Exhibit 99.1
FORM OF
RIGHTS AGREEMENT
BETWEEN
SONIC CORP.
and
[_______________________________]
as Rights Agent
Dated as of June 16, 1997
TABLE OF CONTENTS
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Section Page
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1. Certain Definitions.................................................. 2
2. Appointment of Rights Agent.......................................... 2
3. Issuance of Rights Certificates...................................... 12
4. Form of Rights Certificates.......................................... 15
5. Countersignature and Registration.................................... 16
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates............. 17
7. Exercise of Rights; Exercise Price; Expiration Date of Rights........ 19
8. Cancellation and Destruction of Rights Certificates.................. 24
9. Reservation and Availability of Shares of Preferred Stock............ 24
10. Preferred Stock Record Date.......................................... 28
11. Adjustment of Exercise Price, Number and Kind of Shares or
Number of Rights..................................................... 29
12. Certification of Adjusted Exercise Price or Number of Shares......... 46
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power........................................................ 46
14. Fractional Rights and Fractional Shares.............................. 54
15. Rights of Action..................................................... 55
16. Agreement of Right Holders........................................... 56
17. Rights Certificate Holder Not Deemed a Stockholder................... 57
18. Concerning the Rights Agent.......................................... 58
19. Merger or Consolidation of, or Change in Name of,
the Rights Agent..................................................... 59
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Section Page
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20. Duties of Rights Agent............................................... 61
21. Change of Rights Agent............................................... 64
24. Exchange............................................................. 69
25. Notice of Proposed Actions........................................... 73
26. Notices.............................................................. 74
27. Supplements and Amendments........................................... 75
28. Successors........................................................... 76
29. Benefits of this Rights Agreement. .................................. 77
30. Determinations and Actions by the Board; etc. ....................... 77
31. Delaware Contract.................................................... 78
32. Counterparts......................................................... 78
33. Descriptive Headings................................................. 79
34. Severability......................................................... 79
Exhibit A -- Form of Certificate of Designations of Series A Junior
Preferred Stock
Exhibit B -- Summary of Rights
Exhibit C -- Form of Rights Certificate
ii
RIGHTS AGREEMENT
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Agreement, dated as of June 16, 1997, by and between SONIC CORP., a
Delaware corporation (the "Company"), and
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(the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on June 16, 1997, the Board of Directors of the Company
authorized the issuance, and declared a dividend, of one right (a "Right")
for each share of Common Stock, $.01 par value per share, of the Company
outstanding as of the close of business on June 27, 1997 (the "Record Date"),
each such Right representing the right to purchase one one-thousandth of a
share of Series A Junior Preferred Stock of the Company ("Preferred Stock")
having the rights and preferences set forth in the form of Certificate of
Designations attached hereto as Exhibit A authorized by the Board of
Directors on June 16, 1997, upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, the Board of Directors of the Company further authorized
the issuance of one Right (subject to adjustment) with respect to each share
of Common Stock which may be issued between the Record Date and the earlier
to occur of the Redemption Date or the Final Expiration Date (as such terms
are hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the shares of any class of Voting Stock (as such term
is hereinafter defined) of the Company then outstanding; provided
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that, an Acquiring Person shall not include (i) an Exempt Person (as
such term is hereinafter defined) or (ii) any Person, together with
all Affiliates and Associates of such Person, who or which would be an
Acquiring Person solely by reason of (x) being the Beneficial Owner of
shares of Voting Stock of the Company, the Beneficial Ownership of
which was acquired by such Person pursuant to any action or
transaction or series of related actions or transactions approved by
the Board of Directors before such Person otherwise became an
Acquiring Person or (y) a reduction in the number of issued
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and outstanding shares of Voting Stock of the Company pursuant to a
transaction or a series of related transactions approved by the Board
of Directors of the Company (upon approval, in the case of subclauses
(x) and (y), by a majority of the Continuing Directors (as such term
is hereinafter defined)); provided, further, in the event such Person
described in this clause (ii) does not become an Acquiring Person by
reason of subclause (x) or (y) of this clause (ii) or such Person set
forth in this clause (ii) nonetheless shall become an Acquiring Person
in the event such Person thereafter acquires Beneficial Ownership of
any additional shares of the Voting Stock of the Company, unless the
acquisition of such additional Voting Stock would not result in such
Person becoming an Acquiring Person by reason of subclause (x) or (y)
of this clause (ii). Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith (upon approval by a
majority of the Continuing Directors) 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
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no longer be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not
be deemed an "Acquiring Person" for any purposes of this Rights
Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended
("Exchange Act"), as in effect on the date of this Rights Agreement.
(c) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities (and correlative terms shall have
correlative meanings);
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, "beneficially owns" (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act); or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding, or upon
the exercise
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of conversion rights, exchange rights, other rights
(other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own", securities
tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange
or (B) the right to vote, alone or in concert with others,
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, or to "Beneficially Own", any
securities if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy or consent
given in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not at the time
reportable by such Person on a Schedule 13D report under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's
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Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except as described in clause (B) of
subparagraph (ii) of this paragraph (c)) or disposing of any
securities of the Company.
Notwithstanding anything in this paragraph (c) to the
contrary, if a Person, who together with any other stockholders
of the Company holds, in the aggregate, greater than 50% of the
Voting Stock of the Company, approves any action of the
stockholders by written consent in lieu of a stockholders
meeting, such Person shall be deemed to be the "Beneficial Owner"
of all of the Voting Stock that is voted pursuant to such written
consent. Further, notwithstanding anything in this paragraph
(c) to the contrary, a Person engaged in the business of
underwriting securities shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own," any securities acquired in
good faith in a firm commitment underwriting until the expiration
of forty days after the date of such acquisition.
Notwithstanding anything in this paragraph (c) to the
contrary, the phrase "then outstanding," when used with reference
to a Person's Beneficial Ownership of securities of the
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Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed
to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the Common Stock (presently $.01 par value) of the Company. "Common
Stock" when used with reference to any Person other than the Company which
shall be organized in corporate form shall mean the capital stock or other
equity security with the greatest per share voting power of such Person or,
if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person. "Common
Stock" when used with reference to any Person other than the Company which
shall not be organized in corporate form shall mean units of beneficial
interest which shall represent
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the right to participate in profits, losses, deductions and credits of
such Person and which shall be entitled to exercise the greatest voting
power per unit of such Person or, if such other Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Continuing Director" shall mean any member of the Board of
Directors, while such person is a member of the Board of Directors, who is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of any
such Affiliate or Associate, and who either (i) was a member of the Board
of Directors on the date of this Agreement or (ii) subsequently became a
member of the Board of Directors, and whose nomination for election or
election to the Board of Directors was recommended or approved by a
majority of the Continuing Directors then on the Board of Directors.
