AMENDED AND RESTATED RIGHTS AGREEMENT HANCOCK FABRICS, INC. and CONTINENTAL STOCK TRANSFER & TRUST COMPANY Rights Agent Rights Agreement Dated as of March 23, 1987 as Amended and Restated through March 20, 2006
Exhibit
10.2
AMENDED
AND RESTATED RIGHTS AGREEMENT
▇▇▇▇▇▇▇
FABRICS, INC.
and
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
Rights
Agent
Dated
as of March 23, 1987 as
Amended
and Restated
through
March
20, 2006
TABLE
OF CONTENTS
|
Section
1.
|
Certain
Definitions
|
3
|
|
Section
2.
|
Rights
Agent
|
6
|
|
Section
3.
|
Issue
of Right Certificates
|
9
|
|
Section
4.
|
Form
of Right Certificates
|
10
|
|
Section
5.
|
Countersignature
and Registration
|
11
|
|
Section
6.
|
Transfer,
Split-Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates; Cancellation and
Destruction
of Right Certificates
|
11
|
|
Section
7.
|
Exercise
of Rights; Purchase Price; Expiration Date or Rights; Fractional
Rights
and Fractional Shares of Stock
|
11
|
|
Section
8.
|
Reservation
and Availability of Shares of Common Stock
|
13
|
|
Section
9.
|
Right
Holders
|
14
|
|
Section
10.
|
Adjustment
of Number of Shares; Exchange Option
|
15
|
|
Section
11.
|
Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
|
16
|
|
Section
12.
|
Adjustments
of Purchase Price, Number of Shares or Number of Rights
|
17
|
|
Section
13.
|
Redemption
|
21
|
|
Section
14.
|
Notice
of Certain Events
|
21
|
|
Section
15.
|
Notices
|
22
|
|
Section
16.
|
Supplements
and Amendments
|
22
|
|
Section
17.
|
Determinations
and Actions by the Board of Directors
|
22
|
|
Section
18.
|
Successors
|
23
|
|
Section
19.
|
Benefits
of this Agreement
|
23
|
|
Section
20.
|
Severability
|
23
|
|
Section
21.
|
Governing
Law
|
24
|
|
Section
22.
|
Counterparts
|
24
|
|
Section
23.
|
Descriptive
Headings
|
24
|
i
Agreement,
dated as of March 23, 1987, between ▇▇▇▇▇▇▇ Fabrics, Inc., a Delaware
corporation (the “Company”), and Continental Stock Transfer & Trust Company,
as Rights Agent (the “Rights Agent”), as amended and restated
through March 20, 2006.
The
Board
of Directors of the Company (the “Board”) has authorized and declared a dividend
of one right (a “Right”) for each share of Common Stock (as hereinafter defined)
of the Company and has authorized the issuance of one Right with respect to
each
share of Common Stock that shall become outstanding between May 4, 1987 and
the
earliest of the Distribution Date, the Redemption Date and the Expiration Date
(as such terms are hereinafter herein), each Right initially representing the
right to purchase one share of Common Stock.
Accordingly,
in consideration of the premises and the mutual agreements herein set forth,
the
parties hereby agree as follows:
Section
1. Certain
Definitions.
For
purposes of this Agreement, the following terms have the meanings
indicated:
(a) “Acquiring
Person” shall mean any Person who or which, together with all Affiliates and
Associates of such Person, shall be the beneficial owner of 20% or more of
the
Common Stock then outstanding (other than as a result of a Permitted Offer),
but
shall not include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any entity
holding shares of capital stock of the Company for or pursuant to the terms
of
any such plan in its capacity as an agent or trustee for any such plan.
Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as
the result of an acquisition of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Stock of the
Company then outstanding; provided, however, that if a Person shall become
the
Beneficial Owner of 20% or more of the Common Stock of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock of the Company, then such Person shall be deemed to
be an
“Acquiring Person.” Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an Acquiring Person, as defined pursuant to
the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an “Acquiring Person” for any purposes of this Agreement.
(b) “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations, as in effect on the date of
this Agreement, under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
(c) A
Person
shall be deemed the “beneficial owner” of and shall be deemed to “beneficially
own” any securities:
3
(i) that
such
Person or any Affiliate or Associate of such Person beneficially owns, directly
or indirectly;
(ii) that
such
Person or any Affiliate or Associate of such Person has (A) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether or not
in
writing) (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the beneficial owner of securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or
any Affiliate or Associate of such Person until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote or to dispose of
pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the beneficial
owner of any security if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy or consent given to
such
Person in response to a public proxy or consent solicitation made pursuant
to,
and in accordance with, the applicable rules and regulations of the Exchange
Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or
any comparable or successor report); or
(iii) that
are
beneficially owned, directly or indirectly, by any other Person with which
such
Person or any Affiliate or Associate of such Person has any agreement,
arrangement or understanding (whether or not in writing) (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to clause
(B)
of subparagraph (ii) of this paragraph) or disposing of any securities of the
Company.
(d) “Business
Day” shall mean any day other than a Saturday, Sunday, or a day on which banking
institutions in either the State of New York or Mississippi are authorized
or
obligated to close by law or executive order.
