EXHIBIT 4.1
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RIGHTS AGREEMENT
by and between
WESTPOINT ▇▇▇▇▇▇▇ INC.
and
SUNTRUST BANK,
as Rights Agent
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Dated as of
May 9, 2001
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TABLE OF CONTENTS
Section Page
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Section 1. Certain Definitions...................................................................1
Section 2. Appointment of Rights Agent...........................................................7
Section 3. Issuance of Right Certificates........................................................8
Section 4. Form of Right Certificates...........................................................10
Section 5. Countersignature and Registration....................................................10
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.........................................................................10
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights;
Invalidation of Certain Rights.......................................................11
Section 8. Cancellation and Destruction of Right Certificates...................................14
Section 9. Reservation and Availability of Shares of Common Stock...............................14
Section 10. Common Stock Record Date.............................................................15
Section 11. Adjustment of Exercise Price or Number of Shares.....................................15
Section 12. Certification of Adjusted Exercise Price or Number of Shares.........................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.................22
Section 14. Fractional Rights and Fractional Shares..............................................25
Section 15. Rights of Action.....................................................................26
Section 16. Agreement of Right Holders...........................................................26
Section 17. Right Certificate Holder Not Deemed a Stockholder....................................27
Section 18. Concerning the Rights Agent..........................................................27
Section 19. Merger or Consolidation of, or Change in Name of, the Rights Agent...................28
Section 20. Duties of Rights Agent...............................................................29
Section 21. Change of Rights Agent...............................................................31
Section 22. Issuance of New Right Certificates...................................................31
Section 23. Redemption...........................................................................32
Section 24. Notice of Proposed Actions...........................................................33
Section 25. Notices..............................................................................34
Section 26. Supplements and Amendments...........................................................34
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TABLE OF CONTENTS
(cont'd)
Section Page
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Section 27. Exchange.............................................................................35
Section 28. Successors...........................................................................36
Section 29. Benefits of this Agreement...........................................................36
Section 30. Delaware Contract....................................................................37
Section 31. Counterparts.........................................................................37
Section 32. Descriptive Headings.................................................................37
Section 33. Severability.........................................................................37
Section 34. Determinations and Actions by the Board of Directors.................................37
Exhibits
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Exhibit A - Summary of Rights
Exhibit B - Form of Right Certificate
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RIGHTS AGREEMENT
Rights Agreement (this "Agreement"), dated as of May 9, 2001,
by and between WestPoint ▇▇▇▇▇▇▇ Inc., a Delaware corporation (the
"Corporation"), and SunTrust Bank, a corporation organized under the laws of the
State of Georgia (the "Rights Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, on May 9, 2001, the Board of Directors of the
Corporation authorized the issuance of, and declared, a dividend payable in one
right (a "Right") for each share of common stock, $0.01 par value per share
("Common Stock"), of the Corporation outstanding as of the close of business on
May 21, 2001 (the "Record Date"), each such Right representing the right to
purchase one share of Common Stock, upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, on such date, the Board of Directors of the
Corporation further authorized the issuance of one Right (subject to adjustment)
with respect to each share of Common Stock that may be issued between the Record
Date and the earliest to occur of the Distribution Date, the Expiration Date or
the Final Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to shares of Common Stock that
shall become outstanding after the Distribution Date and prior to the Expiration
Date in accordance with Section 22 hereof.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties to this Agreement hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings provided by this Section
1, and any capitalized term defined in this Section 1 and used in the following
definitions having the meaning provided by this Section 1:
(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
Voting Stock then outstanding; provided, however, that an
Acquiring Person shall not include: (i) an Exempt Person; (ii)
any Person who or which, together with all Affiliates and
Associates of such Person, would be an Acquiring Person solely
by reason of (A) being the Beneficial Owner of shares of
Voting Stock, the Beneficial Ownership of which was acquired
by such Person (together with all Affiliates and Associates of
such Person) pursuant to any action or transaction or series
of related actions or transactions approved by the Board of
Directors of the Corporation before such Person (together with
all Affiliates and Associates of such Person) otherwise became
an Acquiring Person or (B) a reduction in the number of issued
and outstanding shares of Voting Stock pursuant to a
transaction or a series of related transactions approved by
the Board of Directors of the Corporation; provided, further,
that in the event a Person described in this clause (ii) does
not become an Acquiring Person by reason of subclause (A) or
(B) of this clause (ii), such Person nonetheless shall become
an Acquiring Person in the event such Person (together with
all Affiliates and Associates of such Person) thereafter
acquires Beneficial Ownership of an additional 1% or more of
the Voting Stock, unless the acquisition of such additional
Voting Stock would not result in such Person becoming an
Acquiring Person by reason of subclause (A) or (B) of this
clause (ii); or (iii) any Person who, as of May 9, 2001,
together with all Affiliates and Associates of such Person,
was the Beneficial Owner of 15% or more of the Voting Stock
outstanding as of such date; provided, further, that any
Person described in this clause (iii) shall become an
Acquiring Person if (A) such Person, together with all
Affiliates and Associates of such Person, after May 9, 2001,
acquires Beneficial Ownership of an additional 1% or more of
the Voting Stock or (B) such Person, together with all
Affiliates and Associates of such Person, after May 9, 2001,
reduces its Beneficial Ownership of the Voting Stock to less
than 15% of the outstanding Voting Stock and thereafter
becomes the Beneficial Owner of 15% or more of the outstanding
Voting Stock, unless in the case of subclause (A) or (B) of
this clause (iii) such acquisition of Voting Stock was
pursuant to a transaction described in subclauses (ii)(A) or
(ii)(B) above; or (iv) any Lender (as defined below) or group
of Lenders, together with all Affiliates and Associates of any
such Lender or group of Lenders, whose Beneficial Ownership of
15% or more of the Voting Stock then outstanding results
solely by reason of (A) the Borrower's (as defined below)
pledge of Common Stock (the "Collateral") to such Lender or
group of Lenders to secure the Borrower's obligations under
that certain Fourth Amended and Restated Loan Agreement, dated
as of May 18, 1999 (as amended, supplemented or modified from
time to time, the "Credit Agreement"), by and among Bank of
America, N.A., Bank One, N.A., The Bank of New York, The Bank
of Nova Scotia and First Union National Bank and their
respective successors and each other lender which may become a
party thereto (each a "Lender", and collectively the
"Lenders"), WPS Investors, L.P. (the "Borrower") and Bank of
America, N.A., as agent for the Lenders, or (B) the
acquisition of Beneficial Ownership or taking title to or
possession of all or any portion of the Collateral as a result
of the Borrower's default under the Credit Agreement, in each
case pursuant to the terms of the Credit Agreement or any
collateral agreement, document or instrument pursuant to which
the Collateral has been pledged; provided, further, that in
the event that a Lender or group of Lenders described in this
clause (iv) does not become an Acquiring Person by reason of
subclause (A) or (B) of this clause (iv) or by reason of
subclause (A) or (B) of clause (ii) above, such Lender or
group of Lenders nonetheless shall become an Acquiring Person
in the event such Lender or group
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of Lenders (together with all Affiliates and Associates of
each such Lender or group of Lenders) thereafter acquires
Beneficial Ownership of an additional 1% or more of the Voting
Stock, unless the acquisition of such additional Voting Stock
would not result in such Lender or group of Lenders becoming
an Acquiring Person by reason of subclause (A) or (B) of
clause (ii) above. Notwithstanding the foregoing, if the Board
of Directors of the Corporation determines in good faith that
a Person who would otherwise be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this paragraph
(a) has become such inadvertently, and such Person divests as
promptly as practicable (as determined by the Board of
Directors of the Corporation) a sufficient number of shares of
Common Stock so that such Person would no longer be an
"Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not
be deemed an "Acquiring Person" for any purposes of this
Agreement.
