EXHIBIT 4.1
__________________________________________
WEEKS CORPORATION
and
Rights Agent
_____________________
Form of Rights Agreement
Dated as of , 1998
__________________________________________
Table of Contents
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Section Page
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Section 1. Certain Definitions................................................ 1
Section 2. Appointment of Rights Agent........................................ 8
Section 3. Issuance of Right Certificates..................................... 8
Section 4. Form of Right Certificates......................................... 11
Section 5. Countersignature and Registration.................................. 12
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates............ 13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...... 15
Section 8. Cancellation and Destruction of Right Certificates................. 18
Section 9. Reservation and Availability of Capital Stock...................... 18
Section 10. Preferred Stock Record Date........................................ 21
Section 11. Adjustments to Number and Kind of Shares; Number of Rights
or Purchase Price.................................................. 21
Section 12. Certification of Adjustments....................................... 35
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................... 36
Section 14. Fractional Rights and Fractional Shares............................ 42
Section 15. Rights of Action................................................... 44
Section 16. Agreement of Right Holders......................................... 45
Section 17. Right Certificate Holder Not Deemed a Shareholder.................. 46
Section 18. Concerning the Rights Agent........................................ ▇▇
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▇▇▇▇▇▇▇ ▇▇. Merger or Consolidation or Change of Name of Rights Agent.......... 47
Section 20. Duties of Rights Agent............................................. 48
Section 21. Change of Rights Agent............................................. 51
Section 22. Issuance of New Right Certificates................................. 53
Section 23. Redemption and Termination......................................... 53
Section 24. Exchange........................................................... 55
Section 25. Notice of Proposed Actions......................................... 57
Section 26. Notices............................................................ 58
Section 27. Supplements and Amendments......................................... 59
Section 28. Determinations and Actions by the Board............................ 60
Section 29. Successors......................................................... 61
Section 30. Benefits of this Agreement......................................... 61
Section 31. Governing Law...................................................... 62
Section 32. Counterparts....................................................... 62
Section 33. Descriptive Headings............................................... 62
Section 34. Severability....................................................... 62
Exhibit A -- Form of Articles of Amendment
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights To Purchase Preferred Stock
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RIGHTS AGREEMENT
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This Agreement (this "Agreement"), dated as of , 1998,
between WEEKS CORPORATION, a Georgia corporation (the "Company"), and
, a corporation (the "Rights Agent").
W I T N E S S E T H:
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WHEREAS, the Board of Directors of the Company (i) authorized the issuance
and declared a dividend distribution of one right (a "Right") for each share of
the Common Stock (as defined herein), of the Company outstanding as of the Close
of Business (as defined herein) on June 30, 1998 (the "Record Date"), each Right
initially representing the right to purchase one one-thousandth of a share of
Preferred Stock (as defined herein), and (ii) further authorized the issuance of
one Right with respect to each share of Common Stock of the Company that shall
become outstanding between the Record Date, and the earliest of the Distribution
Date, the Expiration Date or the Final Expiration Date (each such term as
defined herein).
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
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the outstanding Common Stock of the Company; provided,
however, that (i) the term "Acquiring Person" shall not include an Exempt Person
or a Permitted Holder; (ii) a Person shall not be deemed to have become an
Acquiring Person for any purpose of this Agreement if the Board of Directors in
its good faith judgment determines that a Person has inadvertently become the
Beneficial Owner of 15% or more of the outstanding Common Stock of the Company
(or in the case of a Permitted Holder, has inadvertently acquired additional
shares of Common Stock of the Company so that it is no longer a Permitted
Holder) and within ten days after the date upon which the Company shall first
become aware of the occurrence of such an event, the Board of Directors in its
sole discretion provides such Person with a fifteen day period to divest a
sufficient number of shares so that such Person no longer is the Beneficial
Owner of 15% or more of the outstanding Common Stock of the Company (or in the
case of a Permitted Holder, to divest all shares of Common Stock of the Company
which prevent such Person from being a Permitted Holder), and such Person has so
divested such shares of Common Stock of the Company at the end of any such
fifteen day period and has not acquired any additional shares of Common Stock of
the Company prior to the end of such fifteen day period; and (iii) shares of
Common Stock Beneficially Owned by the Company or any Subsidiary of the Company
shall not be considered outstanding for purposes of calculating any Person's
percentage ownership of the outstanding Common Stock of the Company.