(e) With
respect to any given date, “close of business” shall mean 5:00 p.m., Central
Time, on such date; provided, however, that if such date is not a Business
Day
it shall mean 5:00 p.m., Central Time, on the next succeeding Business
Day.
(f) The
“closing price” of the Common Stock or of the Rights, as applicable, for any day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way,
in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York
Stock Exchange or, if the Common Stock or the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on
the principal national securities exchange on which the Common Stock or the
Rights are listed or admitted to trading or, if the Common Stock or the Rights
are not listed or admitted to trading on any national securities exchange,
the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System (“NASDAQ”)
or such other system then in use, or, if on any such date the Common Stock
or
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 Common Stock or the Rights selected by the Board.
4
(g) “Common
Stock” shall mean the shares of common stock, $.01 par value, of the Company.
When used with reference to any Person other than the Company, “common stock”
shall mean the capital stock (or equity interest) with the greatest voting
power
of such other Person or, if such Person is a Subsidiary of another Person,
the
Person or Persons that ultimately control such first-mentioned
Person.
(h) “Distribution
Date” shall mean the earlier of (i) the tenth day after the Stock Acquisition
Date, or (ii) the tenth day (or such later date as may be determined by an
action of the Company’s Board of Directors) after the date of the commencement
of, or first public announcement of the intention of any Person (other than
the
Company, a Subsidiary of the Company, an employee benefit plan of the Company
or
of a Subsidiary of the Company, or any entity holding shares of capital stock
of
the Company for or pursuant to the terms of any such plan in its capacity as
an
agent or trustee for any such plan) to commence, a tender or exchange offer
(other than a Permitted Offer) the consummation of which would result in
beneficial ownership by a Person of 30% or more of the outstanding Common
Stock.
(i) “Expiration
Date” shall mean March 4, 2011.
(j) “Permitted
Offer” shall mean a tender or exchange offer which is for all outstanding Common
Stock at a price and on terms determined, prior to the purchase of shares under
such tender or exchange offer, by at least a majority of the members of the
Board of Directors who are not Acquiring Persons, Affiliates or Associates
of an
Acquiring Person or, nominees or representatives of any of them, to be adequate
(taking into account all factors that such Directors deem relevant including,
without limitation, prices that could reasonably be achieved if the Corporation
or its assets were sold on an orderly basis designed to realize maximum value)
and otherwise in the best interests of the Company and its stockholders (other
than the Person or any Affiliate or Associate thereof on whose basis the offer
is being made) taking into account all factors that such directors may deem
relevant.
(k) “Person”
means any individual, partnership, firm, corporation, company, association,
trust, unincorporated organization, syndicate or group (the existence of a
“group” being determined in accordance with Rule 13d-5 under the Exchange Act,
as the Rule is in effect on the date of this Agreement including, but not
limited to, a Person having any agreement, arrangement or understanding [whether
formal or informal and whether or not in writing] with any other Person to
act
together to acquire, offer to acquire, hold, vote or dispose of any Common
Shares of the Company).
(l) “Purchase
Price” shall mean the price of a share of Common Stock pursuant to the exercise
of a Right under the terms of this Agreement.
(m) “Redemption
Date” shall mean the date on which the Rights are redeemed pursuant to Section
13 hereof.
(n) “Stock
Acquisition Date” shall mean the first date of public announcement by the
Company or any Acquiring Person that an Acquiring Person has become
such.
5
(o) “Subsidiary”
of any Person shall mean any corporation or other entity of which a majority
of
the voting power of the voting equity securities or equity interests is owned,
directly or indirectly, by such Person.
(p) “Trading
Day” shall mean a day on which the principal national securities exchange on
which the Common Stock is listed or admitted to trading is open for the
transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day.
Section
2. Rights
Agent.
(a) The
Company hereby appoints the Rights Agent to act as agent for the Company and
the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior
to
the Distribution Date also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as
it may deem necessary or desirable. Contemporaneously with such appointment,
if
any, the Company shall notify the Rights Agent thereof.
(b) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder in accordance with a fee schedule to be
mutually agreed upon and, from time to time, on demand of the Rights Agent,
its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder.
(c) The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, and the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound by all such
terms and conditions:
(i) The
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection of the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(ii) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Executive
Vice President, any Senior Vice President, the Treasurer, or the Secretary
of
the Company and delivered to the Rights Agent, and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(iii) The
Rights Agent shall be liable hereunder only for its own negligence, bad faith
or
willful misconduct. The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in
connection with its administration of this Agreement in reliance upon any Right
Certificate, certificate for shares of Common Stock or for other securities
of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, instruction, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified, acknowledged or
attested by the proper person or persons, or otherwise upon the advice of
counsel as set forth in this Section.
6
The
Company agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence, bad
faith
or willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any
claim of liability in the premises.
(iv) The
Rights Agent shall not be liable for, or by reason of, any of the statements
of
fact or recitals contained in this Agreement or in the Right Certificates
(except as to its countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to have been made
by the Company only.
