RIGHTS AGREEMENT
by and between
▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.
and
BANKBOSTON, N.A.
as
Rights Agent
Dated as of March 26, 1998
This Agreement, dated as of March 26, 1998, is by and between
▇▇▇▇▇▇ Residential Properties, Inc., a Maryland corporation (the
"Company"), and BankBoston, N.A. (the "Rights Agent").
RECITAL
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as such term is hereinafter
defined) of the Company outstanding as of the close of business on
April 7, 1998 or such earlier date as may be determined by the
Board of Directors of the Company (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a Preferred
Share (as such term is hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms
have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall hereafter become a Beneficial
Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares of the Company then outstanding, but shall
not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall be
deemed to have become an "Acquiring Person" as the result of
an acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases
the proportionate number of Common Shares beneficially owned
by such Person to 15% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding by reason of Common
Share purchases by the Company and shall, after such Common
Share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person" as of the time of
the acquisition of such additional Common Shares by such
Person. Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this
Section 1(a), has become such inadvertently, and such Person
divests (within such period as of the Board of Directors may
deem appropriate) a sufficient number of Common Shares so that
such Person is no longer an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1(a),
then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Affiliate" and "Affiliates" shall have the meaning
ascribed to such terms in Rule l2b-2 promulgated under the
Exchange Act (as such term is hereinafter defined), as in
effect on the date of this Agreement.
(d) "Agreement" shall mean this agreement, as it may be
amended or supplemented from time to time pursuant to
Section 27 hereof.
(e) "Associate" and "Associates" shall have the meaning
ascribed to such terms in Rule l2b-2 promulgated under the
Exchange Act, as in effect on the date of this Agreement.
(f) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, as determined pursuant to Rule l3d-3
promulgated under the Exchange Act;
(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) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public offering
of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not (pursuant to this
Section 1(f)(ii)(A)) be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase
or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided,
however that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act (as such term is
hereinafter defined) and (2) is not also then reportable
on Schedule 13D (or any comparable or successor report)
promulgated under the Exchange Act; 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 (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(f)(ii)(B) hereof) or disposing of
any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the
number of such securities not then actually issued and
outstanding which such Person would be deemed to own
beneficially hereunder.
(g) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in
the State of Massachusetts are authorized or obligated by law
or executive order to close.
(h) "Close of business" on any given date shall mean
5:00 P.M., Boston, Massachusetts time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., Boston, Massachusetts time, on the next succeeding
Business Day.
(i) "Common Share" and "Common Shares" when used with
reference to the Company shall mean, as applicable, one or
more of the shares of common stock, par value $0.01 per share,
of the Company. "Common Shares" when used with reference to
any Person other than the Company shall mean the capital stock
(or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(j) "Company" shall have the meaning ascribed to such
term in the first paragraph of this Agreement.
(k) "Current per share market price" shall have the
meaning ascribed to such term in Section 11(d)(i) of this
Agreement.
(l) "Distribution Date" shall have the meaning ascribed
to such term in Section 3 hereof
(m) "Equivalent preferred shares" shall have the meaning
ascribed to such term in Section 11(b) hereof
(n) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(o) "Exchange Ratio" shall have the meaning ascribed to
such term in Section 24(a) hereof
(p) "Final Expiration Date" shall have the meaning
ascribed to such term in Section 7(a) hereof.
(q) "Flip-In Event" shall have the meaning ascribed to
such term in Section 11(a)(ii) hereof.
(r) "Payment Date" shall mean April 20, 1998 or such
earlier date as may be determined by the Board of Directors of
the Company.
(s) "Person" and "Persons" shall mean any individual,
firm, corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity or entities.
(t) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $0.01 per
share, of the Company having the rights and preferences set
forth in the Form of Articles Supplementary attached to this
Agreement as Exhibit A.
(u) "Purchase Price" shall have the meaning ascribed to
such term in Section 4(a) hereof.
(v) "Record Date" shall be deemed to have the meaning
ascribed to such term in the Recital to this Agreement.
(w) "Redemption Date" shall have the meaning ascribed to
such term in Section 7(a) hereof.
(x) "Redemption Price" shall have the meaning ascribed
to such term in Section 23(a) hereof.
(y) "Right" and "Rights" shall be deemed to have the
meaning ascribed to such terms in the Recital to this
Agreement.
(z) "Right Certificate" shall be deemed to mean the form
of certificate evidencing the ownership of Rights in
substantially the form of Exhibit B hereto.
(aa) "Rights Agent" shall be deemed to have the meaning
ascribed to such term in the first paragraph of this Agreement
and shall include any additional or substitute rights agents
hereafter appointed pursuant to the terms of this Agreement.
(bb) "Shares Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.
(cc) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
beneficially owned, directly or indirectly, by such Person.
(dd) "Summary of Rights" shall have the meaning ascribed
to such term in Subsection 3(b) hereof.