(h) "Distribution Date" shall have the meaning set forth in Section
3(b) hereof.
(i) "Exchange Act" shall have the meaning set forth in Section 1(b)
hereof.
(j) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary
of the Company or (iii) any employee benefit plan or employee stock plan of
the Company or any Subsidiary of the Company, or any trust
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or other entity organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan.
(k) "Exercise Price" shall have the meaning set forth in Section 4
and 7(b) hereof.
(l) "Fair Market Value" of any property shall mean the fair market
value of such property as determined in accordance with Section 11(d)
hereof.
(m) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Person" shall mean any individual, firm, corporation or other
entity and shall include any successor (by merger or otherwise) of such
entity.
(o) "Preferred Stock" shall mean shares of Series A Junior Preferred
Stock, $.01 par value, of the Company and, to the extent that there is not
a sufficient number of shares of Series A Junior Preferred Stock authorized
to permit the full exercise of the Rights, any other series of Preferred
Stock, $.01 par value, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series A Junior
Preferred Stock.
(p) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(q) "Record Date" shall have the meaning set forth in the recital.
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(r) "Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
(s) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(t) "Rights Certificate" shall have the meaning set forth in Section
3(d) hereof.
(u) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(v) "Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) or such earlier date as a majority of
the Continuing Directors shall become aware of the existence of an
Acquiring Person.
(w) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or
indirectly, by such Person or by any corporation or other entity that is
otherwise controlled by such Person.
(x) "Summary of Rights" shall have the meaning set forth in Section
3(a) hereof.
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(y) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(z) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or
regulatory authority in respect of any transfer of any security, instrument
or right, including Rights, shares of Common Stock and Shares of Preferred
Stock.
(aa) "Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13(a).
(ab) "Voting Stock" shall mean (i) the Common Stock of the Company and
(ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with
the Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or
winding up.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
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Section 3. Issuance of Rights Certificates.
(a) On the Record Date (or as soon as practicable thereafter), the
Company or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first class mail, postage prepaid, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address of such holder
shown on the records of the Company.
(b) Until the Close of Business on the day (or such later date as may
be determined by action of the Board of Directors, upon approval by a majority
of the Continuing Directors) which is the earlier of (i) the tenth day after the
Stock Acquisition Date or (ii) the tenth Business Day after the date of the
commencement by any person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of any class of the then outstanding shares of
Voting Stock of the Company (irrespective of whether any shares are actually
purchased pursuant to any such offer) (the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights shall be evidenced by
the certificates for Common Stock registered in the name of the holders of
Common Stock (together with, in the case of
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certificates for Common Stock outstanding as of the Record Date, the Summary
of Rights) and not by separate Rights Certificates and the record holders of
such certificates for Common Stock shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only
simultaneously and together with the transfer of a share of Common Stock
(subject to adjustment as hereinafter provided). Until the Distribution Date
(or, if earlier, the Redemption Date or Final Expiration Date), the surrender
for transfer of any certificate for Common Stock shall constitute the
surrender for transfer of the Right or Rights associated with the Common
Stock evidenced thereby, whether or not accompanied by a copy of the Summary
of Rights.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date but prior to the earliest of
the Distribution Date, the Redemption Date or the Final Expiration Date and,
in certain circumstances provided in Section 22 hereof, may be issued in
respect of shares of Common Stock that become outstanding after the
Distribution Date. Certificates for Common Stock issued (including, without
limitation, certificates issued upon original issuance, disposition from the
Company's treasury or transfer or exchange of Common Stock) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date,
or the Final Expiration Date (or, in certain circumstances as provided in
Section 22 hereof, after the Distribution Date) shall have
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impressed, printed, written or stamped thereon or otherwise affixed thereto
the following legend:
This certificate also evidences and entitles the holder
hereof to the same number of Rights (subject to adjustment) as
the number of shares of Common Stock represented by this
certificate, such Rights being on the terms provided under the
Rights Agreement between Sonic Corp., and
____________________________ (the "Rights Agent"), dated as of
June 16, 1997, as it may be amended from time to time (the
"Rights Agreement"), the terms of which are incorporated herein
by reference and a copy of which is on file at the principal
executive offices of Sonic Corp. Under certain circumstances, as
set forth in the Rights Agreement, such Rights shall be evidenced
by separate certificates and shall no longer be evidenced by this
certificate. Sonic Corp. shall mail to the registered holder of
this certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
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circumstances as provided in Section 7(e) of the Rights
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Agreement, Rights issued to or Beneficially Owned by Acquiring
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Persons or their Affiliates or Associates (as such terms are
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defined in the Rights Agreement) or any subsequent holder of such
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Rights shall be null and void and may not be transferred to any
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Person.
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(d) As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if requested, send),
by first class mail, postage prepaid, to each record holder of the Common Stock
as of the Close of Business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a
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certificate in the form provided by Section 4 hereof (a "Rights
Certificate"), evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held. As of and after the
Distribution Date, the rights shall be evidenced solely by Rights
Certificates and may be transferred by the transfer of the Rights Certificate
as permitted hereby, separately and apart from any transfer of one or more
shares of Common Stock.
Section 4. Form of Rights Certificates.
The Rights Certificates (and the forms of election to purchase shares,
certificate and assignment to be printed on the reverse thereof), when, as and
if issued, shall be substantially in the form set forth in Exhibit C hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Common Stock or the Rights may from time to
time be listed or as the Company may deem appropriate to conform to usage or
otherwise and as are not inconsistent with the provisions of this Rights
Agreement. Subject to the provisions of Section 22 hereof, Rights Certificates
evidencing Rights whenever issued (i) shall be dated as of the date of issuance
of the Rights they represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof to purchase
such number of shares
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(including fractional shares which are integral multiples of one-thousandth
of a share) of Preferred Stock as shall be set forth therein at the price
payable upon exercise of a Right provided by Section 7(b) hereof as the same
may from time to time be adjusted as provided herein (the "Exercise Price").
Section 5. Countersignature and Registration.