(b) "Affiliate" shall have the meaning ascribed to
such term in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this
Agreement.
(c) "Associate" of a Person shall mean (i) with
respect to a corporation, any officer or director thereof or
any Associate of any Subsidiary thereof, or any Beneficial
Owner of 10% or more of any class of equity security thereof,
(ii) with respect to an association, any officer or director
thereof or any Associate of a Subsidiary thereof, (iii) with
respect to a partnership, any general partner thereof or any
limited partner thereof who is, directly or indirectly, the
Beneficial Owner of a 10% or greater ownership interest
therein, and any Associate of any Subsidiary thereof, (iv)
with respect to a limited liability company, any manager or
managing member thereof and any Beneficial Owner of 10% or
more or any class of membership interest therein or other
equity security thereof, and any Associate of any Subsidiary
thereof, (v) with respect to a business trust, any officer or
trustee thereof or any Associate of any Subsidiary thereof,
(vi) with respect to any other trust or an estate, any
trustee, executor or similar fiduciary and any Person who has
a 15% or greater interest as a beneficiary in the income from
or principal of such trust or estate, (vii) with respect to a
natural person, the parents and children thereof and any
spouse or relative thereof, or any relative of such spouse,
who has the same home as such person, and (viii) any Affiliate
of such Person.
(d) A person shall be deemed the "Beneficial Owner"
of, or to "Beneficially Own", any securities (and correlative
terms shall have correlative meanings):
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(i) which such Person or any of such
Person's Affiliates or Associates beneficially owns,
directly or indirectly, for purposes of Section 13(d)
of the Exchange Act and Regulations 13D and 13G
thereunder, in each case as in effect on the date of
this Agreement; or
(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the right
to acquire (whether such right is exercisable
immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any
agreement, arrangement or understanding (whether or
not in writing), or upon the exercise of conversion
rights, exchange rights, other rights (other than the
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own",
securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's
Affiliates or Associates until such tendered
securities are accepted for purchase or exchange or
(B) the right to vote, alone or in concert with
others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own", any
securities if the agreement, arrangement or
understanding to vote such security (1) arises solely
from a revocable proxy or consent given in response
to a proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not at
the time reportable by such Person on a Schedule 13D
report under the Exchange Act (or any comparable or
successor report), other than by reference to a proxy
or consent solicitation being conducted by such
Person; 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 writing) for the
purpose of acquiring, holding, voting (except as
described in clause (B) of subparagraph (ii) of this
paragraph (d)) or disposing of any securities of the
Corporation; provided, however, that for purposes of
determining Beneficial Ownership of securities under
this Agreement, officers and directors of the
Corporation solely by reason of their status as such
shall not constitute a group (notwithstanding that
they may be Associates of one another or may be
deemed to constitute a group for purposes of Section
13(d) the Exchange Act) and shall not be deemed to
own shares owned by another officer or director of
the Corporation.
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Notwithstanding anything in this paragraph (d) to the
contrary, a Person engaged in the business of underwriting
securities shall not be deemed the "Beneficial Owner" of, or
to "Beneficially Own," any securities acquired or otherwise
beneficially owned in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the
date of the sale of securities to the public pursuant to such
firm commitment underwriting.
(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 or the state in which the principal
office of the Rights Agent 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., New York City time, on such date; provided,
however, that if such date is not a Business Day, it shall
mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(g) "Common Stock" when used with reference to the
Corporation shall collectively mean the Common Stock of the
Corporation as defined in the first recital hereof and any
other common stock of the Corporation into or for which it is
changed, converted or exchanged. "Common Stock" when used with
reference to any Person other than the Corporation which shall
be organized in corporate form shall mean the capital shares
or other equity security having of all classes of capital
shares or equity securities of such corporation the greatest
aggregate voting power in the election of directors. "Common
Stock" when used with reference to any Person which shall not
be organized in corporate form shall mean units of beneficial
interest in the profits or losses of such Person or other
equity security of such Person having of all classes of equity
securities of such Person the greatest aggregate voting power
in the election of the directors, trustees, managers or other
Persons performing like governance functions for such Person.
(h) "Corporation" shall have the meaning provided at
the beginning hereof; provided, however, that "Corporation"
shall also include any successors to the Corporation as
provided by Section 28 hereof and shall mean a Principal Party
as provided by Section 13(a) and 13(b)hereof.
(i) "Distribution Date" shall have the meaning set
forth in Section 3(b) hereof.
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
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(k) "Exchange Ratio" shall have the meaning set forth
in Section 27(a) hereof.
(l) "Exempt Person" shall mean (i) the Corporation,
(ii) any Subsidiary of the Corporation, or (iii) any employee
benefit plan or employee stock plan of the Corporation or any
Subsidiary of the Corporation, or any trust or other entity
organized, appointed, established or holding Voting Stock for
or pursuant to the terms of any such plan.
(m) "Exercise Price" shall have the meaning set forth
in Section 4 hereof.
(n) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(o) "Fair Market Value" of any property shall mean
the fair market value of such property as determined in
accordance with Section 11(b) hereof.
(p) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(q) "NASDAQ" shall have the meaning set forth in
Section 11(b) hereof.
(r) "Person" shall mean any individual, company,
firm, corporation or other entity.
(s) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(t) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(u) "Right Certificate" shall have the meaning set
forth in Section 3(d) hereof.
(v) "Securities Act" shall mean the Securities Act of
1933, as amended.
(w) "Spread" shall mean the excess of (1) the Fair
Market Value of shares of Common Stock issuable upon the
exercise of a Right in accordance with Section 11(a)(ii) as a
result of a Person becoming an Acquiring Person over (2) the
Exercise Price in effect at the time of determination of the
Spread.
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(x) "Stock Acquisition Date" shall mean the first
date on which there shall be a public announcement by the
Corporation or an Acquiring Person that an Acquiring Person
has become such (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) or such earlier date as a
majority of the Board of Directors of the Corporation shall
become aware of the existence of an Acquiring Person as
confirmed by action of the Board of Directors of the
Corporation taken by the affirmative vote of a majority of the
Board of Directors of the Corporation.
(y) "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 of such corporation
or other entity or other persons performing similar functions
are beneficially owned, directly or indirectly, by such Person
or by any corporation or other entity that is otherwise
controlled by such Person.
(z) "Summary of Rights" shall have the meaning set
forth in Section 3(a) hereof.
(aa) "Trading Day" shall have the meaning set forth
in Section 11(b) hereof.
(bb) "Transfer Tax" shall mean any tax or charge,
including any documentary stamp tax, imposed or collected by
any governmental or regulatory authority in respect of any
transfer of any security, instrument or right, including the
Rights and shares of the Common Stock.
(cc) "Voting Stock" shall mean (i) the Common Stock
of the Corporation and (ii) any other shares of capital stock
of the Corporation entitled to vote generally in the election
of directors or entitled generally to vote together with the
Common Stock in respect of a merger, consolidation, sale of
all or substantially all of the Corporation's assets,
liquidation, dissolution or winding up. For purposes of this
Agreement, a stated percentage of the Voting Stock shall mean
a number of shares of the Voting Stock as shall equal in
voting power that stated percentage of the total voting power
of the then outstanding shares of Voting Stock in the election
of a majority of the Board of Directors of the Corporation or
in respect of a merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation,
dissolution or winding up.
Any determination required to be made by the Board of
Directors of the Corporation for purposes of applying the
definitions contained in this Section 1 shall be made by a
majority of the Board of Directors of the Corporation in its
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good faith judgment, which determination shall be binding on
the Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date be the holders of Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) On the Record Date (or as soon as practicable thereafter),
the Corporation or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit A (the "Summary of Rights"),
by first class mail, postage prepaid, to each record holder of the Common Stock
as of the Record Date, at the address of such holder shown on the records of the
Corporation.
