire for consideration (other
than shares of junior stock) any Units of Series A Preferred Stock, except in
accordance with a repurchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such Units on the same
terms.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this ▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇▇ or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Units of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
Units shall, upon their cancellation, become authorized but unissued Units of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (i) to the holders
of shares of junior stock unless the holders of Units of Series A Preferred
Stock shall have received, subject to adjustment as hereinafter provided in
paragraph (B), the amount, per Unit, equal to the aggregate per share amount to
be distributed to holders of shares of common stock, or (ii) to the holders of
shares of parity stock, unless simultaneously therewith distributions are made
ratably on Units of Series A Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of Units of Series
A Preferred Stock are entitled under clause (i) of this sentence and to which
the holders of shares of such parity stock are entitled, in each case upon such
liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on
Page 79 of 94 Pages
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the aggregate amount to which holders of Units of Series A Preferred Stock were
entitled immediately prior to such event pursuant to clause (i)(b) of paragraph
(A) of this Section 6 shall be adjusted by multiplying such amount by a fraction
the numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the number
of shares of Common Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption. The Units of Series A Preferred Stock shall not
be redeemable.
Section 9. Ranking. The Units of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock (other than the Series B
Junior Participating Preferred Stock, with which it shall be in pari passu) and
to any other class of preferred stock that hereafter may be issued by the
Corporation as to the payment of dividends and the distribution of assets,
unless the terms of any such series or class shall provide otherwise.
Section 10. Amendment. The Certificate, including, without limitation,
this resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with another corporation in any manner that
would
Page 80 of 94 Pages
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding Units of Series A Preferred
Stock, voting separately as a class.
Section 11. Fractional Shares. The Series A Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
Section 12. Certain Definitions. As used herein with respect to the
Series A Preferred Stock, the following terms shall have the following meanings:
(A) The term "Class A Common Stock" means the class of common stock
designated as the Class A Common Stock, par value $1.00 per share, of the
Corporation at the date hereof or any other class of stock resulting from
successive changes or reclassification of the common stock.
(B) The term "Class B Common Stock" means the class of common stock
designated as the Class B Common Stock, par value $1.00 per share, of the
Corporation at the date hereof or any other class of stock resulting from
successive changes or reclassification of the common stock.
(C) The term "Common Stock" means the common stock, par value $1.00 per
share, of the Corporation at the date hereof or any other stock resulting from
successive changes or reclassifications of the common stock, and includes both
the Class A Common Stock and the Class B Common Stock.
(D) The term "junior stock" (i) as used in Section 4 means the common
stock and any other class or series of capital stock of the Corporation
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends and (ii) as used in
Section 6, shall mean the common stock and any other class or series of capital
stock of the Corporation over which the Series A Preferred Stock has preference
or priority in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
(E) The term "parity stock" (i) as used in Section 4, means any class
or series of stock of the Corporation hereafter authorized or issued ranking
pari passu with the Series A Preferred Stock as to dividends and (ii) as used in
Section 6, shall mean any class or series of capital stock ranking pari passu
with the Series A Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up.
Page 81 of 94 Pages
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ Associates, Inc. has caused this
Certificate to be signed by its [President and Chief Executive Officer], and
attested by its Secretary as of the _____ day of November, 1996.
▇▇▇▇▇▇▇ ASSOCIATES, INC.
By: _________________________
[name,title]
Attest:
By: _________________________
[name,title]
Page 82 of 94 Pages
EXHIBIT E
DESIGNATION OF THE VOTING POWERS, DESIGNATIONS
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
--------------------------------
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
--------------------------------
I, _________________________, [Chief Executive Officer and President]
of ▇▇▇▇▇▇▇ Associates, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), DO HEREBY
CERTIFY:
that, pursuant to authority conferred upon the Board of
Directors of the Corporation by its Certificate of Incorporation (the
"Certificate"), and, pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, such Board of Directors, at a duly
called meeting held on October 30, 1996, at which a quorum was present and acted
throughout, adopted the following resolutions, which resolutions remain in full
force and effect on the date hereof creating a series of 10,000 shares of
Preferred Stock having a par value of $1.00 per share, designated as Series B
Junior Participating Preferred Stock (the "Series B Preferred Stock") out of the
class of 1,000,0000 shares of preferred stock of the par value of $1.00 per
share (the "Preferred Stock"):
RESOLVED, that in order to effect the Rights Plan and pursuant
to the authority vested in the Board of Directors in accordance with the
provisions of the Certificate, the Board of Directors does hereby create,
authorize and provide for the issuance of the Series B Preferred Stock having
the voting powers, designation, relative, participating, optional and other
special rights, preferences, and qualifications, limitations and restrictions
thereof that are set forth as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series B Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 10,000.