(b) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own," any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(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) pursuant to
any agreement, arrangement or understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights, 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 or on behalf
of such Person or any of such Person's Affiliates or Associates pursuant to, and
in accordance with the applicable rules and regulations promulgated under the
Exchange Act, until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote 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 to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable by such Person on Schedule 13D or Schedule 13G
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 Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
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writing) for the purpose of acquiring, holding, voting (except as described in
the proviso to clause (B) of subparagraph (ii) of this paragraph (d)) or
disposing of any securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the Beneficial Owner
of, or to Beneficially Own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "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.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Atlanta, Georgia time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., Atlanta, Georgia time, on the next
succeeding Business Day.
(g) "Common Stock," when used with reference to the Company, shall
mean the common stock, par value $.01 per share, of the Company and, when used
with reference to any Person other than the Company, shall mean the capital
stock or other equity interests with the greatest per share or per unit voting
power of such other Person or, if such other Person is a Subsidiary of or is
controlled by another Person, the Person or Persons which ultimately controls
such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii).
(i) "Continuing Director" shall mean:
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(i) any member of the Board of Directors of the Company, while such
Person is a member of the Board, who was a member of the Board immediately prior
to the date of this Agreement, and who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, or
(ii) any member of the Board of Directors, while such Person is a
member of the Board, who becomes a member of the Board subsequent to the date of
this Agreement and who is not an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, if such Person is recommended, nominated or
approved for election on the Board by a majority of the Continuing Directors
then on the Board.
(j) "Current Market Price" shall have the meaning set forth in Section
11(d).
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(l) "Distribution Date" shall have the meaning set forth in Section
3(a).
(m) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b).
(n) "Exchange Act" shall have the meaning set forth in Section 1(c).
(o) "Exempt Person" shall mean the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed, established or holding
Common Stock for or pursuant to the terms of any such plan.
(p) "Expiration Date" shall have the meaning set forth in Section
7(a).
(q) "Final Expiration Date" shall have the meaning set forth in
Section 7(a).
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(r) "NYSE" shall have the meaning set forth in Section 9(b).
(s) "Permitted Holder" shall mean any Person who would otherwise
become an Acquiring Person solely by virtue of a reduction in the number of
outstanding shares of Common Stock; provided, however, that such Person shall
not be a Permitted Holder if, subsequent to such reduction, such Person shall
become the Beneficial Owner of any additional shares of Common Stock.
(t) "Person" shall mean any individual, firm, corporation, partnership
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(u) "Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, par value $.01 per share, of the Company, having
the rights, preferences and limitations set forth in the Articles of Amendment
attached to this Agreement as Exhibit A, and, to the extent there are not a
sufficient number of shares of Series B Junior Participating Preferred Stock
authorized to permit the full exercise of the then outstanding Rights, any other
series of preferred stock of the Company designated for such purpose by the
Board of Directors of the Company containing terms substantially similar to the
terms of the Series B Junior Participating Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in Section
13(b).
(w) "Purchase Price" shall have the meaning set forth in Section 4(a).
(x) "Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Agreement.
(y) "Redemption Price" shall have the meaning set forth in Section
23(a).
(z) "Right Certificate" shall have the meaning set forth in Section
3(a).
(aa) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii).
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(bb) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii).
(cc) "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a).
(dd) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(ee) "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such;
provided, however, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a), then no Stock Acquisition Date shall
be deemed to have occurred.
(ff) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(gg) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary 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.
(hh) "Summary of Rights" shall have the meaning set forth in Section
3(b).
(ii) "Trading Day" shall have the meaning set forth in Section 11(d).