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(a) Each Rights Certificate shall be executed on behalf of the
Company by its Chairman of the Board, President, any Vice President or its
Treasurer, either manually or by facsimile signature. Each Rights Certificate
shall be countersigned by the Rights Agent manually and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any Rights Certificate shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery of
the certificate by the Company, such Rights Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company. Any Rights Certificate may be signed
on behalf of the Company by any person who, on the date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or one or more offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Rights Certificate may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Rights Certificates,
entitling the registered holder to purchase a like number of shares of Preferred
Stock as the Rights Certificate or Rights Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer any Rights
Certificate shall surrender the Rights Certificate at the office of the Rights
Agent designated for the surrender of
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Rights Certificates with the form of certificate and assignment on the
reverse side thereof duly endorsed (or enclosed with such Rights Certificate
a written instrument of transfer in form satisfactory to the Company and the
Rights Agent), duly executed by the registered holder thereof or his attorney
duly authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate to be split up, combined or
exchanged at the office of the Rights Agent designated therefor. Thereupon,
the Rights Agent shall countersign and deliver to the person entitled thereto
a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
Transfer Tax that may be imposed in connection with any transfer, split up,
combination or exchange of any Rights Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f), 14 and 24
hereof, upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and
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cancellation of the Rights Certificate if mutilated, the Company shall issue
and deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Sections 7(e), 23(b) and 24 hereof). Except as otherwise provided herein, the
Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent in [City, State], together with payment of the Exercise
Price for each Right exercised, subject to adjustment as hereinafter provided,
at or prior to the Close of Business on the earliest of (i) June 16, 2007 (the
"Final Expiration Date"), (ii) the date on which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), (iii) the date on which
such Rights are exchanged as provided in Section 24 hereof or (iv) the time at
which the Rights expire pursuant to Section 13(e) hereof.
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(b) The Exercise Price shall initially be $85 for each one
one-thousandth (1/1000) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of Preferred
Stock or other securities to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof. The Exercise Price shall be payable in lawful money of the United
States of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Rights
Certificate representing exercisable Rights with the form of election to
purchase and the certificate contained therein duly executed, accompanied by
payment by certified check, cashier's check, bank draft or money order payable
to the Company of the Exercise Price for the shares to be purchased and an
amount equal to any applicable Transfer Tax required to be paid by the holder of
the Rights Certificate in accordance with Section 9(e) hereof, the Rights Agent
shall thereupon promptly (i) requisition from any transfer agent of the
Preferred Stock of the Company one or more certificates representing the number
of shares of Preferred Stock to be so purchased, and the Company hereby
authorizes such transfer agent to comply with all such requests, (ii) as
provided in Section 14(b), at the election of the Company, cause depositary
receipts to be issued in lieu of fractional shares of Preferred Stock, (iii) if
the election provided for in the immediately
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preceding clause (ii) has not been made, requisition from the Company the
amount of cash to be paid in lieu of the issuance of fractional shares in
accordance with section 14(b) hereof, (iv) after receipt of such Preferred
Stock certificates and, if applicable, depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder and (v) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Rights Certificate;
provided, however, that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall
promptly take the appropriate actions corresponding in such case to that
referred to in the foregoing clauses (i) through (v) of this Section 7(c).
Notwithstanding the foregoing provisions of this Section 7(c), the Company
may suspend the exercisability of the Rights for a period not in excess of
ninety (90) days, during which the Company seeks to register under the
Securities Act of 1933, as amended (the "Act"), and any applicable securities
law of any other jurisdiction, the shares of Preferred Stock to be issued
pursuant to the Rights.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall
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be issued by the Rights Agent to the registered holder of such Rights
Certificate or his assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are beneficially owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e) (upon approval
by a majority of the Continuing Directors) and subsequent transferees of such
Persons referred to in clause (y) and (z) above, shall be void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Rights
Agreement. The Company shall use all
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reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Rights
Certificates or any other Person as a result of its failure to make any
determination with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Rights Certificate shall be issued
pursuant to Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 7(e) or any Associate or Affiliate hereof; no Rights Certificate
shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the provisions of this Section
7(e) or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Rights Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose
Rights would be void pursuant to the provisions of this Section 7(e) shall be
cancelled.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate following the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise and (ii) provided such
23
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall
cancel and retire, any Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred
Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or out of its authorized and issued shares of Preferred Stock
held in its
24
treasury, such number of shares of Preferred Stock as will from time
to time be sufficient to permit the exercise in full of all outstanding Rights
and, after the occurrence of a Triggering Event, shall, to the extent reasonably
practicable, so reserve and keep available a sufficient number of shares of
Common Stock (and/or other securities) which may be required to permit the
exercise in full of all outstanding Rights.
(b) If the Preferred Stock (or, following the occurrence of a
Triggering Event, the Common Stock and/or other securities) is at any time
listed on a national securities exchange or included for quotation on any
transaction reporting system, then so long as the Preferred Stock (and,
following the occurrence of any such Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange or included for quotation on any such transaction reporting
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable (but only to the extent that it is
reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange or included for quotation on any
such transaction reporting system upon official notice of issuance upon such
exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all
25
shares of Preferred Stock delivered upon the exercise of Rights (or,
following the occurrence of a Triggering Event, shares of Common Stock and/or
other securities) shall, at the time of delivery of the certificates for such
shares or other securities (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid
and nonassessable.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of an event described in Section 11(a)(ii),
or as soon as is required by law following the Distribution Date, as the case
may be, a registration statement under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (x) the date as of which the Rights are no longer exercisable for such
securities, and (y) the date of the expiration of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Act and permit it to become effective. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
26
exercisability of the Rights. Notwithstanding any provision of this Agreement
to the contrary, the Rights shall not be exercisable in any jurisdiction unless
the requisite qualification is such jurisdiction shall have been obtained and
until a registration statement under the Act (if required) shall have been
declared effective.