(v) The
Rights Agent shall not be under any responsibility in respect of the validity
of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible
for
any change in the exercisability of the Rights or any adjustment in the terms
of
the Rights (including the manner, method or amount thereof) provided for in
Sections 3, 10, 11, 12 or 13, or the ascertaining of the existence of facts
that
would require any such adjustment or determination (except with respect to
the
exercise of Rights evidenced by Right Certificates after actual notice that
such
adjustment or determination is required); nor shall it by any act hereunder
be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Common Stock
will, when so issued, be validly authorized and issued, fully paid and
non-assessable.
(vi) The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
(vii) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the Chairman of the
Board, the President, any Executive Vice President, any Senior Vice President,
the Treasurer, or the Secretary of the Company, and to apply to such officers
for advice or instructions in connection with its duties under this Rights
Agreement, 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
or
for any delay while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at the option of
the
Rights Agent, set forth in writing any action proposed to be taken or omitted
by
the Rights Agent with respect to its duties or obligations under this Rights
Agreement and the date on or after which such action shall be taken or omitted
and the Rights Agent shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on or after the
date
specified therein (which date shall not be less than three business days after
the date any such officer actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking or omitting any such action, the Rights Agent has received written
instructions in response to such application specifying the action to be taken
or omitted.
7
(viii) 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 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.
(ix) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for
any
act, default, neglect or misconduct of any such attorneys or agents or for
any
loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(x) At
any
time and from time to time after the Distribution Date, upon the request of
the
Company, the Rights Agent shall promptly deliver to the Company a list, as
of
the most recent practicable date (or as of such earlier date as may be specified
by the Company), of the holders of record of Rights.
(d) The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Stock by registered or
certified mail and to the holders of the Right Certificates by first-class
mail.
The Company may remove the Rights Agent or any successor Rights Agent upon
30
days’ notice in writing mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Stock by registered
or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, it shall remit to the Company, or to any successor Rights
Agent designated by the Company, all books, records, funds, certificates or
other documents or instruments of any kind then in its possession that it
acquired in connection with its services as Rights Agent hereunder, and shall
thereafter be discharged from all duties and obligations hereunder. Following
notice of such removal, resignation or incapacity, the Company shall appoint
a
successor to such 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 a holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by
the
Company), then the registered holder of any Right Certificate may apply to
any
court of competent jurisdiction for the appointment of a new Rights Agent.
Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of any state of the United States, in good standing, that either
has a
combined capital and surplus of at least $50 million or is otherwise financially
sufficient, in the judgement of the Board, to enable it to serve as Rights
Agent, that has an office in the State of New York or an affiliate with an
office in the State of New York and that is subject to supervision or
examination by Federal or state authority. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities without further act or deed as if it had been originally named
as Rights Agent; but the predecessor Rights Agent shall deliver and transfer
to
the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary
for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any
notice provided for in this paragraph, 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.
8
(e) Any
corporation with which the Rights Agent or any successor Rights Agent is merged
or consolidated, or any corporation resulting from any such merger or
consolidation, or any corporation succeeding to the corporate trust business
of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that
such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of paragraph (d) of this Section. If any of the Right
Certificates shall have been countersigned but not delivered at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
such successor Rights Agent may adopt the countersignature of the predecessor
Right Agent and deliver such Right Certificates so countersigned; if at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in its own name; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(f) If
the
name of the Rights Agent is changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section
3. Issue
of
Right Certificates.
(a) Until
the
Distribution Date, the Rights shall be evidenced (subject to the provisions
of
paragraph (b) of this Section) by the certificates for shares of Common Stock
registered in the names of the holders thereof (which Certificates for Common
Shares shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and the right to receive Right Certificates will be transferable
only in connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will send or cause to be sent (and the Rights Agent will, if requested,
send), by first-class, insured, postage-prepaid mail, to each record holder
of
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit A hereto, evidencing one Right for each
share of Common Stock so held. As of the Distribution Date, the Rights will
be
evidenced solely by such Right Certificates.
9
(b) The
Company will send or cause to be sent a copy of a Summary of Rights to Purchase
Common Stock, in substantially the form attached hereto as Exhibit B (the
“Summary of Rights”), by first-class, postage-prepaid mail, to each holder of a
share of Common Stock that shall become outstanding between May 4, 1987 and
the
earliest of the Distribution Date, the Redemption Date and the Expiration Date.
Until the Distribution Date, the Rights shall be evidenced by certificates
for
Common Stock registered in the names of the holders thereof (together with
a
copy of the Summary of Rights), registered holders of Common Stock shall also
be
the registered holders of the associated Rights, and the surrender for transfer
of any certificate for Common Stock, with or without a copy of the Summary
of
Rights attached thereto, shall also constitute the transfer of the associated
Rights. Certificates issued for Common Stock (including, without limitation,
certificates issued upon transfer or exchange of Common Stock) prior to the
earliest of the Distribution Date, the Redemption Date or the Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them
the
following legend:
This
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in a Rights Agreement between ▇▇▇▇▇▇▇ Fabrics, Inc. and Continental
Stock Transfer & Trust Company, dated as of March 23, 1987, as from time to
time amended, (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
executive offices of ▇▇▇▇▇▇▇ Fabrics, Inc. 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. ▇▇▇▇▇▇▇
Fabrics, Inc. will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor. Under
certain circumstances, Rights issued to Acquiring Persons or Associates or
Affiliates thereof (as defined in the Rights Agreement) may become null and
void.