(jj) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
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the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3, shall prior to the Distribution Date also be
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the holders of the Common Stock) in accordance with the terms and conditions of
this Agreement, 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. If the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as
the Company shall determine.
Section 3. Issuance of Right Certificates.
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(a) Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) 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 the outstanding Common Stock (irrespective of
whether any shares are actually purchased pursuant to such offer) (the earlier
of such dates described in clauses (i) and (ii) being referred to herein as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c)) by the certificates for the Common Stock registered
in the names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) each Right (and the right to receive separate Right
Certificates) will be transferable only in connection with the transfer of a
share (subject to adjustment as hereinafter provided) of Common Stock. As soon
as practicable after the Distribution Date, the Company will prepare and
execute, and the Rights Agent will send, by first class, insured, postage
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prepaid mail, 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 Right Certificate in
substantially the form of Exhibit B hereto ("Right Certificate") evidencing one
Right for each share of Common Stock so held, subject to adjustment as provided
herein. As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates and will be transferrable separately from the
Common Stock.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of 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.
(c) With respect to certificates for Common Stock outstanding as of
the Record Date, until the Distribution Date (or, if earlier, the Expiration
Date or the Final Expiration Date), the Rights will be evidenced by certificates
for Common Stock registered in the names of the holders thereof together with a
copy of the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the surrender for transfer
of the Rights associated with the Common Stock represented thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
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the Record Date, but prior to the earliest of the Distribution Date, the
Expiration Date or the Final Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Weeks
Corporation and , as Rights Agent, dated as
of , 1998 (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 Weeks
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Weeks Corporation
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt by it of a written request
therefor. Under certain circumstances as provided in the Rights
Agreement, Rights issued to or beneficially owned by Acquiring Persons
or their Associates or Affiliates (as such terms are defined in the
Rights Agreement) or any subsequent holder of such Rights will become
null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Expiration Date, the Final Expiration Date or the
Distribution Date, be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented thereby. If
the Company purchases or acquires any Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with shares of Common Stock which are no
longer outstanding.
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Section 4. Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or trading system on which the
Rights may from time to time be listed or traded, or to conform to usage.
Subject to the provisions of Sections 11 and 22, the Right Certificates whenever
distributed shall be dated the Record Date and on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price per one one-
thousandth of a share of Preferred Stock set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided therein and in this Rights Agreement.
(b) Notwithstanding any other provision of this Rights Agreement, any
Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a nominee of any
of the foregoing) the following legend:
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The Beneficial Owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate (as
such terms are defined in the Rights Agreement) of an Acquiring Person
or a subsequent holder of such Right Certificate beneficially owned by
such Persons. Accordingly, under circumstances specified in the
Rights Agreement, this Right Certificate and the Rights represented
hereby will become null and void.
Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
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(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman, Vice Chairman, Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned (which
countersignature may be a facsimile) by the Rights Agent and shall not be valid
for any purpose unless so countersigned. If any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, 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 Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
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execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the date of each
of the Right Certificates, and the certificate numbers for each of the Right
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates
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(a) Subject to the provisions of Section 14, 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 Expiration Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender the
Right Certificate at the principal office of the Rights Agent with the form of
assignment on the reverse side thereof (or enclose with such Right Certificate a
written instrument of transfer in a 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 Right
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Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon
the Rights Agent shall countersign (which countersignature may be a facsimile)
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including without limitation, the restrictions on
exercisability set forth in Section 9(b), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights Agent
at the principal office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to each Right
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exercised, subject to adjustment as hereinafter provided, at or prior to the
earlier of (i) the Close of Business on June 30, 2008 ("Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 (such
date being herein referred to as the "Expiration Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24.
(b) The Purchase Price shall initially be $125.00 for each one one-
thousandth of a share of Preferred Stock issued pursuant to the exercise of a
Right. The Purchase Price and the number of one one-thousandths of a share of
Preferred Stock or other securities or consideration to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13. The Purchase Price shall be payable in lawful money of
the United States of America, in accordance with Section 7(c).