(b) Until the Close of Business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
(10th) Business Day (or such later date as may be determined by action of the
Board of Directors of the Corporation 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 a tender or exchange offer upon the successful
consummation of which such Person, or any Affiliate or Associate of such Person,
would be an Acquiring Person (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights shall
be evidenced by the certificates for Common Stock (or in the case of
uncertificated shares of Common Stock, by the book-entry account that evidences
record ownership for such shares) registered in the names of the holders of
Common Stock (together with, in the case of certificates for Common Stock
outstanding as of the Record Date, the Summary of Rights) and not by separate
Right certificates and the record holders of such certificates (or such
book-entry accounts) for Common Stock shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only simultaneously
and together with the transfer of a share of Common Stock (subject to adjustment
as hereinafter provided). Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock (or the effectuation of a book-entry transfer of
shares of Common Stock) shall constitute the surrender for transfer of the Right
or Rights associated with the Common Stock evidenced thereby, whether or not
accompanied by a copy of the Summary of Rights.
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(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earliest of
the Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Corporation's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final Expiration
Date shall have impressed, printed, written or stamped thereon or otherwise
affixed thereto the following legend:
This certificate also evidences and entitles the holder hereof
to the same number of Rights (subject to adjustment) as the number of
shares of Common Stock represented by this certificate, such Rights
being on the terms provided under the Rights Agreement by and between
WestPoint ▇▇▇▇▇▇▇ Inc. and SunTrust Bank (the "Rights Agent"), dated as
of May 9, 2001, as it may be amended from time to time (the
"Agreement"), the terms of which are incorporated herein by reference
and a copy of which is on file at the principal executive offices of
WestPoint ▇▇▇▇▇▇▇ Inc. Under certain circumstances, as set forth in the
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. WestPoint ▇▇▇▇▇▇▇
Inc. shall mail to the registered holder of this certificate a copy of
the Agreement without charge within five days after receipt of a
written request therefor. As provided in Section 7(e) of the Agreement,
Rights issued to or Beneficially Owned by Acquiring Persons or their
Affiliates or Associates (as such terms are defined in the Agreement)
or any subsequent holder of such Rights shall be null and void and may
not be exercised by or transferred to any Person.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Corporation purchases or
otherwise 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 Corporation shall not be entitled to exercise
any Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder of
the Rights.
(d) As soon as practicable after the Distribution Date, the
Corporation will prepare and execute, the Rights Agent will countersign, and the
Corporation will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class mail, postage prepaid, to each record holder of
the Common Stock as of the Close of Business on the Distribution Date, as shown
by the records of the Corporation, at the address of such holder shown on such
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records, a certificate in the form provided by Section 4 hereof (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. As of and after the Distribution Date,
the Rights shall be evidenced solely by Right Certificates and may be
transferred by the transfer of the Right Certificate as permitted hereby,
separately and apart from any transfer of one or more shares of Common Stock.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares, certificate and assignment to be
printed on the reverse thereof), when, as and if issued, shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Common Stock or the Rights may from time to time be listed
or as the Corporation may deem appropriate to conform to usage or otherwise and
as are not inconsistent with the provisions of this Agreement. Subject to the
provisions of Section 22 hereof, Right Certificates evidencing Rights whenever
issued, (i) shall be dated as of the date of issuance of the Rights they
represent and (ii) subject to adjustment from time to time as provided herein,
on their face shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth thereon at the price payable upon
exercise of a Right provided by Section 7(b) hereof, as the same may from time
to time be adjusted as provided herein (the "Exercise Price").
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf of the
Corporation by its Chairman of the Board, President or any Vice President,
either manually or by facsimile signature, and have affixed thereto the
Corporation's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Corporation, either manually or by
facsimile signature. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Corporation who
shall have signed any Right Certificate shall cease to be such officer of the
Corporation before countersignature by the Rights Agent and issuance and
delivery of the certificate by the Corporation, such Right Certificate,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Corporation. Any Right
Certificate may be signed on behalf of the Corporation by any person who, on the
date of the execution of such Right Certificate, shall be a proper officer of
the Corporation 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 or one or more offices
designated as the appropriate place for surrender of Right Certificates upon
exercise or transfer, and in such other locations as may be required by law,
books for registration and transfer of the Right Certificates issued hereunder.
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Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock as the Right Certificate or Rights Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall surrender the Right Certificate
at the office of the Rights Agent designated for the surrender of Right
Certificates with the form of certificate and assignment on the reverse side
thereof duly endorsed (or enclose with such Right Certificate a written
instrument of transfer in form satisfactory to the Corporation 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 Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated therefor. Thereupon, the Rights Agent shall countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Corporation may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14
hereof, at any time after the Distribution Date and prior to the Expiration
Date, upon receipt by the Corporation 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 Corporation,
reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Corporation shall cause a new Right
Certificate of like tenor to be issued and delivered to the registered owner in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights; Invalidation of Certain Rights.
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 7(e), 23(a) and 27(b) hereof). Except as otherwise provided herein, the
11
Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the designated office
of the Rights Agent in New York, together with payment of the Exercise Price for
each Right exercised (as the same may have been adjusted as hereinafter
provided), at or prior to the Close of Business on the earlier of (i) May 9,
2011 (the "Final Expiration Date") or (ii) the date on which the Rights are
redeemed as provided in Section 23 hereof or the date on which the Rights are
exchanged as provided in Section 27 hereof (such earlier date being herein
referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $35.00 for each
share of Common Stock issued pursuant to the exercise of a Right. The Exercise
Price and the number of shares of Common Stock or other securities or property
to be acquired upon exercise of a Right shall be subject to adjustment from time
to time as provided in Sections 11 and 13 hereof. The Exercise Price shall be
payable in lawful money of the United States of America, in accordance with
paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment by certified
check, cashier's check, bank draft or money order payable to the Corporation or
the Rights Agent of the Exercise Price for the shares of Common Stock to be
purchased and an amount equal to any applicable Transfer Tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Common Stock of the Corporation one or more certificates
representing the number of shares of Common Stock to be so purchased, and the
Corporation hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b) hereof, at the election of the
Corporation, cause depositary receipts to be issued in lieu of fractional shares
of Common Stock, (iii) if the election provided for in the immediately preceding
clause (ii) has not been made, requisition from the Corporation the amount of
cash to be paid in lieu of the issuance of fractional shares in accordance with
Section 14(b) hereof, (iv) after receipt of such Common Stock certificates and,
if applicable, 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 (v) when appropriate,
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 Common Stock, pursuant to Section 13 hereof,
the Rights Agent shall promptly take the appropriate actions corresponding in
such case to that referred to in the foregoing clauses (i) through (v) of this
Section 7(c). Notwithstanding the foregoing provisions of this Section 7(c), the
Corporation may suspend the issuance of shares of Common Stock and other
securities upon exercise of a Right for a reasonable period, not in excess of 90
days, during which the Corporation seeks to register under the Securities Act,
12
and any applicable securities law of any other jurisdiction, the shares of
Common Stock or other securities to be issued pursuant to the Rights; provided,
however, that nothing contained in this Section 7(c) shall relieve the
Corporation of its obligations under Section 9(d) hereof. Upon any such
suspension, the Corporation 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.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or his assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person (or any such Associate or Affiliate) to
holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors of the Corporation has
determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of this Section 7(e), and subsequent
transferees of such Persons referred to in clause (y) and (z) above, shall be
null and void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof whose Rights would be null and void
pursuant to the provisions of this Section 7(e); no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person (or an
Affiliate or Associate of such Acquiring Person) whose Rights would be null and
void pursuant to the provisions of this Section 7(e) or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person (or an Associate or Affiliate of such Acquiring Person)
whose Rights would be void pursuant to the provisions of this Section 7(e) shall
be cancelled. The Corporation shall use all reasonable efforts to ensure that
the provisions of this Section 7(e) are complied with, but it shall have no
liability to any holder of Right Certificates or any other Person as a result of
its failure to make any determination with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
13
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the form of
election to purchase set forth on the reverse side of the Right 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 and such other information as the Corporation or the Rights
Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Corporation 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 Corporation shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Right Certificate purchased or acquired by the Corporation
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Corporation, or shall, at the written
request of the Corporation, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the Corporation.