(c) In
the
event that the Company purchases or acquires any shares of Common Stock prior
to
the Distribution Date, any Rights associated with such shares of Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with shares of Common Stock that are no longer
outstanding.
Section
4. Form
of
Right Certificates.
(a) The
Right
Certificates (and the form of election to purchase shares, certification and
assignment to be printed on the reverse thereof) shall be substantially in
the
form of Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the
Company may deem appropriate and as are not inconsistent with the provisions
of
this Agreement, or as may be required to comply with any applicable law or
with
any rule or regulation made pursuant thereto or with any rule or regulation
of
any stock exchange on which the Rights may from time to time be listed, or
to
conform to usage. The Right Certificates shall be in machine printable form
and
in a format reasonably satisfactory to the Rights Agent. Subject to the
provisions of paragraph (b) of this Section, the Right Certificates, whenever
issued, shall be dated as of March 23, 1987, and shall show the date of
countersignature by the Rights Agent, and on their face shall entitle the
holders thereof to purchase such number of shares of Common Stock as shall
be
set forth therein at the Purchase Price set forth therein, but the number and
kind of such shares and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights
in
such form as may be approved by the Board to reflect any adjustment or change
in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with
the
provisions of this Agreement.
10
Section
5. Countersignature
and Registration.
The
Right
Certificates shall be executed on behalf of the Company by the Chairman of
the
Board, President or any Vice President and by its Secretary or an Assistant
Secretary, either manually or by facsimile signature, and shall have affixed
thereto the Company’s seal or a facsimile thereof. The Right Certificates shall
be manually countersigned by an authorized signatory of the Rights Agent, but
it
shall not be necessary for the same signatory to countersign all of the Right
Certificates hereunder. No Right Certificate shall be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by
the Company, such Right Certificates, may nevertheless be countersigned by
the
Rights Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not ceased
to
be such officer of the Company.
Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office in the Borough of Manhattan in the City of New York, books
for
registration and transfer of the Right Certificates issued hereunder. Such
books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section
6. Transfer,
Split-Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates; Cancellation and Destruction of Right
Certificates.
(a) Subject
to the provisions of Section 7(f) and (g) hereof, at any time after the close
of
business on the Distribution Date, and at or prior to the close of business
on
the earlier of the Redemption Date or the Expiration Date, any Right Certificate
or Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of shares of Common Stock as the Right Certificate
or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender such Right Certificate or Right Certificates at the
principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate
or
Right Certificates, as the case may be, as so requested. The Company may require
payment from the holders of Right Certificates 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 such Right Certificates.
Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company’s request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and
upon surrender to the Rights Agent and cancellation of the Right Certificate
if
mutilated, the Company shall execute and deliver a new Right Certificate of
like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
11
All
Right
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of the Rights Agreement. The Company shall deliver to
the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case
shall
deliver a certificate of destruction thereof to the Company.
Section
7. Exercise
of Rights; Purchase Price; Expiration Date of Rights; Fractional Rights and
Fractional Shares of Stock.
(a) The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and certification on the reverse side thereof
duly
executed, to the Rights Agent at the principal office of the Rights Agent in
the
Borough of Manhattan in the City of New York, together with payment of the
Purchase Price for each share of Common Stock as to which the Rights are
exercised, at or prior to the earlier of (i) the close of business on the
Expiration Date or (ii) the Redemption Date.
(b) The
Purchase Price for each share of Common Stock purchased pursuant to the exercise
of a Right shall be $24, shall be subject to adjustment from time to time as
hereinafter provided and shall be payable in lawful money of the United States
of America in accordance with paragraph (c) of this Section.
(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of
election to purchase and certification duly executed, accompanied by payment
of
the Purchase Price for the shares of Common Stock to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 8 hereof, in cash, or by certified
check or cashier’s check payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) requisition from any transfer agent of the Common
Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the number of shares of Common Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such
requests, (ii) when appropriate, requisition from the Company the amount of
cash
to be paid in lieu of issuance of fractional shares of Common Stock in
accordance with paragraph (g) of this Section, (iii) promptly after receipt
of
such certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as
may be designated by such holder, and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of
such
Right Certificate.
(d) In
case
the registered holder of any Right Certificate shall exercise less than all
the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent to
the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of paragraph (f) of this Section.
12
(e) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in this
Section unless the certification contained in the appropriate form of election
to purchase set forth on the reverse side of the Right Certificate surrendered
for such exercise shall have been completed and signed by the registered holder
thereof and the Company shall have been provided with such additional evidence
of the identity of the beneficial owner (or former beneficial owner) or
Affiliates or Associates thereof as the Company shall reasonably
request.
(f) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates that evidence fractional Rights. In lieu of fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this paragraph, the current market
value of a whole Right shall be the closing price (as defined in Section 1(f))
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. If the Rights are not
publicly held or not so listed or traded, the “current market value of a whole
Right” shall mean the fair value of a Right on such date as determined in good
faith by the Board.