(e) The Company covenants and agrees that it will pay when due and
payable any and all U.S. federal and state Transfer Taxes which may be payable
in respect of the issuance or delivery of the Rights Certificates or of any
shares of Preferred Stock (or, following the occurrence of a Triggering Event,
Common Stock and/or other securities) issued or delivered 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 a Rights
Certificate to a Person other than, or the issuance or delivery of certificates
for Preferred Stock (or, following the occurrence of a Triggering Event, Common
Stock and/or other securities) upon exercise of Rights in a name other than that
of, the registered holder of the Rights Certificate, and the Company shall not
be required to issue or deliver a Rights Certificate or certificate for
Preferred Stock (or, following the occurrence of a Triggering Event, Common
Stock and/or other securities) to a Person other than such registered holder
until any such Transfer Tax shall have been paid (any such Transfer Tax being
payable by the holder of such Rights Certificate at the time of surrender)
27
or until it has been established to the Company's satisfaction that no such
Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the securities
represented thereby on, and such certificate shall be dated as of, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price (and any applicable Transfer Taxes) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated as of, the next succeeding Business Day on which the applicable
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
28
Section 11. Adjustment of Exercise Price, Number and Kind of Shares
or Number of Rights. The Exercise Price, the number and kind of shares which
may be purchased upon exercise of a Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (w) declare a dividend on the Preferred Stock
payable in Preferred Stock, (x) subdivide the outstanding Preferred
Stock, (y) combine the outstanding Preferred Stock into a smaller
number of shares of Preferred Stock or (z) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Exercise 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 the
aggregate number and kind of shares of capital
29
stock which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred 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; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to this Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event that
any Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall become an Acquiring Person, unless
the event causing such Person to become an Acquiring Person is an
acquisition of shares of Common Stock pursuant to a cash tender offer
made pursuant to Section 14(d) of the Exchange Act for all outstanding
shares of Common Stock (other than shares of Voting Stock
30
beneficially owned by the Person making the offer or by its Affiliates
or Associates) at a price and on terms determined by at least a
majority of the Continuing Directors to be (a) at a price which is
fair to stockholders (taking into account all factors which such
members of the Board deem relevant, including, without limitation,
prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the Company and
its stockholders, then, except as otherwise provided in this
Section 11, each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon exercise of
such Right at a price equal to the then current Exercise Price
multiplied by the number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable, in accordance
with the terms of this Agreement and n lieu of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Exercise Price by
the number of one one-thousandths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (y) 50%
of the Fair Market Value
31
of the Company's Common Stock (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event; provided,
however, that if the transaction that would otherwise give rise to
the foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13 hereof
shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In lieu of issuing Common Stock in accordance with
Section 11(a)(ii) hereof, the Company may, if the Board of Directors
of the Company, upon approval by a majority of the Continuing
Directors, determines that such action is necessary or appropriate and
not contrary to the interest of holders of Rights (and, in the event
that the number of shares of Common Stock which are authorized by the
Company's Restated Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of the
Rights, the Company shall): (A) determine the excess of (1) the value
of the Common Stock issuable upon the exercise of a Right (the
"Current Value") over (2) the Exercise Price (such excess being
referred to as the "Spread") and (B) with respect to each
32
Right, make adequate provision to substitute for such Common Stock,
upon exercise of the Rights, (1) cash, (2) a reduction in the Exercise
Price, (3) other equity securities of the Company (including, without
limitation, shares or units of shares of any series of preferred stock
which the Board of Directors of the Company, upon approval by a
majority of the Continuing Directors, has deemed to have the same
value as Common Stock (such shares or units of shares of preferred
stock are herein called "common stock equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any combination of
the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board of
Directors of the Company, upon approval by a majority of the
Continuing Directors; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the occurrence of an event described
in Section 11(a)(ii), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring
payment of the Exercise Price, Common Stock (to the extent available),
and then, if necessary, cash, which shares and/or cash have an
33
aggregate value equal to the Spread. If the Board of Directors, upon
approval by a majority of the Continuing Directors, shall determine
in good faith that it is likely that sufficient additional Common
Stock could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the
occurrence of an event described in Section 11(a)(ii), in order that
the Company may seek stockholder approval for the authorization of
such additional shares. To the extent that the Company determines
that some action need be taken pursuant to the preceding sentences of
this Section 11(a)(iii), the Company may suspend the exercisability of
the Rights until the expiration of any such period, as extended, in
order to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to this
Section 11(a)(iii) and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect and shall promptly notify the Rights
Agent of such suspen-
34
sion. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per share of the Common Stock at the Close of
Business on the date of the occurrence of one of the events described
in Section 11(a)(ii) and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common stock on such
date.
(b) In the event that the Company shall, after the Record Date, fix a
record date for the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock (or shares
having the same rights, privileges and preferences as the Preferred Stock
("equivalent preferred stock")) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred Stock or
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the Fair Market Value per share of the Preferred Stock (as defined in
Section 11(d)) on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record date
plus the number of
35
shares of Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or the equivalent preferred stock so
to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Fair Market
Value and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. Preferred Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Exercise Price shall be adjusted to be the Exercise
Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in
36
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) or evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value per share of the Preferred Stock on such
record date, less the Fair Market Value 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 Preferred Stock and the denominator of
which shall be the Fair Market Value per share of the Preferred Stock;
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Exercise
Price shall again be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of this Rights Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common
37
Stock or any other stock or any Rights or other security or any other
property on any date shall be determined as provided in this Section 11(d).
In the case of a publicly-traded stock or other security, the Fair Market
Value on any date shall be deemed to be the average of the daily closing
prices per share of such stock or per unit of such other security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the Fair Market
Value per share of any security is determined during a period which includes
any date that is within 30 Trading Days after (i) the ex-dividend date for a
dividend or distribution on such security payable in shares of such security
or securities convertible into shares of such security, or (ii) the effective
date of any subdivision, split, combination, consolidation, reverse stock
split or reclassification of such security, then, and in each such case, the
Fair Market Value shall be appropriately adjusted by the Board of Directors
of the Company to take into account ex-dividend or post-effective date
trading. The closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way (in either case, as reported in the
applicable transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the securities
are not listed or admitted
38
to trading on the New York Stock Exchange, as reported in the applicable
transaction reporting system with respect to securities listed on the
principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average
of the high bid and low asked prices) in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use; or, if no bids
for such security are quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in such security selected by the Board of Directors of the
Company (upon approval by a majority of the Continuing Directors). The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for
the transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day. If a security
is not publicly held or not so listed or traded, "Fair Market Value" shall
mean the fair value per share of stock or per other unit of such other
security, as determined in good faith by the Board of Directors of the
Company (upon approval by a majority of the Continuing Directors); provided,
however, that, if the Preferred Stock is not publicly traded, the
39
Fair Market Value of a share of Preferred Stock shall be conclusively deemed
to be the Fair Market Value of a share of Common Stock (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one thousand. In the case of
property other than securities, the "Fair Market Value" thereof shall be
determined in good faith by the Board of Directors of the Company (upon
approval by a majority of the Continuing Directors). Any such determination
of Fair Market Value shall be described in a statement filed with the Rights
Agent and shall be binding upon the Rights Agent and the holders of the
Rights.
(e) All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-thousandth of a share, as the case may
be. No adjustment in the Exercise Price shall be required unless adjustment
would require an increase or decrease of at least 1% in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. Notwithstanding the preceding sentence, any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates the adjustment or (ii) the
date of the expiration of the right to exercise the Rights.