Section 9. Reservation and Availability of Shares of Common
Stock.
(a) The Corporation covenants and agrees that from and after
the time the Rights become exercisable it will cause to be reserved and kept
available out of the authorized and unissued shares of Common Stock or out of
authorized and issued shares of Common Stock held in its treasury, such number
of shares of Common Stock as will from time to time be sufficient to permit the
exercise in full of all outstanding Rights.
(b) The Corporation shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares of Common Stock
issued or reserved for issuance in accordance with this Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers'
Automated Quotation System or any successor thereto or other comparable
quotation system.
(c) The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Corporation shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
14
the case may be, a registration statement under the Securities Act, with respect
to the shares of Common Stock purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (a) the date as of
which the Rights are no longer exercisable for Common Stock and (b) the earlier
of the Expiration Date and the Final Expiration Date. The Corporation may
temporarily suspend, for a period of time not to exceed ninety days, the
issuance of shares of Common Stock upon exercise of a Right in order to prepare
and file a registration statement under the Securities Act and permit it to
become effective. The Corporation will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
(e) The Corporation covenants and agrees that it will pay when
due and payable any and all United States federal and state Transfer Taxes which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any shares of Common Stock issued or delivered upon the exercise of
Rights. The Corporation shall not, however, be required to pay any Transfer Tax
which may be payable in respect of any transfer or delivery of a Right
Certificate to a Person other than, or the issuance or delivery of certificates
for Common Stock upon exercise of Rights in a name other than that of, the
registered holder of the Right Certificate, and the Corporation shall not be
required to issue or deliver a Right Certificate or certificate for Common Stock
to a Person other than such registered holder until any such Transfer Tax shall
have been paid (any such Transfer Tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Corporation's satisfaction that no such Transfer Tax is due.
(f) The requirements of this Section 9 shall apply to shares
of Common Stock Equivalents (as such term is hereinafter defined) or other debt
or other equity securities of the Corporation if the Corporation has elected in
accordance with Section 11(a)(iii) hereof to substitute shares of Common Stock
Equivalents or other debt or other equity securities for shares of Common Stock
that otherwise may be purchased upon the exercise of Rights.
Section 10. Common Stock Record Date. Each Person in whose
name any certificate for shares of Common Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the Common Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Corporation
15
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated as of, the next succeeding
Business Day on which the Common Stock transfer books of the Corporation are
open.
Section 11. Adjustment of Exercise Price or Number of Shares.
The Exercise Price and the number of shares of Common Stock which may be
purchased upon exercise of a Right are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Corporation shall at any
time after the date of this Agreement (A) declare or pay any
dividend on Common Stock payable in shares of Common Stock,
(B) subdivide or split the outstanding shares of Common Stock
into a greater number of shares or (C) combine or consolidate
the outstanding shares of Common Stock into a smaller number
of shares or effect a reverse split of the outstanding shares
of Common Stock, then and in each such event the number of
shares of Common Stock issuable upon the exercise of a Right
after the record date for such event (if one shall have been
established or, if not, after the date of such event) shall be
the number of shares of Common Stock issuable immediately
prior to such event multiplied by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which
is the number of shares of Common Stock outstanding
immediately after such event, and the Exercise Price to be in
effect after the record date for such event (if one shall have
been established or, if not, after the date of such event)
shall be determined by multiplying the Exercise Price in
effect immediately prior to such event by such fraction. If an
event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii).
(ii) Subject to Section 27 hereof, in the event that
any Person shall become an Acquiring Person, then, subject to
the last sentence of Section 23(a) hereof and except as
otherwise provided in this Section 11, each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter
have the right to receive upon exercise of such Right in
accordance with the terms of this Agreement and payment of the
Exercise Price, such number of shares of Common Stock as shall
equal the result obtained by (1) multiplying the then current
Exercise Price by the number of shares of Common Stock for
which a Right would, absent adjustment pursuant to this
Section 11(a)(ii), be then exercisable and dividing the
product by (2) 50% of the Fair Market Value of a share of
Common Stock (determined pursuant to Section 11(b) hereof) on
the Stock Acquisition Date in respect of such event; provided,
however, if the transaction that would otherwise give rise to
16
the foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii).
(iii) In the event that the Corporation does not have
available sufficient authorized but unissued Common Stock to
permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Corporation shall take
all such action as may be necessary to authorize and reserve
for issuance such number of additional shares of Common Stock
as may from time to time be required to be issued upon the
exercise in full of all Rights from time to time outstanding
and, if necessary, shall use its best efforts to obtain
stockholder approval thereof. In lieu of issuing shares of
Common Stock in accordance with the foregoing subparagraph
(ii), the Corporation may, if the Board of Directors of the
Corporation determines that such action is necessary or
appropriate, elect to issue or pay, upon the exercise of the
Rights, cash, property, shares of Common Stock or other debt
or equity securities of the Corporation (including, without
limitation, shares, or units of shares, of preferred stock
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 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")), or any combination thereof,
having an aggregate Fair Market Value equal to the Fair Market
Value of the shares of Common Stock which otherwise would have
been issuable pursuant to Section 11(a)(ii) hereof as of the
date the Board of Directors of the Corporation makes such
election (which Fair Market Value shall be determined as
provided by Section 11(b) hereof). Subject to Section 23
hereof, any such election by the Board of Directors of the
Corporation must be made and publicly announced within thirty
(30) days after the date on which the event described in
Section 11(a)(ii) occurs and shall be applicable with respect
to all Rights exercised after such public announcement. Notice
of such election shall promptly be given to the Rights Agent.
(b) For the purpose of this Agreement, the "Fair Market Value"
of any share of Common Stock or any other stock or any Right or other security
or any other property on any date shall be determined as provided in this
Section 11(b). In the case of a publicly traded (as such term is hereinafter
defined) stock or other security, the Fair Market Value thereof on any date
shall be deemed to be the average of the daily closing prices per share of such
stock or per unit of such other security for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to but not including such
date; provided, however, that in the event that the Fair Market Value of any
share of Common Stock is to be determined as of a date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on the Common
17
Stock payable in shares of Common Stock or securities convertible into shares of
Common Stock or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of the Common Stock,
then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Corporation to take into account such
dividend, distribution, subdivision, split, combination, consolidation, reverse
stock split or reclassification. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way (in either case, as
reported in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange), or, if
the securities are not listed or admitted to trading on the New York Stock
Exchange, as reported in the applicable transaction reporting system with
respect to securities listed on the principal national securities exchange
(which, if approved by the Board of Directors of the Corporation, may be a
securities exchange of a country other than the United States of America) on
which such security is listed or admitted to trading; or, if not listed or
admitted to trading on any such national securities exchange, the last quoted
price (or, if not so quoted, the average of the high bid and low asked prices)
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
quotation reporting system then in use in the United States of America; or, if
no bids for such security are so quoted, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Corporation. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day. For purposes of
this Section 11(b), a stock or other security shall be considered "publicly
traded" only (i) if registered under Section 12 of the Exchange Act or exempt
from such registration pursuant to Section 12(g)(2)(B), (C) or (G) of the
Exchange Act or (ii) if traded on a national securities exchange of a country
other than the United States of America approved by the Board of Directors of
the Corporation or (iii) if, in the judgment of the Board of Directors of the
Corporation, there is sufficient active trading in such stock or other security
that reported trading transactions therein fairly reflect the fair market value
thereof. If a security is not publicly traded, "Fair Market Value" shall mean
the fair value per share of stock or per other unit of such other security, as
determined by an independent investment banking firm experienced in the
valuation of securities selected in good faith by the Board of Directors of the
Corporation, or, if no such investment banking firm is, in the good faith
judgment of the Board of Directors of the Corporation, available to make such
determination, as determined in good faith by the Board of Directors of the
Corporation. In the case of property other than securities, the "Fair Market
Value" thereof shall be determined in good faith by the Board of Directors of
the Corporation based upon such appraisals or valuation reports of such
independent experts as the Board of Directors of the Corporation shall in good
faith determine to be appropriate in accordance with good business practices and
fair to the interests of the holders of Rights. Any determination made by the
Board of Directors of the Corporation as provided for by this Section 11(b)
18
shall be described in a statement filed by the Corporation with the Rights
Agent, shall be effective thereupon and only thereupon and shall be binding upon
the Rights Agent and, as provided by Section 34 hereof, all holders of Rights.
