EXHIBIT 4.1
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FORM OF RIGHTS AGREEMENT
dated as of January 4, 1999,
between
U.S. BANCORP
and
U.S. BANK NATIONAL ASSOCIATION, as Rights Agent
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Rights Associated With, and Integral to, Term Participating Preferred Stock
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TABLE OF CONTENTS
Page
PARTIES.......................................................................................1
RECITALS......................................................................................1
ARTICLE I
ISSUANCE AND FORM OF RIGHTS
SECTION 1.01. Issuance of Rights.............................................................1
SECTION 1.02. No Rights Certificates.........................................................1
SECTION 1.03. Exchange and Transfer of Rights................................................2
SECTION 1.04. Treatment of Holders of Rights.................................................2
ARTICLE II
DURATION AND EXERCISE OF RIGHTS
SECTION 2.01. Duration of Rights.............................................................2
SECTION 2.02. Exercise of Rights.............................................................2
SECTION 2.03. Adjustment Under Certain Circumstances.........................................6
SECTION 2.04. Delivery of Exercise Shares....................................................7
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF RIGHTS
SECTION 3.01. No Rights as Holders of Common Stock Conferred by Rights.......................7
SECTION 3.02. Holder of Rights May Enforce Rights............................................8
ARTICLE IV
CONCERNING THE RIGHTS AGENT
SECTION 4.01. Rights Agent...................................................................8
SECTION 4.02. Limitations on Rights Agent's Obligations......................................8
SECTION 4.03. Compliance With Applicable Laws................................................9
SECTION 4.04. Resignation and Appointment of Successor......................................10
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendments....................................................................11
SECTION 5.02. Merger, Consolidation, Sale, Transfer or Conveyance...........................12
SECTION 5.03. Notices and Demands to the Corporation and Rights Agent.......................12
SECTION 5.04. Addresses.....................................................................12
SECTION 5.05. APPLICABLE LAW................................................................12
SECTION 5.06. Obtaining of Governmental Approvals...........................................12
SECTION 5.07. Payment of Taxes..............................................................13
SECTION 5.08. Benefits of Rights Agreement..................................................13
SECTION 5.09. Headings......................................................................13
SECTION 5.10. Severability..................................................................13
SECTION 5.11. Counterparts..................................................................13
SECTION 5.12. Definitions...................................................................13
SECTION 5.13. Inspection of Agreement.......................................................14
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 4, 1999 (as modified,
amended or supplemented, this "Agreement"), between U.S. BANCORP, a Delaware
corporation (the "Corporation") and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Corporation is issuing its Term Participating
Preferred Stock, par value $1.00 per share, the terms of which are set forth in
the Certificate of Designations and Terms of Term Participating Preferred Stock,
dated January 4, 1999 (the "Preferred Stock"), together with rights (each, a
"Right") entitling the holder thereof to receive an amount of common stock, par
value $1.25 per share, of the Corporation (the "Common Stock"), to be determined
pursuant to the terms of the Rights; and
WHEREAS, the Corporation desires the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange, exercise and cancellation of
the Rights, and the Corporation wishes to set forth in this Agreement, among
other things, the provisions of the Rights and the terms and conditions upon
which the Rights may be issued, transferred, exchanged, exercised and canceled;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree as follows:
ARTICLE I
ISSUANCE AND FORM OF RIGHTS
SECTION 1.01. Issuance of Rights. Each Right shall represent
the right, subject to the provisions hereof, to receive as specified in Section
2.04 a number of shares of Common Stock determined according to the provisions
of Section 2.02 upon the maturity of the Preferred Stock. Rights shall be issued
only as an integral part of shares of the Preferred Stock and shall not be
separately transferable.
SECTION 1.02. No Rights Certificates.
(a) Rights shall be evidenced only by certificates for
Preferred Stock, which shall indicate by an appropriate legend that the holder
thereof holds one Right for each share of Preferred Stock held by such holder.
No certificates for Rights shall be issued.
(b) The terms "holder" and "holder of Rights" as used herein
shall mean any person in whose name the Preferred Stock to which such Right is
attached is registered upon the register relating to such Offered Securities. At
all times prior to December 31, 2003 or the date (the "Early Termination Date")
on which the election (the "Election") is made under Section 5 of any of the
Principal Employee Agreements, dated September 3, 1998, between the Corporation,
U.S. Bancorp Investments Inc. ("USBII") and each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the earlier of such dates, the "Term Date"), the
Corporation will, or will cause the registrar of the Preferred Stock to, make
available to the Rights Agent such information as to holders of the Preferred
Stock as may be necessary to keep the Rights Agent's records current.