(c) Except as provided in Section 7(d), upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the
Purchase Price or so much thereof as is necessary for the shares or other
securities or assets to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company or the Rights Agent, the Rights Agent, subject to Section
20(j), shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of shares of Preferred
Stock so elected to be purchased and the Company will comply and hereby
authorizes and directs such transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of shares of
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Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate; provided, however, that in the case of a purchase of
securities, other than Preferred Stock, pursuant to Section 13, the Rights Agent
shall promptly take the appropriate actions corresponding to the foregoing
clauses (i) through (iv). If the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a), the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(d) If the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14.
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(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(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 contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
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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 Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled
Right Certificates to the Company, or shall, at the written request of the
-17-
Company, destroy or cause to be destroyed such canceled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available, out of and to the extent
of its authorized and unissued shares of Preferred Stock not reserved for
another purpose (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock or other securities) or shares
held in its treasury, the number of shares of Preferred Stock (and, following
the occurrence of a Triggering Event, shares of Common Stock or other
securities) that, as provided in this Agreement, including Section 11(a)(iii),
will be sufficient to permit the exercise in full of all outstanding Rights;
provided, however, that the Company shall not be required to reserve and keep
available shares of Common Stock or other securities sufficient to permit the
exercise in full of all outstanding Rights pursuant to the adjustments set forth
in Section 11(a)(ii), Section 11(a)(iii) or Section 13 unless, and only to the
extent that, the Rights become exercisable pursuant to Section 7(a) following
such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, Common
Stock or other securities) issued or reserved for issuance upon exercise thereof
to be listed by the New York Stock Exchange (the "NYSE") or any other national
securities exchange upon notice of issuance upon such exercise and (ii) if then
necessary to permit the offer and issuance of such shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock or other
securities), register and qualify such shares of Preferred Stock (and, following
-18-
the occurrence of a Triggering Event, Common Stock or other securities) under
the Securities Act and any applicable state securities or "blue sky" laws (to
the extent exemptions therefrom are not available), cause such registration
statement and qualifications to become effective as soon as practicable after
such filing and keep such registration and qualifications effective until the
earlier of the Expiration Date or the Final Expiration Date of the Rights. The
Company may temporarily suspend, for a period of time not to exceed ninety days,
the exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon 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.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Preferred Stock (or shares of Common Stock or other securities,
-19-
as the case may be) upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for Preferred Stock (or shares of Common
Stock or other securities, as the case may be) upon exercise of Rights in a name
other than that of, the registered holder of the Right Certificate, and the
Company shall not be required to issue or deliver a Right Certificate or
certificate for Preferred Stock (or shares of Common Stock or other securities,
as the case may be) to a person other than such registered holder until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
---------------------------
certificate for shares of Preferred Stock (or shares of Common Stock 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 Preferred
Stock (or Common Stock or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock 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,
the next succeeding Business Day on which the Preferred Stock (or Common Stock
or other securities) transfer books of the Company are open.
-20-
Section 11. Adjustments to Number and Kind of Shares; Number of Rights or
-------------------------------------------------------------
Purchase Price. The number and kind of shares subject to purchase upon the
--------------
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the Record Date (A)
declare or pay any dividend on Preferred Stock payable in shares of Preferred
Stock, (B) subdivide or split the outstanding shares of Preferred Stock into a
greater number of shares, (C) combine or consolidate the outstanding shares of
Preferred Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Preferred Stock or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in Section 7(e) or this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Preferred Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of Preferred Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock transfer
books of the Company were open, the holder thereof 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 such Right be less than the
per share par value of the shares of capital stock of the Company issuable upon
-21-
exercise of the Right. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person shall become an Acquiring Person (a "Section
11(a)(ii) Event"), then subject to Section 23(a), and except as otherwise
provided in this Section 11, each holder of a Right (except as provided below
and in Section 7(e)) shall thereafter have a right to receive for each Right,
upon exercise thereof in accordance with the terms of this Agreement and payment
of a price equal to the then current Purchase Price multiplied by the number of
one one-thousandths of a share of Preferred Stock for which a Right was
theretofore exercisable, in lieu of the number of one one-thousandths of a share
of Preferred Stock for which a Right was theretofore exercisable, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one one-
thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (such product, following such first occurrence, shall be
referred to as the "Purchase Price" with respect to each Right for all purposes
of this Agreement) by 50% of the Current Market Price per share of Common Stock
on the date of such first occurrence (such number of shares is herein called the
"Adjustment Shares"); provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence; and
provided, further, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then only
the provisions of Section 13 hereof shall apply and no adjustment shall be made
-22-
pursuant to this Section 11(a)(ii). Notwithstanding the foregoing, upon the
occurrence of a Section 11(a)(ii) Event, any Rights that are or were at any
time, on or after the earlier of the Stock Acquisition Date or the Distribution
Date, Beneficially Owned by the Acquiring Person or any Associate or Affiliate
of the Acquiring Person shall become null and void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement.