(g) The
Company shall not be required to issue fractions of shares of Common Stock
upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Right Certificates at the time
such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Common Stock. For purposes
of this paragraph, the current market value of the Common Stock shall be the
closing price (as defined in Section 1(f)) of a share of Common Stock for the
Trading Day immediately prior to the date of such exercise.
Section
8. Reservation
and Availability of Shares of Common Stock.
The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Common Stock, or any authorized
and
issued Common Stock held in its treasury, the number of shares of Common Stock
that will be sufficient to permit the exercise in full of all outstanding
Rights. In the event that there shall not be sufficient treasury stock or
authorized but unissued Common Stock to permit the exercise in full of the
Rights in accordance with the provisions of this Agreement, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights.
So
long
as the Common Stock issuable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares of Common
Stock reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Common Stock delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such stock (subject
to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and non-assessable stock.
13
The
Company further covenants and agrees that it will pay when due and payable
any
and all Federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any Common
Stock upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates for Common Stock in a name other than that of, the
registered holder of the Right Certificate evidencing the Rights surrendered
for
exercise or to issue or deliver any certificates for Common Stock upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s satisfaction that so such tax
is due.
Section
9. Right
Holders.
(a) Every
holder of a Right by accepting the same consents and agrees with the Company
and
the Rights Agent and with every other holder of a Right that:
(i) prior
to
the Distribution Date, the Rights shall be transferable only in connection
with
the transfer of Common Stock;
(ii) after
the
Distribution Date, the Right Certificates shall be transferable only on the
registry books of the Rights Agent if surrendered at the principal office of
the
Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(iii) the
Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the
Right Certificates or the associated Common Stock certificate made my anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice to
the
contrary; and
(iv) he
has
waived his right to receive any fractional Rights or any fractional shares
of
stock upon exercise of a Right.
(b) No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a 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 receive notice of meetings or other
actions affecting stockholders (except as provided in Section 14 hereof), or
to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
(c) Each
person in whose name any certificate for Common Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of
record of the Common Stock represented thereby on, and such certificate shall
be
dated, the date upon which the Right Certificate evidencing such Rights was
duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Company
are
closed, such person shall be deemed to have become the record holder of such
stock on, and such certificate shall be dated, the next succeeding Business
Day
on which the Common Stock transfer books of the Company are open.
14
(d) All
rights of action in respect of this Agreement, except the rights of action
given
to the Rights Agent under Section 2 (b) and (c) hereof, are vested in each
registered holder of a Right Certificate (and, prior to the Distribution Date,
each registered holder of Common Stock); and any such holder, without the
consent of the Rights Agent or of the holder of any other Right Certificate
(or,
prior to the Distribution Date, of the Common Stock), may, in his own behalf
and
for his own benefit, enforce, and may institute and maintain any suit, action
or
proceeding against the Company to enforce, this Agreement, or otherwise enforce
or act in respect of his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations
of
any Person subject to this Agreement.
Section
10. Adjustment
of Number of Shares; Exchange Option.
(a) Subject
to the provisions of paragraph (b) of this Section, in the event any Person
shall become an Acquiring Person, proper provision shall be made so that each
holder of a Right, except as provided below, shall thereafter have a right
to
receive, upon exercise thereof in accordance with the terms of this Agreement,
such number of shares of Common Stock as shall equal the result obtained by
(x)
multiplying the then-current Purchase Price by the number of shares of Common
Stock for which a Right is then exercisable and (y) dividing that product by
50%
of the current per share market price of the Common Stock (determined pursuant
to Section 12(d)), on the date such Person became an Acquiring Person. In the
event that any Person shall become an Acquiring Person and the Rights shall
then
be outstanding, the Company shall not take any action that would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(b) The
Board
of Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of paragraph (c) of this Section) for Common Stock
at
an exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time that a majority of the
members of the Board of Directors shall be Acquiring Persons, Affiliates or
Associates of an Acquiring Person, or nominees or representatives of any of
them. Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to this paragraph (b) 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 shares of Common 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 of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights that will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
that
have become void pursuant to the provisions of paragraph (c) of this Section)
held by each holder of Rights. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued
to
permit any exchange of Rights as contemplated in accordance with this paragraph
(b), the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the
Rights.