(ee) "Trading Day" and "Trading Days" shall have the
meaning ascribed to such terms in Section 11(d)(i) of this
Agreement.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of
the Common Shares of the Company) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Board of Directors of the Company may, in
accordance with the provisions of Section 21 hereof, from time to
time appoint such substitute rights agents as it may deem necessary
or desirable.
Section 3. Issuance of Right Certificates.
(a) One Right shall be associated with each Common Share
outstanding on the Record Date, each additional Common Share
that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date, and each additional Common Share with
which Rights are issued after the Distribution Date and prior
to the earlier of the Redemption Date and the Final Expiration
Date; provided, however, that, if the number of outstanding
Rights are combined into a smaller number of outstanding
Rights pursuant to Section 11 hereof, the appropriate
fractional Right determined pursuant to such Section shall
thereafter be associated with each such Common Share.
(b) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by the Board of Directors
of the Company prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares of the
Company for or pursuant to the terms of any such plan) of, or
of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares of the
Company for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which
would result in any Person becoming 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"), (A) the Rights will be evidenced (subject to the
provisions of Section 3(c) hereof) by the certificates for
Common Shares of the Company registered in the names of the
holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates,
and (B) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common
Shares of the Company. If the Distribution Date would,
pursuant to the foregoing provisions of this Section 3(b),
occur prior to the Payment Date (but for the provisions of
this sentence), the Distribution Date shall, notwithstanding
the foregoing provisions of this Section 3(b), not be deemed
to occur until the Payment Date.
As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign and the Company (or the Rights Agent, if requested
by the Company) will send or cause to be sent by first-class,
insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the close of business on the
Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one
Right for each Common Share of the Company so held. As of and
after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(c) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the form
of Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares
of the Company as of the close of business on the Record Date,
at the address of such holder shown on the records of the
Company. With respect to certificates for Common Shares of
the Company outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares of the
Company outstanding on the Record Date, with or without a copy
of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the
Common Shares of the Company represented thereby.
(d) Certificates for Common Shares of the Company which
become outstanding (including, without limitation,
certificates issued upon the transfer of Common Shares of the
Company and certificates representing reacquired Common Shares
of the Company referred to in the last sentence of this
Section 3(c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written
on or otherwise affixed to such certificates a legend in
substantially the following form:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between ▇▇▇▇▇▇ Residential
Properties, Inc. and BankBoston, N.A., dated as of
March 26, 1998 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal executive offices of ▇▇▇▇▇▇ Residential
Properties, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no
longer be evidenced by this certificate. ▇▇▇▇▇▇
Residential Properties, Inc. will mail to the
holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as
set forth in the Rights Agreement, Rights issued to
any Person who becomes an Acquiring Person (as
defined in the Rights Agreement) may become null
and void.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights
associated with the Common Shares of the Company represented
by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated
with the Common Shares of the Company represented thereby. In
the event that the Company purchases or acquires any of its
Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights
associated with its Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase Preferred Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements
printed thereon as the Board of Directors of the Company may
deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange or automated quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"),
but the number of such one one-hundredths of a Preferred Share
and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Right Certificate issued pursuant hereto that
represents (i) Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate of an Acquiring Person,
(ii) Rights transferred to a transferee by an Acquiring Person
(or of any such Associate or Affiliate) who becomes such a
transferee after the Acquiring Person becomes such or
(iii) Rights transferred to a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes
such a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of the
second paragraph of Section 11(a)(ii) hereof, and any Right
Certificate issued pursuant hereto upon transfer, exchange,
replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was
or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented
hereby may become null and void in the
circumstances specified in Section 11(a)(ii) of
such Rights Agreement.
In the case of a determination made pursuant to
clause (iii) of this Section 4(b) the Company shall notify the
Rights Agent of such determination.
Section 5. Countersignature and Registration. From and
after the distribution of Right Certificates pursuant to the second
paragraph of Section 3(a) hereof, (a) the Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board,
its President or any of its Executive Vice Presidents, either
manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof and shall be attested by the
Treasurer or an Assistant Treasurer, or Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature; (b) the Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned; (c) in case any officer of the
Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery thereof, such Right
Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered with the same force and effect as
though the person who signed such Right Certificates had not ceased
to be such officer of the Company; and (d) any Right Certificate
may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration
and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its
face by each of the Right Certificates, the certificate number of
each Rights 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. Subject to the provisions of Section 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
Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof
or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-hundredths of a Preferred
Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the Rights Agent's offices in
Massachusetts. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificates until the
registered holder shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall countersign and deliver
to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
them, and, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will make and deliver
a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate
so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Except as otherwise provided herein (including
Section 24 hereof), each Right shall entitle the registered
holder thereof, upon exercise thereof as provided herein, to
purchase for the Purchase Price, at any time after the
Distribution Date and at or prior to the earliest of (i) the
close of business on April 20, 2008 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date") and
(iii) the time at which such Rights are exchanged as provided
in Section 24 hereof, one one-hundredth of a Preferred Share,
subject to adjustment from time to time as provided in Section
11 or 13 hereof.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth of a Preferred Share
as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business the Final Expiration
Date, (ii) the Redemption Date or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(c) The Purchase Price for each one one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a
Right shall initially be $70.00, and shall be subject to
adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with Section 7(d) below.