SECTION 1.03. Exchange and Transfer of Rights.
(a) A Right may be exchanged or transferred only together with
the share of Preferred Stock to which such Right is attached, and only for the
purpose of effecting, or in conjunction with, an exchange or transfer of such
Preferred Stock. Furthermore, each transfer of a share of Preferred Stock on the
register relating to such Preferred Stock shall operate also to transfer the
Right to which such Preferred Stock is attached.
(b) The Rights Agent shall keep, at its corporate trust
office, books in which, subject to such reasonable regulations as it may
prescribe, it shall register Rights and transfers, exchanges, exercises and
cancellations of outstanding Rights.
SECTION 1.04. Treatment of Holders of Rights. Every holder of
a Right, by accepting the Preferred Stock to which such Right is attached,
consents and agrees with the Corporation, the Rights Agent and with every
subsequent holder of such Right that until the Right is transferred on the books
of the Rights Agent, the Corporation and the Rights Agent may treat the
registered holder of such Right as the absolute owner of the Right for any
purpose and as the person entitled to exercise such Right, any notice to the
contrary notwithstanding. In addition, each holder of a Right agrees to treat
such Right for United States federal income tax purposes as an integral part of
the Preferred Stock and not as separate property.
ARTICLE II
DURATION AND EXERCISE OF RIGHTS
SECTION 2.01. Duration of Rights. Each Right shall be deemed
exercised in full on the Term Date. After 5:00 P.M., Minneapolis, Minnesota
time, on the Term Date, the Rights shall become void, and all rights of the
holder of a Right under this Agreement (other than the right to receive Common
Stock pursuant to Sections 2.02 and 2.04) shall cease.
SECTION 2.02. Exercise of Rights.
(a) Each Right shall be deemed exercised on the Term Date
without the requirement of any action on the part of the holder thereof.
(b) On the Term Date, a holder of a Right shall be entitled to
receive a number of shares of Common Stock (the "Exercise Shares"), to be
determined as soon after the Term Date as is reasonably practicable and payable
as provided in Section 2.04, equal to the sum of (i) ten and (ii) the quotient
of (A)(1) if the Election has been made, the Early Termination Amount determined
in accordance with paragraph (d) of this Section 2.02 and (2) otherwise, the
Performance Amount determined in accordance with paragraph (c) of this Section
2.02 and (B)
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the Average Closing Price for the last day of the Reference Period multiplied by
the number of shares of Preferred Stock initially issued; provided that the
number of Exercise Shares shall be subject to adjustment as provided in Section
2.03. As used herein, the term "Average Closing Price" means, for any date, the
average of the closing prices per share of Common Stock reported on the New York
Stock Exchange (the "NYSE") Composite Transactions Tape (as published in the
Wall Street Journal or, if not therein, in another authoritative source) over
the period of five Trading Days ending on such date of determination, adjusted
as necessary to take account of any stock dividend, stock split, reverse stock
split or other similar change of the shares of Common Stock, or any
reclassification, recapitalization, merger, consolidation or other
reorganization affecting the shares of Common Stock ("Stock Event") occurring
during such five-day period, the term "Trading Day" means any day on which a
number of shares of Common Stock is traded on the NYSE equal to at least 70% of
the average daily volume of trading in Common Stock for the previous 20 days on
which the NYSE was open for business, and the term "Reference Period" means the
period beginning on January 1, 1999 and ending on the Term Date.
(c) The "Performance Amount" shall be determined according to
the following formula:
x = {a x Sum (i = 1 to 5) [w(i) e(i)]} - $75,000,000
where x is the Performance Amount, a is the multiple determined, pursuant to
Schedule 2.02(c) hereto, to be appropriate in light of the value calculated
for [Sum [w(i) e(i)]] is the total consolidated earnings before taxes of the
Business (including gains or losses relating to Retained Warrants and
Retained Fund Interests but calculated without regard to purchase accounting
adjustments or the effect of any compensation expense resulting from issuance
of securities (and cash payments with respect to taxes in connection
therewith) pursuant to the Incentive Compensation Agreement (as defined
below) or any Employee Agreement (as defined in the Incentive Compensation
Agreement), other than with respect to Formula Incentive Compensation (as
defined therein) payable under the Incentive Compensation Agreement, and
excluding any charges associated with any additional compensation expense
paid to a holder of Rights on account of taxes imposed as a result of a
dispute raised by the Internal Revenue Service relating to the valuation of
the Rights) in Reference Year (i) of the Reference Period, calculated in
accordance with generally accepted accounting principles as in effect from
time to time and consistent with the Corporation's practices during the
Reference Period (as applied to the Business) (with securities valuations
being determined as provided in Section 2.02(f) below) (but assuming for this
purpose that compensation expense is not less than 60% of Net Revenues) and
reduced for charges for capital and funding (as provided in Section 9 of the
Incentive Compensation Agreement), and w(i) is 0.4 if i is 1, 0.6 if i is 2
and 1.0 if i is 3 or higher. As used herein, (i) the term "Business" means
the investment banking and broker-dealer business (principally involving
high-yield securities) formerly conducted by Libra Investments, Inc.