(c) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share (or having a conversion price per share, if a
security convertible into Common Stock) less than the then current per share
Fair Market Value of the Common Stock on such record date, the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current Fair Market Value
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which shall 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 Corporation, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Common Stock owned by or held for the account of the Corporation shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed and
in the event that such rights, options or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(d) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness of the Corporation or any of its Subsidiaries, cash (other than a
regular quarterly cash dividend not in excess of 150% of the previous regular
quarterly cash dividend), other assets (other than a dividend payable in shares
of Common Stock) or options, rights or warrants to subscribe for shares of the
Corporation or any Subsidiary (excluding those referred to in Section 11(c)
hereof), the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Fair Market Value
of the shares of Common Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness or options, rights or
19
warrants so to be distributed in respect of one share of Common Stock, and the
denominator of which shall be such current Fair Market Value of the shares of
Common Stock. Such adjustment shall be made successively whenever such a record
date is fixed, and, in the event that such distribution is not so made
notwithstanding the setting of a record date therefor, the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(e) Unless the Corporation shall have exercised its election
as provided in Section 11(f), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(c) or (d), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of shares of
Common Stock obtained by (i) multiplying (x) the number of shares of Common
Stock that could be purchased upon exercise of a Right immediately prior to the
adjustment pursuant to this Section 11(e) by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(f) The Corporation may elect, on or after the date of any
adjustment of the Exercise Price pursuant to Section 11(c) or 11(d), to adjust
the number of Rights in substitution for any adjustment pursuant to Section
11(e) in the number of shares of Common Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Corporation shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If the Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(f), the Corporation shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights, if any, to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Corporation,
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 Corporation, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and shall
be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
20
(g) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one whole share, as the case may be.
(h) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Exercise Price and the number of shares to be issued upon exercise
of the Rights as in the initial Right Certificates issued hereunder but,
nevertheless, shall represent the Rights as so adjusted.
(i) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Common Stock upon exercise of the
Rights below the then par value, if any, of the shares of Common Stock, the
Corporation shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of such Common
Stock at such adjusted purchase price per share.
(j) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the
Corporation or any recapitalization, reorganization or partial liquidation of
the Corporation or similar transaction, the Corporation shall be entitled to
make such further adjustments in the number of shares of Common Stock which may
be acquired upon exercise of the Rights, and such adjustments in the Exercise
Price therefor, in addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the Corporation
shall determine to be necessary or appropriate in order for the holders of the
Rights in such event to be treated equitably and in accordance with the purpose
and intent of this Agreement or in order that any such event shall not, but for
such adjustment, in the opinion of counsel to the Corporation, result in the
stockholders of the Corporation being subject to any United States federal
income tax liability by reason thereof.
(k) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Corporation other than the Common
Stock, thereafter the Exercise Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections 11(a), 11(c),
11(e), 11(f) and 11(j) hereof, as applicable, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
Section 12. Certification of Adjusted Exercise Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11, 13, 23(c)
or 27 hereof, the Corporation 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 a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25.
21
Notwithstanding the foregoing sentence, the failure of the Corporation to make
such certification or give such notice shall not affect the validity of or the
force or effect of the requirement for such adjustment. Any adjustment to be
made pursuant to Section 11, 13, 23(c) or 27 hereof shall be effective as of the
date of the event giving rise to such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, at any time after the time that any
Person becomes an Acquiring Person, (x) the Corporation shall, directly or
indirectly, consolidate with, or merge with and into, any other Person or
Persons (other than an Exempt Person) and the Corporation shall not be the
surviving or continuing corporation of such consolidation or merger, or (y) any
Person or Persons (other than an Exempt Person) shall, directly or indirectly,
consolidate with, or merge with and into, the Corporation, and the Corporation
shall be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed or converted into or
exchanged for stock or other securities of any other Person (other than an
Exempt Person) or of the Corporation or cash or any other property, or (z) the
Corporation or one or more of its Subsidiaries shall, directly or indirectly,
sell or otherwise transfer to any other Person (other than an Exempt Person) in
one or more transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Corporation 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) hereof, shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Exercise Price, in
accordance with the terms of this Agreement and in lieu of shares of Common
Stock, such number of shares of validly issued, fully paid, nonassessable and
freely tradeable Common Stock of the Principal Party (as defined in Section
13(b) hereof), not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall equal the result obtained by (1) multiplying
the then current Exercise Price by the number of shares of Common Stock for
which a Right is then exercisable and dividing that product by (2) 50% of the
then per share Fair Market Value of the Common Stock of the Principal Party on
the date of the consummation of such consolidation, merger, sale or transfer;
provided, however, that the Exercise Price (as adjusted) and the number of
shares of Common Stock of such Principal Party so receivable upon exercise of a
Right shall be subject to further adjustment as appropriate in accordance with
Section 11 hereof to reflect any events occurring in respect of the Common Stock
of such Principal Party after the occurrence of such consolidation, merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Corporation pursuant to this Agreement; (iii) the
term "Corporation" for all purposes of this Agreement shall thereafter be deemed
22
to refer to such Principal Party; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with the provisions of Section 9 hereof
applicable to the reservation of Common Stock) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the 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 Exercise Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had it, 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; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the occurrence of any
event described in clause (x), (y) or (z) above of this Section 13(a).
(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)
hereof: (A) the Person that is the issuer of the securities
into which shares of Common Stock of the Corporation are
changed or otherwise exchanged or converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer of the Common Stock of which has the greatest market
value or (B) if no securities are so issued, (I) the Person
that is the other party to the merger or consolidation and
that survives such merger or consolidation, or, if there is
more than one such Person, the Person the Common Stock of
which has the greatest market value or (II) 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 Corporation
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;
23
provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, then (1) if 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 (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest market value of shares
outstanding, or (3) if such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.
(c) The Corporation shall not consummate any consolidation,
merger or sale or transfer of assets or earning power referred to in Section
13(a) unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock that have not been issued or reserved for issuance to
permit exercise in full of all Rights in accordance with this Section 13 and
unless prior thereto the Corporation and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an agreement confirming
that the Principal Party shall, upon consummation of such consolidation, merger
or sale or transfer of assets or earning power, assume this Agreement in
accordance with Section 13(a) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Agreement, and further providing that, as soon as practicable after the date of
any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under
the Securities Act 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 to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to
meet the eligibility requirements for quotation on NASDAQ;
24
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act. In the event
that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights which have
not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable
in the manner described in Section 13(a); and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
(d) In case 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 or By-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the
Corporation shall not consummate any such transaction unless prior thereto the
Corporation and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Corporation covenants and agrees that it shall not, at
any time after any Person becomes an Acquiring Person, enter into any
transaction of the type described in clauses (x) through (z) of the first
sentence of Section 13(a) hereof if (i) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction 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, (ii) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer or other transaction, the
stockholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party would preclude
or limit the exercisability of the Rights.