15
(c) Anything
in this Agreement to the contrary notwithstanding, from and after the time
any
Person becomes an Acquiring Person, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii)
a
transferee of an Acquiring Person (or of any Affiliate or Associate thereof)
who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any Affiliate or Associate thereof)
who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or
not
for consideration) from the Acquiring Person to holders of equity interests
in
such Acquiring Person or to any Person with whom the Acquiring Person has a
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has a primary
purpose or effect the avoidance of this paragraph (c), shall become null and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision
of
this Agreement or otherwise. No Right Certificate shall be issued pursuant
to
the provisions of this Agreement that represents any Rights beneficially owned
by any Person whose Rights are void pursuant to the provisions of this paragraph
(c). The Company shall use all reasonable effortsto ensure that the provisions
of this paragraph (c) are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to
make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
Section
11. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
At
any
time after a Person shall have become an Acquiring Person, in the event that,
directly or indirectly, (a) the Company shall consolidate with, or merge with
and into, any Person, (b) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all
or
part of the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (c) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning
power
of the Company and its Subsidiaries (taken as a whole) to any other Person,
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms
of
this Agreement, such number of shares of common stock of such other Person
(including the Company as successor thereto or as the surviving corporation)
as
shall be equal to the result obtained by (x) multiplying the then-current
Purchase Price by the number of shares of Common Stock for which a Right is
then
exercisable (without taking into account any adjustment previously made pursuant
to Section 10) and (y) dividing that product by 50% of the current per share
market price of the shares of common stock of such other Person (determined
pursuant to Section 12(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Person shall thereafter
be
liable for, and shall assume, by virtue of such consolidation, merger, sale
or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such
Person; and (iv) such Person shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its common stock in
accordance with Section 8 hereof) in connection with such consummation as may
be
necessary to ensure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its common stock thereafter
deliverable upon the exercise of the Rights. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior thereto the
Company and such Person shall have executed and delivered to the Rights Agent
a
supplemental agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The provisions
of
this Section shall similarly apply to successive mergers or consolidations
or
sales or other transfers.
16
Section
12. Adjustments
of Purchase Price, Number of Shares or Number of Rights.
(a) In
the
event the Company shall at any time after the date of this Agreement (A) declare
a dividend on the Common Stock payable in shares of Common Stock, (B) subdivide
the outstanding shares of Common Stock, (c) combine the outstanding shares
of
Common Stock into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Common 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 Section 10 hereof, the Purchase Price in effect at the time of
the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, 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 and in compliance with other
applicable conditions, the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and
at a
time when the Common Stock transfer books of the Company were open, he would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
that
would require an adjustment under both this paragraph and Section 10 hereof,
the
adjustment provided for in this paragraph shall be in addition to, and shall
be
made prior to, any adjustment required pursuant to Section 10
hereof.
(b) In
case
the Company shall fix a record date for the issuance of rights or warrants
to
all holders of Common Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Common Stock
(or securities convertible into Common Stock) at a price per share of Common
Stock (or having a conversion price per share of Common Stock, if a security
convertible into Common Stock) less than the current per share market price
of
the Common Stock (as defined in paragraph (d) of this Section) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding on such record date plus the number of shares of
Common Stock that the aggregate offering price of the total number of shares
of
Common 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
Common Stock outstanding on such record date plus the number of additional
shares of Common 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 in a consideration part or all of which
is
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall be described
in
a statement filed with the Rights Agent. Common Stock owned by or held for
the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustments 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.
17
(c) In
case
the Company shall fix a record date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection
with
a consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or a dividend payable in shares
of Common Stock) or subscription rights or warrants (excluding those referred
to
in paragraph (b) of this Section), 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 per share market price of the Common Stock (as defined
in
paragraph (d) of this Section) on such record date, less the fair market value
(as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Common Stock and the denominator
of which shall be such current per share market price of the Common 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
again be adjusted to be the Purchase Price which would then be in effect if
such
record date had not been fixed.
(d) For
the
purpose of any computation hereunder, the “current per share market price” of
the Common Stock on any date shall be deemed to be the average of the daily
closing prices (as defined in Section 1(f) hereof) per share of such Common
Stock for the 30 consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per share market price
of
the Common Stock is determined during a period following the announcement by
the
issuer of such Common Stock of (i) a dividend or distribution on such Common
Stock payable in such Common Stock or securities convertible into such Common
Stock or (ii) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of 30 Trading Days after the ex-dividend
date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the “current
market price” shall be appropriately adjusted to reflect the current market
price per share of Common Stock equivalent. If the Common Stock is not publicly
held or not so listed or traded, the “current per share market price” shall mean
the fair value per share of Common Stock as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent.
(e) An
adjustment in the Purchase Price requiring an increase or decrease of less
than
1% in such price shall not be required immediately following a transaction,
but
any such adjustment shall be carried forward and made not later than the earlier
of the Expiration Date and three years after the date of the transaction or
shall be taken into account in any subsequent adjustment if prior to the earlier
of such dates. All calculations under this Section and under Section 10 shall
be
made to the nearest cent or to the nearest ten-thousandth of a share as the
case
may be.
18
(f) If
as a
result of an adjustment made pursuant to paragraph (a) of this Section or
Section 10(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than shares
of Common Stock, thereafter the number of such other shares of stock so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in paragraphs (a) through
(c), inclusive, of this Section, and the provisions of Sections 7, 8, 9(c)
and
11 hereof with respect to the Common Stock shall apply on like terms to any
such
other shares of stock.
(g) All
Rights issued by the Company subsequent to any adjustment to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Purchase Price,
the number of shares of Common Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless
the Company shall have exercised its election as provided in paragraph (i)
of
this Section, upon each adjustment of the Purchase Price as a result of the
calculations made in paragraphs (b) and (c) of this Section, 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
shares of stock (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares of stock covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment
of
the Purchase Price.