("Libra"), including (A) growth in such business and any other lines of
business operated under the control of the Principal Employee Committee of
USBII (the "PEC") but excluding any business formerly conducted by USBII (and
any growth in such business) and (B) management of an investment account or
accounts established by the Corporation under management of
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USBII pursuant to such investment criteria as may be agreed by the Corporation
and the PEC, as amended from time to time, (ii) the term "Net Revenue" means Net
Revenues as determined pursuant to Section 3 of the Incentive Compensation
Agreement, dated as of January 4, 1999, by and among the Corporation, USBII, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"Incentive Compensation Agreement"), (iii) the term "Retained Warrants" means
any warrants received by U.S. Bancorp Investments, Inc., except for those
distributed pursuant to Section 6 of the Incentive Compensation Agreement, (iv)
the term "Retained Fund Interests" means the interest in the managing member of
the general partner of any fund formed by or at the direction of USBII (or its
predecessor) which is held directly or indirectly by USBII and (v) the term
"Reference Year" means each period during the Reference Period beginning on
January 1 of each year and ending on December 31 of such year (or, in the case
of the last Reference Year in the Reference Period, ending on the Term Date).
(d) The "Early Termination Amount" shall be zero, if the
events giving rise to the Election occur on or before January 31, 2000, and
otherwise shall be determined according to the following formula:
y = {a x Sum (i = 1 to 5) [w(i) e(i)]} - $75,000,000
where y is the Early Termination Amount and all other variables are as defined
in paragraph (c) of this Section 2.02, except that
(i) if the events giving rise to the Election occur
between February 1, 2000 and December 31, 2000,
then 'e(2)' shall equal the consolidated earnings
generated during the complete months in such
Reference Year (including the first month of such
Reference Year) prior to the date such events
occur, multiplied by 12 and divided by the number
of months used in calculating such consolidated
earnings;
(ii) if the events giving rise to the Election occur after
December 31, 2000, then 'e' for the Reference Year in
which such events occur shall equal the trailing 12
complete months' consolidated earnings at the time
such events occur; and
(iii) for each Reference Year after the Reference Year
in which the events giving rise to an Election
occur, 'e' shall be deemed to equal 'e(k)(i)'
where 'e(k)' is equal to the value of 'e(i)' for
the Reference Year in which the events giving
rise to an Election occur, as calculated pursuant
to clause (ii), above.
Example calculations are attached herein as Exhibit A.
(e) The Corporation shall arrange for an audit (or similar
procedure) of the books and records relating to the Business to be conducted by
an accounting firm selected by the Corporation for each Reference Year during
the Reference Period. For purposes of such audit, securities shall be valued as
provided in Section 2.02(f). A copy of the proposed audit report
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shall, upon completion, be promptly provided to the Corporation and the Rights
Agent, and the Rights Agent shall promptly provide a copy of such proposed audit
report to each holder of Rights. If, within 30 days following the provision of
each such report by the Rights Agent to the holders of Rights, the holders of a
majority of Rights notify the Rights Agent (any such notice, which shall specify
the nature and extent of the disagreement asserted, a "Dispute Notice") that
such holders disagree with the calculation of "x" or "y" implied by such
proposed audit report by more than $1 million, the Corporation shall agree with
the holders of a majority of Rights (or their attorneys-in-fact) as to the
designation of another accounting firm to conduct an audit of the books and
records of the Business; provided that if the Corporation and the holders of a
majority of Rights (or their attorneys-in-fact) cannot so agree, the second
audit shall be conducted by an independent "Big Five" accounting firm (which
shall not be the Corporation's auditor) selected by lot. The results relating to
the second audit shall be conclusive. The foregoing procedures shall be the
exclusive procedure for the resolution of any disputes with respect to such
audits.