(iii) If the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date hereof to
which the Company is a party, the Company shall: (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
and (B) with respect to each Right (subject to Section 7(e)), upon the exercise
of such Right and payment of the applicable Purchase Price, make adequate
provision to substitute for the Adjustment Shares (1) cash, (2) a reduction in
the Purchase Price, (3) equity securities of the Company (including, without
limitation, shares, or units of shares, of special or preferred stock of the
Company which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the Common Stock, are deemed in good faith
by the Board of Directors of the Company to have substantially the same value as
shares of 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 which, when added to the value of the shares of Common Stock actually
-23-
issued upon exercise of such Right, shall have an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price), where
such aggregate value has been determined in good faith by the Board of Directors
of the Company based upon the advice of a nationally recognized independent
investment banking firm selected in good faith by the Board of Directors of the
Company; provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days following
the first occurrence of a Section 11(a)(ii) Event (the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the excess of
the Current Value over the Purchase Price. If the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the 30 day period set forth above may be extended to the
extent necessary, but not more than 120 days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such 30 day period, as it may be
extended, is herein called the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the first and/or
second sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) and the last sentence of Section 11(a)(ii), that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
-24-
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. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "Common Stock Equivalent" shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
(b) If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock, 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 Current Market Price per
share of Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of Preferred
-25-
Stock outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for the
account of the Company 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 if such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) If the Company shall fix a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
-26-
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share of Preferred
Stock. Such adjustments shall be made successively whenever such a record date
is fixed; and if such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price" per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of the Common Stock for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date, and for
purpose of computations made pursuant to Section 11(a)(iii), the "Current Market
Price" per share of the Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of the Common Stock for the ten
consecutive Trading Days immediately following such date; provided, however,
that if the Current Market Price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of
(i) any dividend or distribution on the Common Stock (other than a regular
quarterly cash dividend and other than the Rights), or (ii) any subdivision,
combination or reclassification of the Common Stock, and prior to the expiration
of the requisite 30 Trading Day or ten Trading Day period, as set forth above,
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
-27-
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE or, if the shares of
Common Stock are not listed or admitted to trading on the NYSE, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted sale price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System or
such other system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the fair value
of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall mean a day
on which the principal national securities exchange or national market system on
which the shares of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange or national market
system, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company whose
-28-
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share of Preferred Stock shall be determined in the same
manner as set forth for the Common Stock in Section 11(d)(i) hereof (other than
the last sentence thereof). If the Current Market Price per share of one one-
thousandth of a share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in Section 11(d)(i) hereof, the "Current Market
Price" per share of Preferred Stock shall be conclusively deemed to be an amount
equal to 100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current Market Price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Company, acting by resolution of its Board of
Directors (which resolution shall be effective only if it is approved by a
majority of the Continuing Directors), whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "Current Market Price" of one
one-thousandth of a share of Preferred Stock shall be equal to the "Current
Market Price" of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
-29-
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other security or one millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Preferred Stock contained in Section
11(a), (b), (c), (e), (g), (h), (i), (j), (k) (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
-30-
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price or any adjustment to the number of one one-thousandths of
a share of Preferred Stock for which a Right may be exercised, to adjust the
number of Rights, in lieu of 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 the adjustment in the number of Rights shall be
exercisable for the number of one one-thousandths of a share of Preferred Stock
for which such Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
ten days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
-31-
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandths of a
share of Preferred Stock and the number of one thousandths of a share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the number of one one-
thousandths of a share of Preferred Stock issuable upon exercise of the Rights,
the Company shall take any corporate action, including using its reasonable best
efforts to obtain any required shareholder approvals, which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable one one-thousandths of a share of Preferred
Stock at such adjusted Purchase Price.