40
(f) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Exercise Price and the number of shares to be issued upon
exercise of the Rights as in the initial Rights Certificates issued hereunder
but, nevertheless, shall represent the Rights as so adjusted.
(g) Before taking any action that would cause an adjustment reducing
the purchase price per whole share of Preferred Stock upon exercise of the
Rights below the then par value, if any, of the shares of Preferred Stock, the
Company shall use its best efforts to 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 non-assessable shares of such Preferred Stock
at such adjusted purchase price per share.
(h) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in ββββββββ ββ(β), (β), (β), (β), (β),
(β), (β), (β) and (k), and the
41
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares.
(i) Unless the Company shall have exercised its election as provided
in Section 11(j), upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of one one-thousandth of
a share of Preferred Stock (calculated to the nearest one one-millionth of a
share) obtained by (i) multiplying (x) the number of one one-thousandths of a
share covered by a Right immediately prior to this adjustment by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise
Price and (ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(j) The Company may elect on or after the date of any adjustment of
the Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each
42
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise 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 Exercise
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(j), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 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
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights
43
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 Rights Certificates on the record date specified in the
public announcement.
(k) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exchangeable for Preferred Stock, dividends on Preferred
Stock payable in Preferred Stock or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such stockholders.
(l) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock) into
a greater or lesser number of shares
44
of Common Stock, then in any such case (A) the number of one one-thousandths
of a share of Preferred Stock purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the number of one
one-thousandths of a share of Preferred Stock so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately before such event and the
denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and (B) each share of Common Stock outstanding
immediately after such event shall have issued with respect to it that number
of Rights which each share of Common Stock outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in
this Section 11(l) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or consolidation is
effected.
Section 12. Certification of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Rights Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the
45
failure of the Company to make such certification or give such notice shall
not affect the validity of or the force or effect of the requirement for such
adjustment. Any adjustment to be made pursuant to Section 11 or Section 13
of this Rights Agreement shall be effective as of the date of the event
giving rise to such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) Except for any transaction approved by the Board of Directors
(upon approval by a majority of the Continuing Directors), in the event that, at
any time on or after the Distribution Date, (x) the Company shall, directly or
indirectly, consolidate with, or merge with and into, any other Person or
Persons and the Company shall not be the surviving or continuing corporation of
such consolidation or merger, or (y) any Person or Persons shall, directly or
indirectly, consolidate with, or merge with and into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or of the Company or cash or any
other property, or
46
(z) the Company or one or more of its Subsidiaries shall, directly or
indirectly, sell or otherwise transfer to any other Person or any Affiliate
or Associate of such Person, in one or more transactions, or the Company or
one or more of its Subsidiaries shall sell or otherwise transfer to any
Persons in one or a series of related 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), then, on the first occurrence of any
such event (except as may be contemplated by Section 13(e) hereof), proper
provision shall be made so that (i) each holder of record of a Right, except
as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof and payment of the Exercise Price in
accordance with the terms of this Rights Agreement, such number of shares of
validly issued, fully paid, non-assessable and freely tradeable Common Stock
of the Principal Party (as defined herein), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall,
based on the Fair Market Value of the Common Stock of the Principal Party on
the date of the consummation of such consolidation, merger, sale or transfer,
equal twice the Exercise Price; (ii) such Principal Party 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
Rights Agreement; (iii) the term "Company"
47
for all purposes of this Rights Agreement shall thereafter be deemed to refer
to such Principal Party; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with the provisions of Section 9
hereof) in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the occurrence of
any event described in clause (x), (y) or (z) above of this Section 13(a).
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a) hereof: (A) the Person that is the issuer
of the securities into which shares of Common Stock of the Company are changed
or otherwise exchanged or converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer of the Common Stock of which has
the greatest market value or (B) if no securities are so issued, (x) the Person
that is the other party to the merger or consolidation and that survives such
merger or consolidation, or, if there is more than one such Person,
48
the Person the Common Stock of which has the greatest market value or (y) if
the Person that is the other party to the merger or consolidation does not
survive the merger or consolidation, the Person that does survive the merger
or consolidation (including the Company if its survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons as is the issuer
of Common Stock having the greatest market value of shares outstanding;
provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer to such other
Person, or if such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of all of which are and have been so registered,
the term "Principal Party" shall refer to
49
whichever of such Persons is the issuer of the Common Stock having the
greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger or
sale or transfer of assets or earning power referred to in Section 13(a) unless
the Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under the act with
respect to the Rights and the securities purchasable upon exercise of
50
the Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the date of expiration of the
Rights, and similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act. In the event that any of the transactions
described in Section 13(a) hereof shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the
Rights which have not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter
51
be exercisable in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Fair
Market Value per share (determined pursuant to Section 11(b) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then Fair Market Value (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special tax or similar
payment in connection with the issuance to any holder of a Right of Common Stock
of such Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended, or
that the authorized securities shall be redeemed, so that the applicable
provision will have no effect on the benefits
52
intended to be afforded by the Rights in connection with, or as a consequence
of, the consummation of the proposed transaction.
(e) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons (or a wholly-owned subsidiary of any such Person or Persons)
who acquired shares of Common Stock pursuant to a cash tender offer for all
outstanding shares of Common Stock which complies with the provisions of Section
11(a)(ii) hereof relating to fair price determination by a majority of the
Continuing Directors, (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to such cash tender
offer and (iii) the form of consideration being offered to the remaining holders
of shares of Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such cash tender offer. Upon consummation of
any such transaction contemplated by this Section 13(e), all Rights hereunder
shall expire.
53
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights (i.e., Rights
to acquire less than one one-thousandth of a share of Preferred Stock). If the
Company shall determine not to issue such fractional Rights, then, in lieu of
such fractional Rights, there shall be paid to the holders of record of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Fair Market
Value of a whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of
one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one-thousandth of a share). In lieu of issuing fractions
of shares of Preferred Stock, the Company may, at its election, issue depositary
receipts evidencing fractions of shares pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have
all of the rights, privileges and preferences to which they would be entitled as
owners of the Preferred Stock. With respect to fractional shares that are not
integral multiples of one-
54
thousandth of a share, if the Company does not issue such fractional shares
or depositary receipts in lieu thereof, there shall be paid to the holders of
record of Rights Certificates at the time such Rights Certificates are
exercised as herein provided an amount in cash equal to the same fraction of
the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Rights Certificate in
the
55
manner provided in such Rights Certificate and in this Rights 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 Rights 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 Rights Agreement.