(f) Whenever valuation of any securities is required in
connection with this Agreement or the audits discussed in paragraph (e) above,
the value of such securities shall equal their fair market value, determined as
follows:
(i) The PEC shall in good faith determine the fair market
value of all securities held by USBII in connection
with the Business. The determination of the fair
market value of all securities other than Freely
Tradeable Securities shall be based upon all relevant
factors, including such of the following factors as
may be relevant in the case of any security: current
financial position and current and historical
operating results of the issuer; sales prices in
recent public or private transactions involving the
same or similar securities or securities into which
securities held by USBII are convertible, including
transactions on any exchange on which such securities
are listed or in the over-the-counter market; recent
trading volume of the class of securities to which
the security belongs; contractual and statutory
provisions affecting USBII's ability to transfer the
security or affecting the liquidity of the security,
including USBII's right, if any, to require
registration of the security under the Securities Act
of 1933, as amended ("Securities Act"); significant
recent developments involving the issuer, including
pending mergers and acquisitions; the price paid by
USBII to acquire the security; and the percentage of
the issuer's outstanding securities that is owned by
USBII. The fair market value on any date of
determination of any security owned by USBII that is
a Freely Tradeable Security shall be the last
reported sale price of such security on such date on
the exchange where it is primarily traded or, if such
security is not traded on an exchange, the last
reported sale price of such security on such date on
the NASDAQ National Market System or Small Cap
Market. In making any determination of the fair
market value of any securities, no allowance of any
kind shall be made for goodwill, the name of the
Corporation, USBII or any member of the PEC, USBII's
office records, files or statistical data or any
intangible assets of USBII, the PEC or the
Corporation.
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For purposes of this Agreement, a security shall be
deemed to be a "Freely Tradeable Security" as of any
date of determination if, on such date, (a) such
security can be sold by USBII to the general public
(including a sale by any person following a
distribution of such security to such person from
USBII, even though a sale by USBII of such security,
if not so distributed to such person, might otherwise
be restricted) without the necessity of any further
federal, state or local governmental consent,
approval or filing (other than any notice filings of
the type required pursuant to Rule 144(h) under the
Securities Act), (b) such security is listed or
quoted on a Public Securities Market and (c) such
security is not at the time subject to any
contractual restrictions on the transfer thereof by
USBII.
(ii) After any such determination of the value of
securities, the PEC shall provide written notice of
such determination ("PEC Notice") to the Board of
Directors of USBII (the "Board") (the date of any
such notice, a "Notice Date"). If within 10 Business
Days after the Notice Date the PEC receives written
notice from the members of the Board who are not also
members of the PEC setting forth objection to any
specific item of such determination (the date of any
such notice of objection, a "Reply Date"), and such
members of the Board thereafter do not, within 45
days after the Notice Date, approve such
determination or any revised determination
subsequently submitted by the PEC, then the items in
question shall be determined (in accordance with
clause (i) above) by an investment banking firm
selected by the PEC and approved by such members of
the Board, and the determination of such investment
banking firm shall be binding upon the parties
hereto. The fees and expenses of such investment
banking firm shall be borne by USBII. The valuations
set forth in a PEC Notice that are not timely
objected to by the members of the Board who are not
also members of the PEC shall be deemed to be the
correct valuations for the relevant purposes.
SECTION 2.03. Adjustment Under Certain Circumstances. The
number of Exercise Shares to be issued upon the exercise of each Right shall be
subject to adjustment upon a Stock Event; provided that no such adjustment in
the number of shares of Common Stock to be issued upon exercise of the Rights
will be required until cumulative adjustments require an adjustment of at least
1% of such number. All such adjustments will be made at the discretion and on
the order of the Corporation.
SECTION 2.04. Delivery of Exercise Shares.
(a) The Corporation shall, by 5:00 P.M., Minneapolis,
Minnesota time, on the third Business Day next succeeding the date on which the
number of Exercise Shares is determined, execute, issue and deliver to the
Rights Agent a number of shares of Common Stock equal to the product of (i) the
Exercise Shares and (ii) the number of Rights that have then been deemed
exercised as provided in Section 2.02. Upon receipt of such Common Stock, the
Rights Agent shall, by 5:00 P.M. Minneapolis, Minnesota time, on the seventh
Business Day next succeeding the date on which the number of Exercise Shares is
determined, transmit to or upon
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the order of the holder of each exercised Right such holder's pro rata portion
of such Common Stock. As used herein, the term "Business Day" means any day that
is not a Saturday or Sunday and is not a legal holiday or a day on which banking
institutions generally are authorized or obligated by law or regulation to close
in the principal place of business of the Rights Agent.