25
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one share of Common Stock). If the
Corporation shall determine not to issue such fractional Rights, then, in lieu
of such fractional Rights, there shall be paid to the holders of record of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Fair Market
Value of a whole Right.
(b) The Corporation shall not be required to issue fractions
of shares of Common Stock upon exercise or exchange of the Rights or to
distribute certificates which evidence fractional shares. In lieu of issuing
fractions of shares of Common Stock, the Corporation may, at its election, issue
depositary receipts evidencing fractions of shares pursuant to an appropriate
agreement between the Corporation and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all of the rights, privileges and preferences to which they would be
entitled as owners of the Common Stock. If the Corporation does not issue such
fractional shares or depositary receipts in lieu thereof, there shall be paid to
the holders of record 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 Fair Market Value of a share of Common Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Common Stock upon exercise or exchange of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders 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 Corporation 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 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.
26
Section 16. Agreement of Right Holders. Each holder of a
Right, by accepting the same, consents and agrees with the Corporation and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall
be evidenced by the certificates for Common Stock (or in the
case of uncertificated shares of Common Stock, by the
book-entry account that evidences record ownership of such
shares) registered in the name of the holders of Common Stock
(together, as applicable, with the Summary of Rights), which
certificates for Common Stock (or book-entry account) shall
also constitute certificates for Rights, and not by separate
Right Certificates, and each Right shall be transferable only
simultaneously and together with the transfer of shares of
Common Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the office of the Rights
Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Corporation 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 or, in the case of uncertificated shares of Common
Stock, the book-entry account evidencing record ownership of
such shares) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the
associated Common Stock certificate made by anyone other than
the Corporation or the Rights Agent) for all purposes
whatsoever, and neither the Corporation nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any other
securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder or other securityholder of the
Corporation or of a securityholder of any other Person or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action or
securityholder action, or to receive notice of meetings or other actions
affecting stockholders or securityholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or otherwise, except in
any such case the rights, if any, in respect thereof provided by this Agreement,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof for such stock or other
security.
27
Section 18. Concerning the Rights Agent.
(a) The Corporation 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
Corporation also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without negligence,
bad faith or 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 cost and expenses of
defending against any claim of liability relating to the Rights or this
Agreement.
(b) The Rights Agent shall be protected against, and shall
incur no liability for or in respect of, any action taken, suffered or omitted
by it in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for Common Stock or for other securities of
the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. Merger or Consolidation of, or Change in Name of,
the Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this 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 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case 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) In case 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 Right Certificates so countersigned; in case at
28
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; 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 Corporation 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 an employee of or outside legal counsel for the Corporation or the Rights
Agent), 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 Corporation prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board, the
President or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Corporation and delivered to
the Rights Agent. Any such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Corporation of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate describing any such
29
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 security to be delivered pursuant to the exercise of
any Right or as to whether any shares of Common Stock or other security will,
when issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of the Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President or any Vice President or the Secretary
or the Treasurer of the Corporation, 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. Any application by the Rights Agent for written instructions
from the Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than three Business Days after the
date any officer of the Corporation actually receives such application unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation 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 Corporation or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Corporation resulting from any
such act, default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
30
(j) If, with respect to any Rights 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 not been completed to certify the holder is not
an Acquiring Person (or an Affiliate or Associate thereof), a Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Corporation.
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 Corporation and to each
transfer agent of the Common Stock by registered or certified mail. The
Corporation may remove the Rights Agent or any successor Rights Agent (with or
without cause) upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock by registered or certified mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Corporation
shall appoint a successor to the Rights Agent. If the Corporation 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
Corporation), 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 Corporation or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of any state thereof, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination in the
conduct of its corporate trust or stock transfer business by federal or state
authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate
controlled by or under common control with one or more corporations described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Corporation shall have the authority to
act as the Rights Agent until a successor Rights Agent shall have assumed the
duties of the Rights Agent hereunder.
31
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation 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 Exercise Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Voting Stock
following the Distribution Date and prior to the Expiration Date, the
Corporation may with respect to shares of Voting Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Corporation or (iv) a contractual obligation
of the Corporation, in each case existing prior to the Distribution Date, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale.
Section 23. Redemption.
(a) The Corporation may, at its option, but only by the vote
of a majority of its Board of Directors, redeem all but not less than all of the
then outstanding Rights at any time prior to the Close of Business on the tenth
day following the Stock Acquisition Date (subject to extension by the
Corporation as provided in Section 26 hereof) at a redemption price of $0.001
per Right, subject to adjustment as provided in Section 23(c) hereof (the
"Redemption Price"). The redemption of the Rights by the Board of Directors of
the Corporation may be made effective at such time after the Board's action to
redeem the Rights on such basis and subject to such conditions, as the Board of
Directors of the Corporation in its sole and absolute discretion may establish.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable prior to the expiration of the Corporation's right of
redemption hereunder.
(b) Without any further action and without any notice, the
right to exercise the Rights will terminate effective at the time so designated
by action of the Board of Directors of the Corporation ordering the redemption
of the Rights and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after the effective time of the
action of the Board of Directors of the Corporation ordering the redemption of
the Rights, the Corporation shall give notice of such redemption to the holders
of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
notice of redemption will state the method by which the payment of the
Redemption Price will be made. At the option of the Board of Directors of the
Corporation, the Redemption Price may be paid in cash to each Rights holder or
by the issuance of shares of Common Stock or capital stock of the Corporation
(and, at the Corporation's election pursuant to Section 14(b) hereof, cash or
32
depositary receipts in lieu of fractions of shares) having a Fair Market Value
equal to such cash payment.
(c) In the event the Corporation shall at any time after the
date of this Agreement but before the Distribution Date (A) pay any dividend on
Common Stock in shares of Common Stock, (B) subdivide or split the outstanding
shares of Common Stock into a greater number of shares or (C) combine or
consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock and
as a consequence thereof the number of Rights outstanding shall change, then,
and in each such event, the Redemption Price may, by action of the Board of
Directors of the Corporation in its discretion, be appropriately adjusted in
respect of such transaction so as to maintain the aggregate Redemption Price of
all Rights after such transaction at the same amount, insofar as practicable, as
before the transaction.
Section 24. Notice of Proposed Actions.
(a) In case the Corporation, after the Distribution Date,
shall propose (i) to effect any of the transactions referred to in Section
11(a)(i) hereof or to pay any dividend to the holders of record of its shares of
Common Stock payable in shares of capital stock of any class or to make any
other distribution to the holders of record of its Common Stock (other than a
regular periodic cash dividend at a rate not in excess of 150% of the rate of
the last cash dividend theretofore paid), or (ii) to offer to the holders of
record of its Common Stock options, warrants, or other rights to subscribe for
or to purchase shares of Common Stock (including any security convertible into
or exchangeable for Common Stock) or shares of stock of any class or any other
securities, options, warrants, convertible or exchangeable securities or other
rights, or (iii) to effect any reclassification of its Common Stock or any
recapitalization or reorganization of the Corporation, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Corporation, then, in each such case, the Corporation shall
give to each holder of record of a Right Certificate, in accordance with Section
25 hereof, 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 Common
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of record of the Common Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Common Stock, whichever shall
be the earlier. The failure to give notice required by this Section 24 or any
33
defect therein shall not affect the legality or validity of the action taken by
the Corporation or the vote upon any such action.
(b) In case the event referred to in Section 11(a)(ii) hereof
shall occur, then the Corporation shall as soon as practicable thereafter, in
accordance with Section 25 hereof, give to each holder of a Right notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. 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 Corporation shall be in writing and
shall be considered given upon receipt or seven Business Days after being sent
by first-class mail, postage prepaid, in any case addressed (until another
address is filed in writing with the Rights Agent) as follows:
WestPoint ▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of record of
any Right Certificate or Right to or on the Rights Agent shall be in writing and
shall be considered given upon receipt or seven Business Days after being sent
by first-class mail, postage prepaid, in any case addressed (until another
address is filed in writing with the Corporation) as follows:
SunTrust Bank
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ - Annex
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇.▇. ▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of record of any Right Certificate
or Right shall be in writing and shall be considered given upon receipt or seven
Business Days after being sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as shown on the registry books of
the Corporation.
Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable and except as provided in the last sentence of this
Section 26, the Corporation may, in its sole and absolute discretion, and the
Rights Agent shall if the Corporation so directs, supplement or amend any
provision of this Agreement without the approval of any holders of the Rights.
At any time when the Rights are not then redeemable and except as provided in
the last sentence of this Section 26, the Corporation may, and the Rights Agent
34
shall if the Corporation so directs, supplement or amend this Agreement without
the approval of any holders of Right Certificates (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein or (iii) to change or
supplement the provisions hereunder in any manner which the Corporation may deem
necessary or desirable, provided that no such supplement or amendment pursuant
to this clause (iii) shall materially adversely affect the interest of the
holders of Right Certificates (other than an Acquiring Person or any other
Person in whose hands Rights are null and void under the provisions of Section
7(e) hereof). Upon the delivery of a certificate from an appropriate officer of
the Corporation which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price; it being understood that an adjustment of the
Redemption Price in accordance with Section 23 shall not be considered a
supplement or amendment of this Agreement.
Section 27. Exchange.
(a) The Board of Directors of the Corporation 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 provisions of Section 7(e)
hereof) by exchanging for each such Right a number of shares of Common Stock
having an aggregate Fair Market Value on the date such Person became an
Acquiring Person equal to the Spread, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such number of shares of Common Stock per Right being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors of the Corporation shall not be empowered to effect such exchange
at any time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Stock then outstanding. From and after the occurrence of an
event specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 27(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged pursuant to this
Section 27(a).
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation 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 Corporation promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
35
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 for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become null and void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Corporation shall either take such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights, or
alternatively, the Corporation may, if the Board of Directors of the Corporation
determines that such action is necessary or appropriate, in lieu of issuing
Common Stock in exchange for each such Right, elect to issue or pay, upon the
exercise of the Rights, (i) cash, (ii) property, (iii) shares of Common Stock or
other debt or other equity securities of the Corporation (including, without
limitation, Common Stock Equivalents), or any combination thereof, having an
aggregate Fair Market Value equal to the Fair Market Value of the shares of
Common Stock which otherwise would have been issuable pursuant to Section 27(a)
hereof as of the date the Board of Directors of the Corporation makes such
election (which Fair Market Value shall be determined as provided by Section
11(b) hereof). To the extent that the Corporation determines that some action
need be taken pursuant to clauses (i), (ii) or (iii) of this paragraph (c), the
Board of Directors of the Corporation may temporarily suspend the exchange of
the Rights for a period of up to ninety (90) days following the Stock
Acquisition Date , in order to decide the appropriate form of distribution to be
made pursuant to this paragraph (c) and to determine the value thereof. In the
event of any such suspension, the Corporation shall issue a public announcement
stating that the exchange of the Rights has been temporarily suspended.
(d) The Corporation shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares. In lieu of such fractional shares, the Corporation shall pay
to the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock for the Trading Day immediately prior to the date of exchange pursuant to
this Section 27.
Section 28. Successors. All of the covenants and provisions of
this Agreement by or for the benefit of the Corporation or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Corporation,
the Rights Agent and the registered holders of the Right Certificates (and,
36
prior to the Distribution Date, the holders of Common Stock in their capacity as
holders of the Rights) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Corporation, the Rights Agent and the holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 31. 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 32. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 34. Determinations and Actions by the Board of
Directors. The Board of Directors of the Corporation shall have the exclusive
power and authority to administer, interpret and apply this Agreement and to
exercise the rights and powers specifically granted to the Board of Directors of
the Corporation or to the Corporation by this Agreement or by law and may take
such action as may be necessary or advisable in the administration of this
Agreement or to amend or supplement this Agreement in accordance with its terms,
including, without limitation, the right and power (i) to make all
determinations deemed necessary or advisable for the administration of this
Agreement, (ii) to decide to redeem the Rights and (iii) to decide to amend or
supplement this Agreement. All such actions, calculations, interpretations and
determinations (including any decision not to take any action) done or made by
the Board of Directors of the Corporation in good faith shall (x) be final,
conclusive and binding on the Corporation, the Rights Agent, the holders of the
Rights, as such, and all other Persons and (y) not subject any member of the
Board of Directors of the Corporation to any liability to the holders of Rights.
37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
WESTPOINT ▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer
SUNTRUST BANK, as Rights Agent
By: /s/ ▇.▇. ▇▇▇▇
-----------------------------------------
Name: ▇.▇. ▇▇▇▇
Title: Group Vice President
38
EXHIBIT A
---------
-------------------------------------------------
AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED
TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
BE EXERCISED OR TRANSFERRED TO ANY PERSON.
-------------------------------------------------
WESTPOINT ▇▇▇▇▇▇▇ INC.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF COMMON STOCK
On May 9, 2001, the Board of Directors of WestPoint ▇▇▇▇▇▇▇
Inc., a Delaware corporation (the "Corporation"), declared a dividend
distribution of one Common Stock Purchase Right (a "Right") for each outstanding
share of common stock, par value $0.01 per share (the "Common Stock"), of the
Corporation. The distribution was made payable as of May 21, 2001 to
stockholders of record on that date (the "Record Date"). Each Right, once
exercisable, entitles the registered holder to purchase from the Corporation one
(1) share of Common Stock, at a price of $35.00 per share (the "Exercise
Price"), subject to certain adjustments. The description and terms of the Rights
are set forth in a Rights Agreement, dated as of May 9, 2001 (the "Rights
Agreement"), by and between the Corporation and SunTrust Bank, a Georgia
corporation, as Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be
exercisable, certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Corporation (an "Acquiring Person") and (ii)
the tenth business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement by any
person of a tender or exchange offer, the consummation of which would result in
such person or group of affiliated or associated persons becoming an Acquiring
Person.