-32-
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the Current Market Price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Stock Acquisition Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
-33-
11(o)), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction or a
series of related transactions not in the ordinary course of the Company's
business, assets, cash flow or earning power aggregating more than 50% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with Section
11(o)), if (x) at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(o) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 23 or Section 27, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is made
-----------------------------
as provided in Sections 11 and 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 Common Stock or Preferred Stock a copy of such
-34-
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any certificate prepared by the Company pursuant to Sections 11 and
13 and on any adjustment therein contained. Any adjustment to be made pursuant
to Sections 11 and 13 of this Agreement shall be effective as of the date of the
event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power.
-----
(a) If at any time on or after the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person or Persons (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), and the Company shall not be the surviving
or continuing corporation of such consolidation or merger, (y) any Person or
Persons (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), shall 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 converted
into or exchanged for stock or other securities of any other Person or of the
Company or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with Section
11(o)), in one transaction or a series of related transactions not in the
ordinary course of the Company's business, assets, cash flow, or earning power
-35-
aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the first occurrence
of any such event, proper provision shall be made so that (i) each holder of
record of a Right, except as provided in Section 7(e), shall thereafter have the
right to receive, upon the exercise thereof and payment of the Purchase Price in
accordance with the terms of this Agreement, such number of shares of validly
issued, fully paid and nonassessable and freely tradeable Common Stock of the
Principal Party (as defined herein), free and clear of any and all liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event hereof has occurred prior to the first
occurrence of a Section 13 Event, multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such first occurrence of a Section
11(a)(ii) Event) and (2) dividing that product (such product, following the
first occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined as provided in Section 11(d) with respect to
the Common Stock) per share of the common stock of such Principal Party on the
date of consummation of such Section 13 Event (or the fair market value on such
date of other securities or property of the Principal Party, as provided for
herein); provided that the Purchase Price and the number of shares of common
stock of such Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in this Agreement to reflect any events occurring
-36-
after the date of the first occurrence of a Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" for all purposes of this Agreement
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall only apply to such
Principal Party following the first occurrence of a Section 13 Event; and (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 Section 9) in connection with the consummation of any such transaction 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; provided, however,
that, upon the subsequent occurrence of any merger, consolidation, sale of all
or substantially all assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a): (A) the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
-37-
such merger or consolidation, or, if there is more than one such issuer, the
issuer 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 said merger or consolidation, or, if there is
more than one such Person, 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 it survives); and
(ii) in the case of any transaction described in clause (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 described in the foregoing (b)(i)
or (b)(ii), 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 Stock of
which are and have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
-38-
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the requirements of Sections 13(a) and (b)
shall promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and further providing
that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the date of expiration of
the Rights, and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and, if the Common Stock of the
Principal Party shall not be listed on a national securities exchange, to cause
-39-
the Rights and the securities purchasable upon exercise of the Rights to be
listed by a national securities exchange or admitted for trading on the NYSE;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
If any of the transactions described in Section 13(a) shall occur at any time
after the occurrence of a transaction described in Section 11(a)(ii), the Rights
which have not theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a). The provisions of this Section 13 shall
similarly apply to all successive mergers, consolidations, sales, transfers or
other Section 13 Events.
(d) Furthermore, if the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Principal Party
at less than the then Current Market Price per share (determined pursuant to
Section 11(d)(i)) or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then Current Market Price (other
than to holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
-40-
the Common Stock of such Principal Party pursuant to the provisions of this
Section 13; then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the holders of record of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a whole Right shall be determined in the same manner as
the Current Market Price of a share of Common Stock shall be determined pursuant
to Section 11(d)(i).