(b) The accrual of dividends, if any, on the Common Stock
issued upon the deemed exercise of any Right will be governed by the terms of
the Corporation's certificate of incorporation and such Common Stock. From and
after the issuance of such Common Stock, the rights of the former holder of the
Rights exercised shall be governed by, and shall be subject to, the terms and
provisions of such certificate of incorporation and Common Stock.
(c) If Common Stock issued hereunder is subject to
restrictions pursuant to an agreement between the Corporation and the holder to
whom it is issued or, to the extent the Corporation is aware of any such
restriction, the certificate or certificates representing such Common Stock
shall bear an appropriate legend. Nothing in this Agreement shall obligate the
Corporation to issue unrestricted stock to a holder of Rights upon the exercise
of such Rights.
(d) Notwithstanding anything to the contrary in this Section
2.04, no fractional shares of Common Stock will be issued, but in lieu thereof
the Corporation will pay the cash value of any fractional shares of Common Stock
otherwise issuable.
(e) The Corporation shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issuance of Exercise Shares. If any such transfer
is involved, the Corporation shall not be required to issue or deliver any
Exercise Shares until such tax or other charge shall have been paid or it has
been established to the Corporation's satisfaction that no such tax or other
charge is due.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF
HOLDERS OF RIGHTS
SECTION 3.01. No Rights as Holders of Common Stock Conferred
by Rights. No Right shall entitle the holder thereof to any of the rights of a
holder of Common Stock, including, without limitation, the right to receive
dividends, if any, or payments upon the liquidation, dissolution or winding up
of the Corporation or to exercise voting rights, if any.
SECTION 3.02. Holder of Rights May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of any
Right, without the consent of the Rights Agent or the holder of any other Right,
may, on such holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the
Corporation to enforce, or otherwise in respect of, such holder's right to
exercise the Rights held by such holder in the manner provided in this
Agreement.
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ARTICLE IV
CONCERNING THE RIGHTS AGENT
SECTION 4.01. Rights Agent. The Corporation hereby appoints U.
S. Bank National Association as Rights Agent of the Corporation in respect of
the Rights upon the terms and subject to the conditions herein set forth, and
U.S. Bank National Association hereby accepts such appointment. The Rights Agent
shall have the powers and authority granted to and conferred upon it hereby and
such further powers and authority to act on behalf of the Corporation as the
Corporation may hereafter grant to or confer upon it.
SECTION 4.02. Limitations on Rights Agent's Obligations. The
Rights Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Corporation
agrees and to all of which the rights hereunder of the holders from time to time
of the Rights shall be subject:
(a) Compensation and Indemnification. The Corporation agrees
to pay the Rights Agent compensation to be agreed upon with the
Corporation for all services rendered by the Rights Agent and to
reimburse the Rights Agent for all reasonable out-of-pocket expenses
(including reasonable counsel fees) incurred by the Rights Agent in
connection with the services rendered by it hereunder. The Corporation
also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence,
bad faith or breach of this Agreement on the part of the Rights Agent,
arising out of or in connection with its acting as Rights Agent
hereunder.
(b) Agent for the Corporation. In acting in the capacity of
Rights Agent under this Agreement, the Rights Agent is acting solely as
agent of the Corporation and does not assume any obligation or
relationship of agency or trust with any of the owners or holders of
the Rights except as expressly set forth herein.
(c) Counsel. The Rights Agent may consult with counsel
satisfactory to it (which may be counsel to the Corporation), and the
advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the advice of such
counsel.
(d) Documents. The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) Certain Transactions. The Rights Agent, and its officers,
directors and employees, may become the owner of, or acquire any
interest in, any Right, with the same rights that it or they would have
were it not the Rights Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial
or other transaction with the Corporation and may act on, or as a
depositary,
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trustee or agent for, any committee or body of holders of Rights,
Preferred Stock or Common Stock or other securities or obligations of
the Corporation as freely as if it were not the Rights Agent hereunder.
Nothing in this Agreement shall be deemed to prevent the Rights Agent
from acting as trustee under any indenture governing any security or
obligation.
(f) No Liability for Invalidity. The Rights Agent shall not be
under any responsibility with respect to the validity or sufficiency of
this Agreement or the execution and delivery hereof (except the due
execution and delivery hereof by the Rights Agent).
(g) No Responsibility for Recitals. The recitals contained
herein shall be taken as the statements of the Corporation, and the
Rights Agent assumes no responsibility hereby for the correctness of
the same.