An Acquiring Person does not include (A) the Corporation, (B)
any subsidiary of the Corporation, (C) any employee benefit plan or employee
stock plan of the Corporation or of any subsidiary of the Corporation, or any
trust or other entity organized, appointed, established or holding voting stock
for or pursuant to the terms of any such plan, (D) any person or group of
affiliated or associated persons whose ownership of 15% or more of the shares of
voting stock of the Corporation then outstanding results solely from (i) any
action or transaction or transactions approved by the Board of Directors before
such person or group became an Acquiring Person or (ii) a reduction in the
number of issued and outstanding shares of voting stock of the Corporation
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
reason of subclause (i) or (ii) of this clause (D) shall become an Acquiring
Person upon acquisition of an additional 1% or more of the Corporation's voting
stock unless such acquisition of additional voting stock would not result in
such person becoming an Acquiring Person by reason of subclause (i) or (ii) of
this clause (D)), (E) any person who, as of May 9, 2001, together with all
affiliates and associates of such person, was the beneficial owner of 15% or
more of the voting stock of the Corporation outstanding as of such date;
provided, however, that any person described in this clause (E) shall become an
Acquiring Person if (i) such person, together with all affiliates and associates
of such person, after May 9, 2001, acquires beneficial ownership of an
additional 1% or more of the voting stock (unless such acquisition is pursuant
to a transaction described in clause (D)(i) or (D)(ii) above) or (ii) such
person, together with all affiliates and associates of such person, after May 9,
2001, reduces its beneficial ownership of the voting stock to less than 15% of
the outstanding voting stock and thereafter becomes the beneficial owner of 15%
or more of the outstanding voting stock (unless such acquisition is pursuant to
a transaction described in clause (D)(i) or (D)(ii) above), or (F) any Lender
(as defined below) or group of Lenders, together with all affiliated or
associated persons of any such Lender or group of Lenders, whose ownership of
15% or more of the shares of voting stock of the Corporation then outstanding
results solely by reason of (i) the Borrower's (as defined below) pledge of
Common Stock (the "Collateral") to such Lender or group of Lenders to secure the
Borrower's obligations under the Fourth Amended and Restated Loan Agreement,
dated as of May 18, 1999 (the "Credit Agreement"), among Bank of America, N.A.,
Bank One, N.A., The Bank of New York, The Bank of Nova Scotia and First Union
National Bank and their respective successors and each other lender which may
become a party thereto (each, a "Lender", and collectively, the "Lenders"), WPS
Investors, L.P. (the "Borrower") and Bank of America, N.A., as agent, or (ii)
the acquisition of beneficial ownership or taking title to or possession of all
or any portion of the Collateral as a result of the Borrower's default under the
Credit Agreement, in each case pursuant to the terms of the Credit Agreement or
any collateral agreement, document or instrument pursuant to which the
Collateral has been pledged; provided, further, that if a Lender or group of
Lenders described in this clause (F) does not become an Acquiring Person by
reason of subclause (i) or (ii) of this clause (F) or by reason of subclause (i)
or (ii) of clause (D) above, such Lender or group of Lenders shall become an
Acquiring Person if, after May 9, 2001, such Lender or group of Lenders
(together with all affiliated or associated persons of such Lender or group of
Lenders) acquires beneficial ownership of an additional 1% or more of the voting
stock of the Corporation (unless such acquisition is pursuant to a transaction
described in clause (D)(i) or (D)(ii) above).
Prior to the Distribution Date, the Rights will not be
exercisable, will not be represented by a separate certificate and will not be
transferable apart from the Corporation's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate with a copy of this Summary
2
of Rights attached thereto. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), new Common Stock certificates issued
after the Record Date will contain a legend incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any of the Common Stock
certificates outstanding as of the Record Date, with or without a copy of this
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date, and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on May 9, 2011, unless earlier
redeemed or exchanged by the Corporation as described below.
The Exercise Price of the Rights and the number of shares of
Common Stock issuable upon exercise of the Rights are subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise Price for the
Rights also is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed, in the event that a
person or group becomes an Acquiring Person, the Rights Agreement provides that
proper provisions will be made so that each holder of record of a Right (other
than Rights beneficially owned by an Acquiring Person and certain affiliates,
associates and transferees thereof, whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of shares of Common Stock having a fair market value
determined in accordance with the Rights Agreement at the time of the
transaction equal to approximately two times the Exercise Price (such value to
be determined with reference to the fair market value of the Corporation's
Common Stock as provided in the Rights Agreement).
In addition, unless the Rights are earlier redeemed or
exchanged, in the event that, after the time that a person or group becomes an
Acquiring Person, the Corporation were to be acquired in a merger or other
business combination (in which any shares of Common Stock are changed into or
exchanged for other securities or assets) or more than 50% of the assets or
earning power of the Corporation and its subsidiaries (taken as a whole) were to
be sold or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder of
record of a Right (other than Rights beneficially owned by an Acquiring Person
and certain affiliates, associates and transferees thereof, whose Rights will
thereupon become null and void) will from and after such date have the right to
receive, upon payment of the Exercise Price, that number of shares of common
stock of the acquiring company having a fair market value at the time of such
transaction determined in accordance with the Rights Agreement equal to
approximately two times the Exercise Price.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding voting stock, the Board of Directors of the Corporation may
3
exchange the Rights (other than Rights owned by such person or group which will
have become null and void), in whole or in part, for that number of shares of
the Corporation's Common Stock having a fair market value on the date such
person or group became an Acquiring Person equal to the excess of (i) the fair
market value of Common Stock issuable upon the exercise of the Rights over (ii)
the Exercise Price of the Rights, in each case subject to anti-dilution
adjustments.
No fractional shares of Common Stock are required to be issued
upon the exercise of any Right, and in lieu thereof the Corporation may cause
depositary receipts to be issued or may make a cash payment, in each case as
provided in the Rights Agreement.
At any time prior to the close of business on the tenth day
after there has been a public announcement that a person has become an Acquiring
Person, the Corporation may redeem the Rights in whole, but not in part, at a
price of $0.001 per Right (the "Redemption Price"). Immediately upon the
effective time of the action of the Board of Directors of the Corporation
authorizing redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
For as long as the Rights are then redeemable, the Corporation
may, except with respect to the Redemption Price, amend the Rights in any
manner, including an amendment to extend the time period in which the Rights may
be redeemed. At any time when the Rights are not then redeemable, the
Corporation may amend the Rights in any manner that does not materially
adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission on May 9, 2001, as an Exhibit to the
Corporation's Current Report on Form 8-K. A copy of the Rights Agreement is
available free of charge from the Corporation. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement which is incorporated in this summary
description herein by reference.
4
EXHIBIT B
---------
[Form of Right Certificate]
Certificate No. ______ Rights
NOT EXERCISABLE AFTER MAY 9, 2011 OR EARLIER IF EXCHANGED OR REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION
AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $0.001 PER RIGHT (SUBJECT TO
ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS
AGREEMENT. AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW),
RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR
AFFILIATES OR ASSOCIATES OR TRANSFEREES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE EXERCISED OR TRANSFERRED
TO ANY PERSON.
Right Certificate
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of May 9, 2001 (the "Rights Agreement"), by and between
WestPoint ▇▇▇▇▇▇▇ Inc., a Delaware corporation (the "Corporation"), and SunTrust
Bank, a corporation organized under the laws of the State of Georgia, as Rights
Agent, or its successor in interest as Rights Agent (the "Rights Agent"), to
purchase from the Corporation at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time)
on May 9, 2011 at the office of the Rights Agent designated in the Rights
Agreement for such purpose, one (1) fully paid and nonassessable share of Common
Stock, par value $0.01 per share (the "Common Stock"), of the Corporation, or
other securities or property in lieu thereof as provided by the Rights
Agreement, at a purchase price of $35.00, as the same may from time to time be
adjusted in accordance with the Rights Agreement (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Common Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Common Stock, or other property,
may be acquired upon exercise of the Rights evidenced by this Right Certificate,
as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Rights
Agent, the Corporation and the holders of record of Right Certificates. Copies
of the Rights Agreement are on file at the principal executive office of the
Corporation.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent designated in the
Rights Agreement for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder of record to purchase a like aggregate number of shares of
Common Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at its option
or under certain other circumstances at a redemption price of $0.001 per Right.
No fractional shares of Common Stock are required to be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof
the Corporation may cause depositary receipts to be issued or a cash payment may
be made, in each case as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Stock or of any other securities of the Corporation which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Dated as of __________ ___, 20__.
ATTEST: WESTPOINT ▇▇▇▇▇▇▇ INC.
By
------------------------------------ ---------------------------------
[Assistant] Secretary Title:
Countersigned:
SUNTRUST BANK
By
----------------------------------
Authorized Signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if
such holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED __________________________________________
hereby sells, assigns and transfers unto ______________________________________
-------------------------------------------------------------------------------
(Please print name and address of transferee)
-------------------------------------------------------------------------------
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer the within Right Certificate on
the books of the within-named Corporation, with full power of substitution.
Dated: ____________ ___, 20__
---------------------------
Signature
Signature Guaranteed:
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Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated: __________ ___, 20__
------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO _____________________:
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Right Certificate to purchase the
shares of Common Stock issuable upon the exercise of such Rights and requests
that certificates for such share(s) be issued in the following name:
Please insert social security
or other identifying number:
---------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
----------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: ___________ ___, _____
----------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
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