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one one-
thousandths of a share of Preferred Stock) upon exercise of the Rights, or to
exchange the Rights pursuant to Section 24 of this Agreement for fractions of
Common Stock. Fractions of shares of Preferred Stock in integral multiples of
one one-thousandth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
-41-
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the shares of Preferred Stock. With respect to fractional
shares of Preferred Stock that are not integral multiples of one one-thousandth
of a share of Preferred Stock, if the Company does not issue fractional shares
or depositary receipts in lieu thereof, the Company shall pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-thousandth of a share of Preferred Stock. For purposes
of this Section 14(b), the current market value of one one-thousandth of a share
of Preferred Stock shall be the Current Market Price of one one-thousandth of a
share of Preferred Stock (as determined pursuant to Section 11(d)(ii)).
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one share of Common Stock. For the purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the Current Market Price of a share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof).
(d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares (other
than fractions which are integral multiples of one one-thousandths of a share of
Preferred Stock) upon exercise of a Right.
-42-
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of record of the Common
Stock); and any holder of record of any Right 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 Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and, accordingly, that they will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to,
this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
--------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be evidenced
by a Right Certificate and will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
-43-
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of the Common Stock) 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 a beneficial interest in 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; provided,
however, that the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder
-------------------------------------------------
of a Right or a Right Certificate, as such, shall be entitled to vote, receive
dividends in respect of or be deemed for any purpose to be the holder of
Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
-44-
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as set forth in Section 25), or to receive dividends or
subscription rights in respect of any such stock or securities, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions of this Agreement.
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
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 negligence, bad faith or willful
misconduct on the part of the Rights Agent for anything done or omitted to be
done by the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against any claim
of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right
Certificate, certificate for Common Stock or 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, guaranteed, verified or acknowledged, by the proper Person or
Persons.
-45-
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. If at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
(b) If at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver such Right Certificates so countersigned; and if at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
-46-
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right 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 or its own in-house counsel), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter 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, Vice Chairman,
Chief Executive Officer, President, any Vice President, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
-47-
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 Agreement or the execution and delivery of this
Agreement (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
or any adjustment required under the provisions hereof or responsible for the
manner, method or amount of any such change or adjustment or the ascertaining of
the existence of facts that would require any such change in the exercisability
of the Rights or any change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any such change
or adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or other securities to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of Common Stock or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman, Vice Chairman, the Chief Executive Officer, the President,
-48-
any Vice President, the Secretary or any Assistant Secretary 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 or for
any delay in acting while waiting for those instructions.
(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 freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other 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 Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
-49-
further action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock and the Preferred Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or any 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, and to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, 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 Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the incumbent Rights Agent or the holder of record of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or any State thereof, in good standing, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
-50-
subject to supervision or examination by federal or state authority and which
has, or together with its parent entity has, at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million. 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 the
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Expiration Date, the Purchase Price per share and the number or kind of
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
-51-
have occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $.001 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price");
provided, however, that if the Board of Directors of the Company authorizes
redemption of the Rights in either of the circumstances set forth in clauses (i)
and (ii) below, then there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such Continuing
Directors: (i) such authorization occurs on or after the time a Person becomes
an Acquiring Person, or (ii) such authorization occurs on or within one year
after the date of a change (resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a majority of the Board of Directors of the
Company has determined in good faith) that such Person (or any of its Affiliates
or Associates) intends to take, or may consider taking, any action which would
result in such person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's right
of redemption hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Current Market
Price, as defined in Section 11(d)(i), of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors of the Company.
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(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within ten days
after such action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent of the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The failure to give notice
required by this Section 23 or any defect therein shall not affect the legality
or validity of any redemption hereunder. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24, and other than in connection with the purchase of Common Stock
prior to the Distribution Date.
Section 24. Exchange.