(h) No Implied Obligations. The Rights Agent shall be
obligated to perform only such duties as are specifically set forth
herein and no implied duties or obligations shall be read into this
Agreement against the Rights Agent. The Rights Agent shall not be under
any obligation to take any action hereunder which may tend to involve
it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it. The
Rights Agent shall have no duty or responsibility in case of any
default by the Corporation in the performance of its covenants or
agreements contained herein or in the case of the receipt of any
written demand from a holder of a Right with respect to such default,
including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 5.03 hereof, to make
any demand upon the Corporation.
SECTION 4.03. Compliance With Applicable Laws. The Rights
Agent agrees to comply with all applicable federal and state laws imposing
obligations on it in respect of the services rendered by it under this Agreement
and in connection with the Rights, including (but not limited to) the provisions
of United States federal income tax laws regarding information reporting and
backup withholding. The Rights Agent expressly assumes all liability for its
failure to comply with any such laws imposing obligations on it, including (but
not limited to) any liability for its failure to comply with any applicable
provisions of United States federal income tax laws regarding information
reporting and backup withholding.
SECTION 4.04. Resignation and Appointment of Successor.
(a) The Corporation agrees, for the benefit of the holders
from time to time of the Rights, that there shall at all times be a Rights Agent
hereunder until all the Rights issued hereunder have been exercised or have
expired in accordance with their terms, which Rights Agent shall be a bank or
trust company organized under the laws of the United States of America or one of
the states thereof, which is authorized under the laws of the jurisdiction of
its organization to exercise corporate trust powers, has a combined capital and
surplus of at least $50,000,000 and has an office or an agent's office in the
United States of America.
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(b) The Rights Agent may at any time resign as such agent by
giving written notice to the Corporation of such intention on its part,
specifying the date on which it desires such resignation to become effective;
provided that such date shall not be less than three months after the date on
which such notice is given, unless the Corporation agrees to accept such notice
less than three months prior to such date of effectiveness. The Corporation may
remove the Rights Agent at any time by giving written notice to the Rights Agent
of such removal, specifying the date on which it desires such removal to become
effective. Such resignation or removal shall take effect upon the appointment by
the Corporation, as hereinafter provided, of a successor Rights Agent (which
shall be a bank or trust company qualified as set forth in paragraph (a) of this
Section 4.04) and the acceptance of such appointment by such successor Rights
Agent. The obligation of the Corporation under paragraph (a) of this Section
4.02 shall continue to the extent set forth therein notwithstanding the
resignation or removal of the Rights Agent.
(c) If at any time the Rights Agent shall resign, or shall
cease to be qualified as set forth in paragraph (a) of this Section 4.04, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under any
applicable federal or state bankruptcy or insolvency law or similar law, or make
an assignment for the benefit of its creditors or consent to the appointment of
a receiver, conservator or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or to meet its debts as
they mature, or if a receiver or custodian of it or of all or any substantial
part of its property shall be appointed, or if an order of any court shall be
entered for relief against it under the provisions of any applicable federal or
state bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Rights Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Rights
Agent, qualified as set forth in paragraph (a) of this Section 4.04, shall be
appointed by the Corporation by an instrument in writing, filed with the
successor Rights Agent. Upon the appointment as herein provided of a successor
Rights Agent and acceptance by the latter of such appointment, the Rights Agent
so superseded shall cease to be Rights Agent under this Agreement.
(d) Any successor Rights Agent appointed under this Agreement
shall execute, acknowledge and deliver to its predecessor and to the Corporation
an instrument accepting such appointment, and thereupon such successor Rights
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Rights Agent under
this Agreement, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Rights Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor, as Rights Agent under this Agreement.
(e) Any corporation into which the Rights Agent may be merged
or converted or any corporation with which the Rights Agent may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Rights Agent shall be a party, or any corporation to which the Rights
Agent shall sell or otherwise transfer all or substantially all the assets and
business of the Rights Agent shall be the successor Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement, including, without limitation, any
successor to the Rights Agent
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first named above, provided in each case, that any such resulting Rights Agent
shall be qualified as set forth in paragraph (a) of this Section 4.04.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendments.