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in substitution for any adjustment in the number
of shares of Common Stock issuable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of shares of Common 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 ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may
be the date on which the Purchase Price is adjusted or any day thereafter,
but,
if the Right Certificates have been issued, shall be at least 10 days later
than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this paragraph, the
Company shall, as promptly as practicable, cause to be distributed to holders
of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 7(f) hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be
issued, executed and countersigned in the manner provided for herein and shall
be registered in the names of the holders of record of Right Certificates on
the
record date specified in the public announcement.
19
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of shares of
Common Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per
share of stock and the number of shares of stock that were expressed in the
initial Right Certificates issued hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then par value, if any, of the Common Stock issuable upon exercise
of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and
legally issue fully paid and nonassessable shares of Common Stock at such
adjusted Purchase Price.
(l) In
any
case in which this Section or Section 10 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 issuing to
the
holder of any Right exercised after such record date the Common Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Common Stock and 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 upon the occurrence of the
event requiring such adjustment.
(m) Anything
in this Section or Section 10 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 or Section 10, as and to the
extent that it in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the shares of the Common Stock,
issuance wholly for cash of any shares of Common Stock at less than the current
market price, issuance wholly for cash of Common Stock or securities which
by
their terms are convertible into or exchangeable for Common Stock, stock
dividends or issuance of rights, options or warrants referred to hereinabove
in
this Section, hereafter made by the Company to holders of its Common Stock
shall
not be taxable to such stockholders.
(n) Whenever
an adjustment is made as provided in Sections 10, 11 or 12 hereof, 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 Common Stock a copy
of such certificate, and (c) mail a brief summary thereof to each holder of
a
Right Certificate in accordance with Section 15 hereof. 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.
20
Section
13. Redemption.
(a) The
Board
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all 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 amount being hereinafter referred to
as
the “Redemption Price”).
(b) Immediately
upon the action of the Board ordering the redemption of the Rights, and without
any further action and without any notice, the right to exercise the Rights
shall terminate and the only right of the holders of Rights shall be to receive
the Redemption Price. Within 10 days after the action of the Board ordering
the
redemption of the Rights, the Company shall give notice of such redemption
to
the holders of the then outstanding Rights by mailing such notice to each such
holder at its 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 the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption shall state the method by which the payment
of
the Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section or in
connection with the purchase of Common Stock prior to the Distribution
Date.
Section
14. Notice
of
Certain Events.
In
case
the Company shall propose, at any time after the Distribution Date, (a) to
pay
any dividend payable in stock of any class to the holders of Common Stock or
to
make any other distribution to the holders of Common Stock (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid), (b) to offer to the holders
of
Common Stock rights or warrants to subscribe for or to purchase any additional
Common Stock or shares of stock of any class or any other securities, rights
or
options, (c) to effect any reclassification of its Common Stock (other than
a
reclassification involving only the subdivision of outstanding shares of Common
Stock), (d) to effect any consolidation or merger into or with, or to effect
any
sale or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one or more transactions, of more than 50%
of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation, dissolution
or
winding up of the Company, then, in each such case, the Company shall give
to
the Rights Agent and to each holder of a Right Certificate, in accordance with
Section 15 hereof, 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 Common 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 (a) or (b) above at least 10 days prior to the record date
for
determining holders of the Common Stock for purposes of such action, and in
the
case of any such other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders
of
the Common Stock whichever shall be the earlier.
21
In
case
any of the events set forth in Section 10(a) or (b) of this Agreement shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 15 hereof, 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 10(a) or (b) hereof.
Section
15. Notices.
Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as
follows:
▇▇▇▇▇▇▇
Fabrics, Inc.
▇.▇.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Secretary
Subject
to the provisions of Section 2(d) hereof, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is
filed in writing with the Company) as follows:
Continental
Stock Transfer & Trust Company
▇
▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Investor Services Department
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section
16. Supplements
and Amendments.
The
Company and the Rights Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Right Certificates, so long
as
the interests of the holders of the Right Certificates are not adversely
affected thereby, in order to cure any ambiguity, to correct or supplement
any
provision contained herein that the Board may, upon the advice of counsel,
from
time to time determine to be defective or inconsistent with any other provisions
herein or with applicable law, or to make any other provisions in regard to
matters or questions arising hereunder, which the Company and the Rights Agent
may deem necessary or desirable, including but not limited to extending the
Expiration Date and, provided that at the time of such amendment there is no
Acquiring Person, the period of time during which or the conditions under which
the Rights may be redeemed.
Section
17. Determinations
and Actions by the Board of Directors.
(a) The
Board
shall have the exclusive power and authority to exercise all rights and powers
specifically granted to the Board or to the Company, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable to
carry out the intent of this Agreement (including a determination to redeem
or
not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations done or made by the Board
in
good faith shall be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights, and all other parties and shall not subject
the Board to any liability to the holders of the Rights.
22
(b) It
is
understood that the TIDE Committee (as described below) of the Board of
Directors shall review and evaluate this Agreement in order to consider whether
the maintenance of this Agreement continues to be in the best interests of
the
Company, its stockholders and other relevant constituencies of the Company
at
least once every three years, or sooner than that if any Person shall have
made
a proposal to the Company or its stockholders, or taken any other action that,
if effective, could cause such Person to become an Acquiring Person hereunder,
if a majority of the members of the TIDE Committee shall deem such review and
evaluation appropriate after giving due regard to all relevant circumstances.