--------
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the
-53-
provisions of Section 7(e)) for Common Stock or Common Stock Equivalents at an
exchange ratio of one share of Common Stock or Common Stock Equivalent per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of shares of Common Stock representing 50% or more of the shares of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders of such Rights
at the last addresses of the holders as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the shares of
Common Stock or Common Stock Equivalents for Rights will be effected and, in the
event of any partial exchange, the number and kind of Rights which will be
exchanged. The failure to give notice required by this Section 24 or any defect
therein shall not
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affect the legality or validity of any exchange hereunder. Any partial exchange
shall be effected pro rata based on the number of Rights being exchanged (other
than Rights which have become void pursuant to the provisions of Section 7(e))
held by each holder of such Rights.
(c) If there shall not be sufficient shares of Common Stock issued but
not outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company may, at its option,
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
Section 25. Notice of Proposed Actions.
--------------------------
(a) If the Company, after the Stock Acquisition Date, shall propose to
(i) effect any of the transactions referred to in Section 11(a)(i) or to pay any
dividend to the holders of record of its Preferred Stock payable in stock of any
class or to make any other distribution to the holders of record of its
Preferred Stock (other than a quarterly cash dividend), (ii) offer to the
holders of record of its Preferred Stock options, warrants, or other rights to
subscribe for or to purchase shares of Preferred Stock (including any security
convertible into or exchangeable for Preferred Stock) or shares of stock of any
class or any other securities, options, warrants, convertible or exchangeable
securities or other rights, (iii) effect any reclassification of its Preferred
Stock or any recapitalization or reorganization of the Company, (iv) 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 transaction or a series of related transactions not in the
ordinary course of the Company's business, 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) effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
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holder of record of Rights, in accordance with Section 26, notice of such
proposed action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i), or such dividend or distribution,
or the date on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 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 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) If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Agreement are proposed, then, in any such case, the Company
shall give to each holder of Rights, in accordance with Section 26, notice of
the proposal of such transaction at least 10 days prior to consummating such
transaction, which notice shall specify the proposed event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or Section 13, as the
case may be, and, upon consummating such transaction, shall similarly give
notice thereof to each holder of Rights.
(c) If any Section 11(a)(ii) Event shall occur, then all references in
this Section 25 to Preferred Stock shall be deemed thereafter to refer to the
Common Stock or other securities for which the Rights are then exercisable.
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Section 26. Notices. Except as provided in Section 21, notices or demands
-------
authorized by this Agreement to be given or made by the Rights Agent or by the
holder of record of any Right Certificate or Right 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:
Weeks Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of record of any
Right 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:
--------------------------------
--------------------------------
--------------------------------
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right 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
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it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Prior to the Stock Acquisition
--------------------------
Date and except as provided in the third 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 or the Common Stock. From and
after the Stock Acquisition Date, the Company may and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or (iii) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
provided, that no such supplement or amendment shall adversely affect the
interests of the holders of Rights (other than any interest of an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). Notwithstanding
anything contained in this Agreement to the contrary, this Agreement may be
supplemented or amended only with the approval of a majority of the then
Continuing Directors in the following circumstances described in clauses (i) and
(ii): (i) during the one-year period after any date of a change (resulting from
a proxy or consent solicitation) in a majority of the Board of Directors of the
Company in office at the commencement of such solicitation, or (ii) on or after
the time that a Person becomes an Acquiring Person. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the
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proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment.
Section 28. Determinations and Actions by the Board. For all purposes
---------------------------------------
of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence 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 (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
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
(including a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board or
the Continuing Directors to any liability to the holders of the Rights.
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Section 29. Successors. All of the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of record of
the Right Certificates (and, prior to the Distribution Date, the Common Stock).
Section 31. Governing Law. This Agreement, each Right and each Right
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
------------
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
--------------------
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
Section 34. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, illegal, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
Attest: WEEKS CORPORATION
By: By:
------------------------ --------------------------------
Name: Name:
Title: Title:
Attest:
By: By:
------------------------ --------------------------------
Name: Name:
Title: Title:
[exhibits intentionally omitted]
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