(a) This Agreement and the Rights may be amended by the
parties hereto by executing a supplemental rights agreement ("Supplemental
Agreement"), without the consent of the holder of any Right, for the purpose of
(i) curing any ambiguity, or curing, correcting or supplementing any defective
provision contained herein, or making any other provisions with respect to
matters or questions arising under this Agreement that are not inconsistent with
the provisions of this Agreement, (ii) evidencing the succession of another
corporation to the Corporation and the assumption by any such successor of the
covenants of the Corporation contained in this Rights Agreement and the Rights,
(iii) evidencing and providing for the acceptance of appointment by a successor
Rights Agent with respect to the Rights, (iv) adding to the covenants of the
Corporation for the benefit of the holders of the Rights or surrendering any
right or power conferred upon the Corporation under this Agreement, (v) amending
this Agreement and the Rights in any manner that the Corporation may deem to be
necessary or desirable; provided, however, that no amendment provided for in
clauses (i) through (v) which adversely affect the interests of the holders of
such Rights in any material respect may be made without the prior consent of the
holders of not fewer than 66 2/3% in number of the unexercised Rights.
(b) The Corporation and the Rights Agent may amend this
Agreement and the Rights by executing a Supplemental Agreement with the consent
of the holders of not fewer than 66-2/3% in number of the unexercised Rights
affected by such amendment, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the holders of the Rights under this
Agreement; provided, however, that, without the consent of each holder affected
thereby, no such amendment may be made that (i) changes the Rights so as to
reduce the number of shares of Common Stock to be issued upon exercise of the
Rights, (ii) amends the Term Date, or (iii) reduces the number of unexercised
Rights the consent of the holders of which is required for amendment of this
Agreement or the Rights.
SECTION 5.02. Merger, Consolidation, Sale, Transfer or
Conveyance. The Corporation may consolidate or merge with or into any other
corporation or sell, lease, transfer or convey all or substantially all of its
assets to any other corporation; provided that (i) either (x) the Corporation is
the continuing corporation or (y) the corporation (if other than the
Corporation) that is formed by or results from any such consolidation or merger
or that receives such assets is a corporation organized and existing under the
laws of the United States of America or a state thereof and such corporation
assumes the obligations of the Corporation with respect to the performance and
observance of all of the covenants and conditions of this Agreement to be
performed or observed by the Corporation, (ii) the Exercise Shares shall be
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shares of common stock of a public corporation, and if the continuing
corporation is not a public corporation, then either (x) the Exercise Shares
shall be shares of common stock of a public parent or (y) the value of the
Exercise Shares shall be paid in cash and (iii) the Corporation or such
successor corporation, as the case may be, must not immediately be in default
under this Agreement. If at any time there shall be any consolidation or merger
or any sale, lease, transfer, conveyance or other disposition of all or
substantially all of the assets of the Corporation, the successor or assuming
corporation shall succeed to and be substituted for the Corporation, with the
same effect as if it had been named herein as the Corporation; the Corporation
shall thereupon be relieved of any further obligation hereunder or under the
Rights, and, in the event of any such sale, lease, transfer, conveyance (other
than by way of lease) or other disposition, the Corporation as the predecessor
corporation may thereupon or at any time thereafter be dissolved, wound up or
liquidated.
SECTION 5.03. Notices and Demands to the Corporation and
Rights Agent. If the Rights Agent shall receive any notice or demand addressed
to the Corporation by the holder of a Right, the Rights Agent shall promptly
forward such notice or demand to the Corporation.
SECTION 5.04. Addresses. Any communications from the
Corporation to the Rights Agent with respect to this Agreement shall be
addressed to U.S. Bank National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ South, MPFP 3009,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and any communications
from the Rights Agent to the Corporation with respect to this Agreement shall be
addressed to U.S. Bancorp, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ South, MPFP 3007, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇. Mitau (or such other address as shall be
specified in writing by the Rights Agent or by the Corporation, as the case may
be). The Corporation or the Rights Agent shall give notice to the holders of
Rights by mailing written notice by first class mail, postage prepaid, to such
holders as their names and addresses appear in the books and records of the
Rights Agent or on the register of the Preferred Stock.
SECTION 5.05. APPLICABLE LAW. THIS AGREEMENT AND EACH
RIGHT ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
SECTION 5.06. Obtaining of Governmental Approvals. The
Corporation shall from time to time take all action which may be necessary to
obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under United
States federal and state laws, which may be or become necessary or appropriate
in connection with the issuance, sale, transfer and delivery of the Rights, the
exercise of the Rights, the issuance, sale, transfer and delivery of the Common
Stock to be issued upon exercise of Rights or upon the expiration of the period
during which the Rights are exercisable.
SECTION 5.07. Payment of Taxes. The Corporation will pay all
stamp and other duties, if any, to which, under the laws of the United States of
America, this Agreement or the original issuance of the Rights may be subject.