Page 84 of 94 Pages
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any other series of Preferred Stock or any other shares
of preferred stock of the Corporation ranking prior and superior to the shares
of Series B Preferred Stock with respect to dividends, each holder of one
one-thousandth (1/1000) of a share (a "Unit") of Series B Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for that purpose, (i) dividends payable in cash when
and if declared by the Board of Directors of the Corporation in respect of the
Common Stock (each such date being a "Dividend Payment Date") commencing on the
first Dividend Payment Date after the first issuance of such Unit of Series B
Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to,
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the Common Stock since
the immediately preceding Dividend Payment Date, or, with respect to the first
Dividend Payment Date, since the first issuance of a Unit of Series B Preferred
Stock, and (ii) subject to the provision for adjustment hereinafter set forth,
distributions (payable in kind) on each Dividend Payment Date in an amount per
Unit equal to the aggregate per share amount of all noncash dividends or other
distributions (other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock, by reclassification or
otherwise) declared on shares of Common Stock since the immediately preceding
Dividend Payment Date, or with respect to the first Dividend Payment Date, since
the first issuance of a Unit of Series B Preferred Stock. In the event that the
Corporation shall at any time after October 30, 1996 (the "Rights Declaration
Date"), (i) declare any dividend on outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of
Series B Preferred Stock was entitled immediately prior to such event pursuant
to the next preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or
distribution on Units of Series B Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the shares of
Common Stock (other than a dividend payable in shares of Common Stock).
Section 3. Voting Rights. The holders of Units of Series B Preferred
Stock shall have the following voting rights:
Page 85 of 94 Pages
(A) Subject to the provision for adjustment
hereinafter set forth, each Unit of Series B Preferred Stock shall entitle the
holder thereof to one vote on all matters submitted to a vote of the holders of
the shares of Class B Common Stock of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Class B Common Stock payable in shares of
Class B Common Stock, (ii) subdivide outstanding shares of Class B Common Stock
or (iii) combine the outstanding shares of Class B Common Stock into a smaller
number of shares, then in each such case the number of votes per Unit to which
holders of Units of Series B Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which shall be the number of shares of Class B Common Stock
outstanding immediately after such event and the denominator of which shall be
the number of shares of Class B Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein or by law,
the holders of Units of Series B Preferred Stock and the holders of shares of
Class B Common Stock shall vote together as one class on all matters submitted
to a vote of holders of Class B Common Stock of the Corporation.
(C) Except as set forth herein, holders of Units of
Series B Preferred Stock shall have no special voting rights and their consents
shall not be required (except to the extent they are entitled to vote with
holders of shares of Class B Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever any dividends or distributions
payable, on Units of Series B Preferred Stock as provided in Section 2 have not
been paid in full, thereafter and until all such accrued and unpaid dividends
and distributions, whether or not declared, on outstanding Units of Series B
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any
other distributions on, or redeem or repurchase or otherwise acquire for
consideration, any shares of junior stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of parity stock, except dividends paid ratably
on Units of Series B Preferred Stock and shares of all such parity stock on
which dividends are payable or in arrears in proportion to the total amounts to
which the holders of such Units and all such shares are then entitled;
(iii) redeem or repurchase or otherwise acquire
for consideration shares of any parity stock; provided, however,
Page 86 of 94 Pages
that the Corporation may at any time redeem, repurchase or otherwise acquire
shares of any such parity stock in exchange for shares of any junior stock;
(iv) repurchase or otherwise acquire for
consideration (other than shares of junior stock) any Units of Series B
Preferred Stock, except in accordance with a repurchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of such
Units on the same terms.
(B) Series B Preferred Stock, in Units or in whole
shares, may be held only by: (1) An active employee (i) of the Company, (ii) of
a corporation in which the Company directly owns 100% of the voting shares, or
(iii) of a corporation, in an unbroken chain of corporations, in which the
Company indirectly (through the Company's ownership of 100% of the voting shares
of all intermediate corporations in that chain) owns 100% of the voting shares,
each such employee being hereinafter referred to as an "Active Employee";
(2) directors of the Company ("Directors"); or (3) Trusts for the exclusive
benefit of an Active Employee or Active Employees if the terms of the trust
provide that the Trustee shall vote all full shares of Series B Preferred Stock
of the Company credited to the account of said Active Employee or Active
Employees only in accordance with the written direction of said Active Employee
or Active Employees (hereinafter referred to as "Eligible Trusts"). A trust
shall be deemed to be for the exclusive benefit of an Active Employee even
though the trust makes provision for the holding of shares after an Active
Employee ceases to be such for such period as may be necessary in order to
effectuate distribution to him, or upon death, to his designated beneficiary. At
such time as (i) any person shall cease to be an Active Employee, (ii) any
Director shall cease to hold that position, or (iii) any Eligible Trust which is
a registered holder of Series B Preferred Stock ceases to be an Eligible Trust
for any reason whatsoever, each Unit or whole share of Series B Preferred Stock
held by or for such Active Employee, Director or Eligible Trust shall be
converted forthwith and automatically into one Unit or whole share, as the case
may be, of Series A Preferred Stock of the Company. At such time as any Unit or
whole share of Series B Preferred Stock is sold or transferred, by operation of
law or otherwise, to anyone, including the Company, who is not an Active
Employee, a Director or an Eligible Trust, each Unit or whole share so sold or
transferred shall be converted forthwith and automatically into one Unit or
whole share, as the case may be, of Series A Preferred Stock of the Company.