Following each such review, the TIDE Committee shall communicate its conclusions
to the full Board of Directors, including any recommendation in light thereof
as
to whether this Agreement should be modified or the Rights should be redeemed.
If the Company has a non-executive chairman, the TIDE Committee shall be chaired
by the non-executive chairman and comprised of all members of the Board of
Directors who are not officers, employees or Affiliates of the Company. If
the
Company does not have a non-executive chairman, the TIDE Committee shall be
comprised of the members of the Corporate Governance and Nominating Committee
of
the Board of Directors (or any successor committee) who are not officers,
employees or Affiliates of the Company .
(c) The
TIDE
Committee and the Board of Directors, when considering whether this Agreement
should be modified or the Rights should be redeemed, shall have the power to
set
their own agenda and to retain at the expense of the Company their choice of
legal counsel, investment bankers and other advisors. The TIDE Committee and
the
Board of Directors, when considering whether this Agreement should be modified
or the Rights should be redeemed, shall have the authority to review all
information of the Company and to consider any and all factors they deem
relevant to an evaluation of whether this Agreement should be modified or the
Rights should be redeemed.
Section
18. 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
19. Benefits
of this Agreement.
Nothing
in this Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
Section
20. Severability.
If
any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
23
Section
21. Governing
Law.
This
Agreement and each Right Certificate issued hereunder shall be deemed to be
a
contract made under the laws of the State of Delaware and for all purposes
shall
be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
Section
22. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section
23. Descriptive
Headings.
Descriptive
headings of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the
provisions hereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed, all as
of
the day and year first above written.
▇▇▇▇▇▇▇
FABRICS, INC.
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇
Chief
Executive Officer
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
By:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
Chairman,
President, Secretary
24
EXHIBIT
A
[Form
of
Right Certificate]
Certificate
No. R- ______________Rights
NOT
EXERCISABLE AFTER MARCH 4, 2011 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right
Certificate
▇▇▇▇▇▇▇
FABRICS, INC.
This
certifies that _________________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of March 23, 1987 between ▇▇▇▇▇▇▇ Fabrics, Inc., a Delaware
corporation (the “Company”), and Continental Stock Transfer & Trust Company,
as Rights Agent (the “Rights Agent”), and as amended and restated most recently
on March 4, 2001 (the “Rights Agreement”), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m. (Central Time) on March 4, 2011, at the
principal office of the Rights Agent, or its successors as Rights Agent, in
the
Borough of Manhattan in the City of New York, one fully paid, non-assessable
share of common stock of the Company (the “Common Stock”), at a purchase price
of $24 per share (the “Purchase Price”), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and certification duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of shares of Common Stock that may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of March 4, 2001, based on the Common Stock as constituted
at
such date.
As
provided in the Rights Agreement, the Purchase Price and the number of shares
of
Common Stock which may be purchased upon the exercise of the Rights evidenced
by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies
of
the Rights Agreement are on file at the principal offices of the Company and
the
Rights Agent.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the principal office of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of Common
Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
25
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $.01 per Right.
No
fractional shares of Common Stock shall be issued upon the exercise of any
Right
or Rights evidenced hereby, but in lieu thereof of a cash payment will be made,
as provided in the Rights Agreement.
No
holder
of this Right Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Common Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon to the holder hereof, 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
receive notice of meetings or other actions affecting stockholders (except
as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
The
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement without the approval of any holders of Right Certificates,
so
long as the interests of the holders of Right Certificates are not adversely
affected thereby, in order to cure any ambiguity, to correct or supplement
any
provision contained therein that the Board may from time to time determine
to be
defective or inconsistent with any other provisions therein or with applicable
law, or to make any other provisions in regard to matters or questions arising
thereunder that the Company and the Rights Agent may deem necessary or
desirable, including but not limited to extending the Expiration Date (as such
term is defined in the Rights Agreement) and, providing that at the time of
such
amendment there is no Acquiring Person (as such term is defined in the Rights
Agreement), extending the period during which or the conditions under which
the
Rights may be redeemed.
If
any
term, provision, covenant or restriction of the Rights Agreement is held by
a
court of competent jurisdiction or other authority to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of the Rights Agreement shall remain in full force and effect
and
shall in no way be affected, impaired or invalidated.
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of ________________.
▇▇▇▇▇▇▇
FABRICS, INC.
By_______________________________
Title
By_______________________________
Title
Countersigned:
26
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
By_____________________________ Date:
_____________________________
Authorized
Signature
27
[Form
of
Reverse Side of Right Certificate]
FORM
OF
ASSIGNMENT
(To
be
executed by the registered holder if such holder desires to transfer the Right
Certificates.)
FOR
VALUE
RECEIVED _______________________________________ hereby sells, assigns and
transfers unto______________________________________________________
________________________________________________________________________________
(Please
print name and address of transferee)
this
Right Certificate and the Rights evidenced thereby, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
____________________________ Attorney, to transfer the within Right Certificate
on the books of the within-named Company, with full power of
substitution.
Dated:
_____________________________
28