Section 16. Agreement of Right Holders. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by
the certificates for Common Stock registered in the name of the holders of
Common Stock (together, as applicable, with the Summary of Rights), which
certificates for Common Stock shall also constitute certificates for
Rights, and not by separate Rights Certificates, and each Right shall be
transferable only simultaneously and together with the transfer of shares
of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly
56
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Rights 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 Rights Certificates or the associated Common
Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights
57
Certificate shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Stock or any other securities which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of
58
the Rights Agent, for anything done or omitted to be done by the Rights Agent
in connection with the acceptance and administration of this Rights
Agreement, including the cost and expenses of defending against any claim of
liability relating to the Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, 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 Rights Agreement in reliance upon any
Rights Certificate or certificate for Preferred Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Rights Agreement without the execution or filing of any paper or
59
any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Rights
Agreement any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; in all such cases such
60
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
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 any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent. Any 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 Rights Agreement in reliance upon such certificate.
61
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights 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 Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization
62
or reservation of any shares of Preferred Stock to be issued pursuant to this
Rights Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
[Chairman of the Board, the President or any Vice President or the Secretary or
the Treasurer of the Company, ]and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, 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
63
freely as though it were not the Rights Agent under this Rights Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate following the form of
election to purchase set forth on the reverse side of such Rights Certificate
has either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take further action with respect to
the requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock and the Preferred Stock
64
by registered or certified mail. The Company may remove the Rights Agent or
any successor Rights Agent (with or without cause) 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 and the Preferred
Stock by registered or certified mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal
of a Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to
make such appointment within a period of 30 days after such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States
or of any state thereof, in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision
65
or examination in the conduct of its corporate trust or stock transfer
business by federal or state authorities and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate controlled by a corporation described in
clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Rights Agent without further act or deed,
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and Preferred Stock, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until
a
66
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Exercise Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Rights Agreement.
Section 23. Redemption.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors (upon approval by a majority of the
Continuing Directors), redeem all but not less than all of the then outstanding
Rights, at any time prior to the Close of Business on the earlier of (i) the
tenth day following the Stock Acquisition Date, provided, however, that, during
the time period relating to when the Rights may be redeemed, the Board of
Directors of the Company (upon approval of a majority of the Continuing
Directors) may extend the time during which the Rights may be redeemed to be at
any time as may be determined by the Board of Directors of the Company and the
Continuing Directors or (ii) the Final Expiration Date, at a redemption price of
$.01 per Right, appropriately adjusted to reflect
67
any stock split, stock dividend or similar transaction after the date hereof
(the "Redemption Price").
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate at the effective time of the action of the
Board of Directors and the Continuing Directors ordering the redemption of the
Rights and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after the effective time of the
action of the Board of Directors and the Continuing Directors 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 all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Each notice of
redemption will state the method by which the payment of the Redemption Price
will be made. At the option of the Board of Directors, the Redemption Price may
be paid in cash to each Rights holder or by the issuance of shares (and, at the
Company's election pursuant to Section 14(b) hereof, cash or depositary receipts
in lieu of fractions of shares other than fractions
68
which are integral multiples of one one-thousandth (1/1000) of a share) of
Preferred Stock having a Fair Market Value equal to such cash payment.
Section 24. Exchange.
(a) By the vote of a majority of the Board of Directors (upon
approval by a majority of the Continuing Directors), 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 which have become void pursuant to Section 7(e) hereof) for shares of
Common Stock at an exchange rate 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 (the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of any class of voting stock of the Company then
outstanding.
(b) Without any further action and without any notice, the right to
exercise the Rights to be so exchanged will terminate at the effective time of
the action of the Board of Directors and the Continuing Directors ordering the
exchange and the only right thereafter of each holder of such Rights shall be to
receive that number of shares of
69
Common Stock equal to the number of such rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give notice of
the exchange to the holders of such Rights then outstanding by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice; provided, however, that the failure to give,
or any defect in, any such notice shall not affect the validity of such
exchange. Each such notice shall state the method by which the exchange for
rights will be effected and, in the event of a partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become
void pursuant to Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock for shares of Common Stock
exchangeable for the Rights, at the initial rate of one one-thousandth of a
share of Preferred Stock for each share of Common Stock, as appropriately
adjusted to reflect adjustments in the voting rights of the Preferred Stock
pursuant to the terms thereof, so that the fraction of a share of Preferred
Stock delivered
70
in lieu of each share of Common Stock shall have the same voting rights as
one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall either take such action as may be necessary to authorize
additional Common Stock or Preferred Stock for issuance upon exchange of the
Rights or, alternatively, by the vote of a majority of the Board of Directors
(upon approval by a majority of the Continuing Directors with respect to each
Right, (i) pay cash in an amount equal to the Exercise Price, in lieu of issuing
Common Stock or Preferred Stock in exchange therefor, or (ii) issue debt or
equity securities, or a combination thereof, having a value equal to the Current
Value (as hereinafter defined) of the Common Stock or Preferred Stock
exchangeable for each such Right, where the value of such securities shall be
determined in good faith by the Board of Directors (upon approval by a majority
of the Continuing Directors), or (iii) deliver any combination of cash,
property, Common Stock, Preferred Stock and/or other securities having a value
equal to the Current Value in exchange for each Right. The term "Current
Value," for purposes of this Section 24, shall mean the product of the per share
market price of the Common Stock (determined pursuant to Section 11(d) on the
date of the occurrence of
71
the event described above in subparagraph (a)), multiplied by the number of
shares of Common Stock for which the Right otherwise would be exchangeable if
there were sufficient shares available. To the extent that the Company
determines that some action need be taken pursuant to clauses (i), (ii) or
(iii) of this Section 24(d), the Board of Directors (upon approval by a
majority of the Continuing Directors) may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred,
in order to seek any authorization of additional Common Stock or Preferred
Stock and/or to decide the appropriate form of distribution to be made
pursuant to the above provision and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to each registered holder of a Rights Certificate with regard to which
a fractional share of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the fair market value of a whole share of
Common Stock. For the purposes of this paragraph (e), the fair market value of
a whole share of
72
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall propose
(i) to pay any dividend payable in stock of any class to the holders of its
Preferred Stock or to make any other distribution to the holders of its
Preferred Stock (other than a regular quarterly cash dividend), (ii) to offer to
the holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding Preferred Stock), (iv) to effect any consolidation or merger with or
into, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of record of a Rights
Certificate, in accordance with Section 26, notice of such proposed action,
which shall
73
specify the record date for the purposes of such stock dividend or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale or transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of record of Common Stock or Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of record of the Preferred 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 record of Common Stock or
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
(b) In case any event described in Section 11(a)(ii) hereof shall
occur, then the Company shall, as soon as practicable thereafter, give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by
74
the Rights Agent or by the holder of record of any Rights 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:
Sonic Corp.