SECTION 5.08. Benefits of Rights Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof or thereof is intended, or shall be construed, to confer upon,
or give to, any person or corporation
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other than the Corporation, the Rights Agent and their respective successors and
assigns, and the holders of the Rights any right, remedy or claim under or by
reason of this Agreement or the Rights or of any covenant, condition,
stipulation, promise or agreement hereof or thereof; and all covenants,
conditions, stipulations, promises and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the Corporation and the Rights
Agent and their respective successors and assigns and of the holders of the
Rights.
SECTION 5.09. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 5.10. Severability. If any provision in this Agreement
shall be or become invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions, or of such
provisions in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 5.11. Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
SECTION 5.12. Definitions. For all purposes of this Rights
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
such computation;
(b) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Rights Agreement; and
(c) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Rights Agreement as a whole and
not to any particular Article, Section or other subdivision.
SECTION 5.13. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Rights Agent and at the office of the Corporation at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, for inspection by any holder
of Rights.
-13-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
U.S. BANCORP
By:
--------------------------------
Name:
Title:
Attest:
---------------------------
Assistant Secretary
U.S. BANK NATIONAL ASSOCIATION
By:
--------------------------------
Name:
Title:
Attest:
---------------------------
Assistant Secretary
Schedule 2.02(c)
a shall be an appropriate multiple calculated as a function of
[Sum [w(i) e(i)]] as follows:
1. The value of [Sum [w(i) e(i)]] shall be rounded down to
the nearest whole multiple of 1,000,000 ("Minimum
[Sum [w(i) e(i)]]").
2. If the Minimum [Sum [w(i) e(i)]] is a whole multiple of
5, the value of a shall be as indicated in the Calculation
Matrix below.
3. If the Minimum [Sum [w(i) e(i)]] is not a whole multiple
of 5, the value of a shall be determined by straight-line
interpolation between the two increments in the Calculation
Matrix closest in value to Minimum [Sum [w(i) e(i)]].
Calculation Matrix
Minimum [Sum [w(i) e(i)]] [Sum [w(i) e(i)]]
(in millions) a (in millions) a
------------------------------------------------------------------------------------------------------------------------------------
$40 1.88 $145 2.37
$45 1.67 $150 2.41
$50 1.50 $155 2.45
$55 1.36 $160 2.47
$60 1.35 $165 2.48
$65 1.40 $170 2.50
$70 1.60 $175 2.52
$75 1.70 $180 2.53
$80 1.76 $185 2.55
$85 1.82 $190 2.57
$90 1.88 $195 2.58
$95 1.94 $200 2.60
$100 2.00 $205 2.61
$105 2.04 $210 2.62
$110 2.08 $215 2.63
$115 2.12 $220 2.64
$120 2.16 $225 2.66
$125 2.20 $230 2.67
$130 2.25 $235 2.68
$135 2.29 $240 2.69
$140 2.33 $245 2.70
EXHIBIT A
Example calculations of the "Early Termination Amount"
Example 1
- Termination occurs during June 2000.
- Calendar 1999 total consolidated earnings of
the business formerly conducted by Libra
Investments, Inc. $12.0
- January-May 2000 total consolidated earnings
$8.0
- Divided by the number of complete months 5
elapsed ---------
1.6
- Multiplied by 12 months 12
--------
$19.2
(i) e(i) w(i) Weighted e(i)
--- ---- ---- -------------
1999 $12.0 0.40 $ 4.8
2000 $19.2 0.60 $11.5
2001 $19.2 1.00 $19.2
2002 $19.2 1.00 $19.2
2003 $19.2 1.00 $19.2
----------
Sum of weighted e(i) $73.9
a - (determined pursuant to schedule 2.02(c)) 1.66 x
----------
$ 122.0
Early Termination Amount ($75.0)
----------
$47.0
----------
Example 2
- Termination occurs during August 2001
- Calendar 1999 total consolidated earnings of
the business formerly conducted by Libra
Investments, Inc. $12.0
- Calendar 2000 total consolidated earnings
$18.0
- August 2000-December 2000 earnings $8.0
- January 2000-July 2001 earnings $12.0
---------
- Last 12-month consolidated earnings prior to $20.0
Early Termination
(i) e(i) w(i) Weighted e(i)
--- ---- ---- -------------
1999 $12.0 0.40 $ 4.8
2000 $18.0 0.60 $10.8
2001 $20.0 1.00 $20.0
2002 $20.0 1.00 $20.0
2003 $20.0 1.00 $20.0
----------
Sum of weighted e(i) $75.6
a - (determined pursuant to schedule 2.02(c)) 1.7 x
----------
$ 128.5
Early Termination Amount ($75.0)
----------
$53.5
----------