(C) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (A) of
this ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ or otherwise acquire such shares at such time and in
such manner.
Page 87 of 94 Pages
Section 5. Reacquired Shares. Any Units of Series B Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such Units shall, upon their cancellation, become authorized but unissued
Units of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, no distribution shall be
made (i) to the holders of shares of junior stock unless the holders of Units of
Series B Preferred Stock shall have received, subject to adjustment as
hereinafter provided in paragraph (B), the amount, per Unit, equal to the
aggregate per share amount to be distributed to holders of shares of common
stock, or (ii) to the holders of shares of parity stock, unless simultaneously
therewith distributions are made ratably on Units of Series B Preferred Stock
and all other shares of such parity stock in proportion to the total amounts to
which the holders of Units of Series B Preferred Stock are entitled under clause
(i) of this sentence and to which the holders of shares of such parity stock are
entitled, in each case upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on outstanding shares
of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock, or (iii) combine outstanding shares of Common Stock into
a smaller number of shares, then in each such case the aggregate amount to which
holders of Units of Series B Preferred Stock were entitled immediately prior to
such event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series B Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of
Page 88 of 94 Pages
Common Stock is converted or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide outstanding shares of Common Stock, or (iii) combine outstanding
Common Stock into a smaller number of shares, then in each such case the amount
set forth in the immediately preceding sentence with respect to the exchange or
conversion of Units of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which shall be the number of shares
of Common Stock that are outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption. The Units of Series B Preferred Stock shall not
be redeemable.
Section 9. Ranking. The Units of Series B Preferred Stock shall rank
junior to all other series of the Preferred Stock (other than the Series A
Junior Participating Preferred Stock) and to any other class of preferred stock
that hereafter may be issued by the Corporation as to the payment of dividends
and the distribution of assets, unless the terms of any such series or class
shall provide otherwise.
Section 10. Amendment. The Certificate, including, without limitation,
this resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with another corporation in any manner that
would alter or change the powers, preferences or special rights of the Series B
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding Units of Series B Preferred
Stock, voting separately as a class.
Section 11. Fractional Shares. The Series B Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series B Preferred Stock.
Section 12. Certain Definitions. As used herein with respect to the
Series B Preferred Stock, the following terms shall have the following meanings:
(A) The term "Class A Common Stock" means the class
of common stock designated as the Class A Common Stock, par value $1.00 per
share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of the common stock.
Page 89 of 94 Pages
(B) The term "Class B Common Stock" means the class
of common stock designated as the Class B Common Stock, par value $1.00 per
share, of the Corporation at the date hereof or any other class of stock
resulting from successive changes or reclassification of the common stock.
(C) The term "Common Stock" means the common stock,
par value $1.00 per share, of the Corporation at the date hereof or any other
stock resulting from successive changes or reclassifications of the common
stock, and includes both the Class A Common Stock and the Class B Common Stock.
(D) The term "junior stock" (i) as used in Section
4 means the common stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series B Preferred
Stock has preference or priority as to the payment of dividends and (ii) as used
in Section 6, shall mean the common stock and any other class or series of
capital stock of the Corporation over which the Series B Preferred Stock has
preference or priority in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
(E) The term "parity stock" (i) as used in Section
4, means any class or series of stock of the Corporation hereafter authorized or
issued ranking pari passu with the Series B Preferred Stock as to dividends and
(ii) as used in Section 6, shall mean any class or series of capital stock
ranking pari passu with the Series B Preferred Stock in the distribution of
assets on any liquidation, dissolution or winding up.
Page 90 of 94 Pages
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ Associates, Inc. has caused this
Certificate to be signed by its [President and Chief Executive Officer], and
attested by its Secretary as of the _____ day of November, 1996.
▇▇▇▇▇▇▇ ASSOCIATES, INC.
By:
-------------------------------
[name,title]
Attest:
By:
------------------------------
[name,title]
Page 91 of 94 Pages