βββ ββββ ββββββ
ββββββββ ββββ, ββββββββ βββββ
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of record
of any Rights Certificate or Right 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:
____________________________
____________________________
____________________________
Attention: _________________
Notices or demand authorized by this Rights Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Rights Certificate or
Right shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. For as long as the Rights
are then redeemable and except as provided in the last sentence of this Section
27, the Company may in its sole and absolute discretion, and the Rights Agent
shall if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights. At any time when
the Rights are not then redeemable and except as provided in the last sentence
of this Section 27, the
75
Company may, and the Rights Agent shall if the Company so directs, supplement
or amend this Rights Agreement without the approval of any holders of Rights
Certificates (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable,
provided that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Rights
Certificates. Upon the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Rights Agreement to the contrary, supplements or amendments may be made only
upon approval by a majority of the Continuing Directors.
Section 28. Successors. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the
76
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the holders of
record of the Rights Certificates (and, prior to the Distribution Date, the
holders of Common Stock in their capacity as holders of the Rights).
Section 30. Determinations and Actions by the Board; etc. The Board
of Directors (upon approval by a majority of the Continuing Directors) shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board, or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including,
77
for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good faith
(and with the approval of a majority of the Continuing Directors then in
office) in accordance with the preceding sentence, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and (y) not subject any director to any
liability to the holders of the Rights. Notwithstanding anything contained in
this Agreement to the contrary, whenever any action, calculation,
interpretation or determination made pursuant to this Agreement requires the
approval of a majority of the Continuing Directors, and no Continuing
Directors are then in office, such action, calculation, interpretation or
determination may not be made.
Section 31. Delaware Contract. This Rights Agreement and each Rights
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 and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 32. Counterparts. This Rights 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.
78
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Severability. If any term, provision, covenant or
restriction of this 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 this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
SONIC CORP.
Attest:_________________ By: _____________________
Name:
Title:
[RIGHTS AGENT]
Attest:_________________ By: _____________________
Name:
Title:
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PREFERRED STOCK
of
SONIC CORP.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
--------------------------------------
SONIC CORP., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the "Corporation"),
DOES HEREBY CERTIFY that pursuant to the authority vested in the Board of
Directors by the Restated Certificate of Incorporation of the Corporation and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors on June 16, 1997 adopted a
resolution providing for the authorization of a series of Preferred Stock, as
follows:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Restated
Certificate of Incorporation, the Board of Directors hereby creates a series of
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Preferred Stock" (the "Series A Junior Preferred
Stock") and the number of shares constituting the Series A Junior
Preferred Stock shall be fifty thousand. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A Junior
Preferred Stock to a number less than the number of shares then outstanding
plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Junior Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Junior Preferred Stock with respect to dividends, the holders of
shares of Series A Junior Preferred Stock, in preference to the holders of
Common Stock, par value $.01 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (x) $1.00 or (y)
subject to the provision for adjustment hereinafter set forth, 1000 times the
aggregate per share amount of all cash dividends, and 1000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series A Junior Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under clause (y) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
2
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Junior Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Junior Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Junior
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Preferred Stock shall entitle the holder thereof to
1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at
3
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series A Junior Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Junior Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Preferred
Stock, except dividends paid ratably on the Series A Junior Preferred Stock
and all such parity
4
stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Preferred Stock, provided
that the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (as to dividends and upon dissolution, liquidation
and winding up) to the Series A Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Junior Preferred Stock, or any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Restated Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the
5
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior Preferred
Stock unless, prior thereto, the holders of shares of Series A Junior
Preferred Stock shall have received the higher of (i) $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or (ii) an aggregate
amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 1000 times the aggregate amount to be distributed per share
to holders of shares of Common Stock; nor shall any distribution be made (2)
to the holders of shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Preferred Stock, except distributions made ratably on the Series A Junior
Preferred Stock and all such parity stock in proportion to the total amounts
to which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Junior Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Junior Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a
6
greater or lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior Preferred
Stock shall not be redeemable.
Section 9. Rank. The Series A Junior Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least a majority of the outstanding shares of Series A Junior
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chief Executive Officer and President and
attested by its Secretary this ___ day of ____________ __, 1997.
SONIC CORP.
By: _________________________
Name:
Title:
Attest:
By:________________________
Name:
Title:
7
Exhibit B
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS
ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
SONIC CORP.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On June 16, 1997, the Board of Directors of Sonic Corp. (the "Company")
declared a dividend distribution of one right (a "Right") for each outstanding
share of Common Stock, par value $.01 per share (the "Common Stock"), of the
Company. The distribution is payable as of June 27, 1997 to stockholders of
record on that date. Each Right entitles the registered holder to purchase
from the Company one one-thousandth (1/1000) of a share of preferred stock of
the Company, designated as Series A Junior Preferred Stock (the "Preferred
Stock") at a price of $85 per one one-thousandth (1/1000) of a share ("Exercise
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement dated as of June 16, 1997 (the "Rights
Agreement") between Sonic Corp. and _________________ (the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
The Rights become exercisable upon the close of business on the day (the
"Distribution Date") which is the earlier of (i) the tenth day following a
public announcement that a person or group of affiliated or associated
persons, with certain exceptions set forth below, has acquired beneficial
ownership of 15% or more of any class of the outstanding voting stock of the
Company (an "Acquiring Person") and (ii) the tenth business day after the
date of the commencement or announcement of a person's or group's intention
to commence a tender or exchange offer the consummation of which would result
in the ownership of 15%
or more of any class of the Company's outstanding voting stock (even if
no shares are actually purchased pursuant to such offer), or such later date as
may be determined by a majority of the Board of Directors and the Continuing
Directors (as defined in the Rights Agreement); prior thereto, the Rights will
not be exercisable, will not be represented by a separate certificate, and will
not be transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of June 27, 1997, by such Common Stock certificate with a copy of this Summary
of Rights attached thereto. An Acquiring Person does not include (A) the
Company, (B) any subsidiary of the Company, (C) any employee benefit plan or
employee stock plan of the Company or of any subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan or (D) any person or group whose
ownership of 15% or more of the shares of any class of voting stock of the
Company then outstanding results solely from (i) any action or transaction or
transactions approved by a majority of the Board of Directors and the Continuing
Directors before such person or group became an Acquiring Person or (ii) a
reduction in the number of issued and outstanding shares of voting stock of the
Company pursuant to a transaction or transactions approved by a majority of the
Board of Directors and the Continuing Directors (provided that, in the event any
person or group set forth in clause (D) does not become an Acquiring Person by
reason of clause (i) or (ii) above, such persons set forth in clause (D) shall
nonetheless become an Acquiring Person upon acquisition of any additional shares
of the Company's voting stock unless such acquisition of additional voting stock
will not result in such person or group becoming an Acquiring Person by reason
of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after June 27, 1997 will contain a
legend incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Common Stock certificates outstanding as of June 27,
1997, with or without a copy of this Summary of Rights attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the Distribution Date.
2
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on June 16, 2007, unless earlier redeemed
or exchanged by the Company, in each case as described below.
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. Each share of
Preferred Stock will be entitled to a minimum quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 1000 times the
dividend declared on the Company's Common Stock. In the event of the
liquidation of the Company, the holders of Preferred Stock will be entitled to
receive a payment of the greater of (i) $100.00 per share plus accrued and
unpaid dividends or (ii) 1000 times the aggregate amount to be distributed per
share to holders of Common Stock. Each share of Preferred Stock will have 1000
votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is exchanged, each
share of Preferred Stock will be entitled to receive 1000 times the amount
received per share of Common Stock. The rights of Preferred Stock as to
dividends, liquidation and voting are protected by anti-dilution provisions.
The Exercise Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths of a
share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a dividend on
the Common Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
3
Unless the transaction is approved by a majority of the Board of Directors
and the Continuing Directors, in the event that, after the time the Rights
become exercisable, the Company were to be acquired in a merger or other
business combination (in which any shares of Common Stock are changed into or
exchanged for other securities or assets) (other than a merger that follows a
cash tender offer for all outstanding shares of the Company, at a price
determined by a majority of the Continuing Directors to be fair and otherwise in
the best interests of the Company and its stockholders) or more than 50% of the
assets or earning power of the Company and its subsidiaries (taken as a whole)
were to be sold or transferred in one or a series of related transactions, the
Rights Agreement provides that proper provision will be made so that each holder
of record of a Right, will from and after such date, have the right to receive,
upon payment of the Exercise Price, that number of shares of common stock of the
acquiring company having a market value at the time of such transaction equal to
two times the Exercise Price. In addition, in the event that a person or group
of affiliated or associated persons becomes an Acquiring Person (unless such
acquisition is made pursuant to a cash tender offer determined to be fair to the
stockholders of the Company, as described in the preceding sentence), the Rights
Agreement provides that proper provision will be made so that each holder of
record of a Right, other than the Acquiring Person (whose Rights will thereupon
become null and void), will thereafter have the right to receive, upon payment
of the Exercise Price, that number of shares of the Common Stock (or cash, other
securities or property) having a market value at the time of the transaction
equal to two times the Exercise Price (such market value to be determined with
reference to the market value of the Company's Common Stock as provided in the
Rights Agreement).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share) may, at the election of the
Company, be evidenced by depositary receipts. The Company may also issue cash
in lieu of fractional shares which are not integral multiples of one
one-thousandth of a share.
At any time on or prior to the close of business on the earlier of (i)
the tenth day after the time that a person (or group of affiliated or
associated persons) has become an Acquiring Person (or such later date as a
majority of the Board of Directors and the Continuing Directors may
determine) or (ii) June 16, 2007, the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price"), with
the approval of the Continuing Directors. Immediately upon the effective
time of the action of the Board of Directors of the Company
4
authorizing redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
For as long as the Rights are then redeemable, the Company may amend the
Rights in any manner, including an amendment to extend the time period in which
the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Amendments to the Rights Agreement require the approval of the Continuing
Directors.
At any time after a person (or group of affiliated or associated persons)
becomes an Acquiring Person and prior to the acquisition by any such person or
group of 50% or more of any class of outstanding voting stock of the Company,
the Board of Directors of the Company (with the approval of the Continuing
Directors) may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock (or a fraction of a share of Preferred Stock or other
consideration having equivalent market value) per Right (subject to adjustment).
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
June 17, 1997. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
which is incorporated herein by reference.
5
Exhibit C
[Form of Rights Certificate]
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER JUNE 16, 2007 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY
AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT
(AS REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
Rights Certificate
SONIC CORP.
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 June 16, 1997 (the "Rights Agreement") between Sonic
Corp., a Delaware corporation (the "Company"), and ________________________ (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(New York time) on June 16, 2007 at the office of the Rights Agent designated in
the Rights Agreement for such purpose, or its successor as Rights Agent, one
one-thousandth (1/1000) of a fully paid nonassessable share of Series A Junior
Preferred Stock (the "Preferred Stock") of the Company at a purchase price of
$85, as the same may from time to time be adjusted in accordance with the Rights
Agreement (the "Exercise Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Rights
Certificate, as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the holders of record of Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated in the Rights
Agreement for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder of record to purchase a like aggregate number of shares of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right, subject to adjustment or (ii) may be exchanged in whole
or in part for shares of the Company's Common Stock, par value $.01 per share,
shares of Preferred Stock or substantially equivalent rights or other
consideration as determined by the Company.
No fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-thousandth (1/1000) of a share) are
required to be issued upon the exercise of any Right or Rights evidenced
hereby, and in lieu thereof the Company may cause depositary receipts to be
issued and/or a cash payment may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything
2
contained in the Rights Agreement or herein be construed to confer upon 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 meeting thereof, or to give or withhold consent to any
corporate action 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 Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ____________.
SONIC CORP.
By: _________________________
Name:
Title:
Countersigned:
[RIGHTS AGENT]
By: __________________________
Name:
Title:
3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificates.)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto _____________________________________
______________________________________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint _________
Attorney to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________
_________________________________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Rights
Certificate)
Signature Guaranteed:
4
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated: _______________ __________________________________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Rights
Certificate)
5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Rights Certificate.)
TO SONIC CORP.:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock (or other securities) issuable upon the exercise of such Rights
and requests that certificates for such share(s) be issued in the following
name:
Please insert social security
or other identifying number: ___________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:____________
___________________________________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Rights
Certificate)
Signature Guaranteed:
6
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being exercised by
or on behalf of a Person who is or was an Acquiring Person or an Associate or an
Affiliate thereof (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated:_____________ __________________________________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Rights
Certificate)
7