(d) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i)
(A) requisition from any transfer agent of the Common Shares
of the Company and/or Preferred Shares certificates for the
number of Common Shares of the Company and/or Preferred Shares
to be purchased and the Company hereby irrevocably authorizes
and directs its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby authorizes and
directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(e) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
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 Company or to any of its agents, be delivered to
the Rights Agent for cancellation, 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 the
provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7 hereof. The Company
covenants and agrees that it will take all such action as may
be necessary to ensure that all Common Shares of the Company
and/or Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
Preferred Shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and
nonassessable shares.
(b) In the event that there shall not be sufficient
Preferred Shares issued but not outstanding or authorized but
unissued to permit the exercise or exchange of Rights in
accordance with Section 11 or 24 hereof, as the case may be,
the Company covenants and agrees that it will take all such
action as may be necessary to authorize additional Preferred
Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11 or 24 hereof, as the case may be;
provided, however, that if the Company is unable to cause the
authorization of additional Preferred Shares, then the Company
shall, or in lieu of seeking any such authorization, the
Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect
prior to the Distribution Date to which it is a party, (i)
upon surrender of a Right, pay cash equal to the Purchase
Price in lieu of issuing Preferred Shares and requiring
payment therefor, (ii) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to
which such Right is exercised, issue equity securities having
a value equal to the value of the Preferred Shares which
otherwise would have been issuable pursuant to Section 11 or
24 hereof, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of
Directors of the Company or (iii) upon due exercise of a Right
and payment of the Purchase Price for each Preferred Share as
to which such Right is exercised, distribute a combination of
Preferred Shares, cash and/or other equity and/or debt
securities having an aggregate value equal to the value of the
Preferred Shares which otherwise would have bear issuable
pursuant to Section 11 or 24 hereof, which value shall be
determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company. To the
extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution
Date to which it is a party) prevent the Company from paying
the full amount payable in accordance with the foregoing
sentence, the Company shall pay to holders of the Rights as to
which such payments are being made all amounts which are not
then restricted on a pro rata basis as such payments become
permissible under such legal or contractual restrictions until
such payments have been paid in full.
(c) So long as the Common Shares of the Company and/or
Preferred Shares issuable and deliverable upon the exercise of
the Rights may be listed or traded on any national securities
exchange or automated quotation system, the Company shall use
its best efforts to cause, from and after such time as the
Rights become exercisable, all Common Shares of the Company
and/or Preferred Shares reserved for such issuance to be
listed on such exchange or automated quotation system upon
official notice of issuance upon such exercise.
(d) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the
first occurrence of a Flip-In Event, a registration statement
under the Act with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective (with a prospectus
at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the date of the
expiration of the Rights. The Company will also take such
action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i)
of the first sentence of this Section 9(d), the exercisability
of the Rights in order to prepare and file such registration
statement and permit it to become effective. The Company will
notify the Rights Agent of any such suspension. Upon any such
suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the
Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been
declared effective. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the exercise thereof shall not be
permitted under applicable law.
(e) From and after the Distribution Date, the Company
further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Common Shares of
the Company and/or Preferred Shares upon the exercise of
Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or
depositary receipts for the Common Shares of the Company
and/or Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Common Shares of the
Company and/or Preferred Shares upon the exercise of any
Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in
whose name any certificate for Common Shares of the Company and/or
Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the
Common Shares of the Company and/or Preferred Shares represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the transfer books
of the Company relating to the Common Shares of the Company and/or
Preferred Shares are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate
shall be dated, the next succeeding day on which such transfer
books are open.
Section 11. Adjustment of Purchase Price, Number of Shares
or Number of Rights. The Purchase Price, the number of Preferred
Shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
(a) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend
on the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a
smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such
subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on
such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time
when the Preferred Shares transfer books of the Company
were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be
in addition to and shall be made prior to any adjustment
required pursuant to Section 11(a)(ii) hereof.
(i) Subject to Sections 23 and 24 of this
Agreement, in the event any Person becomes an Acquiring
Person (the "Flip-In Event"), each holder of a Right
shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for
which a Right is then exercisable and (B) dividing that
product by 50% of the then "current per share market
price" of the Common Shares of the Company on the date of
the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not, except
as permitted by Section 23 hereof, take any action which
would eliminate or diminish the benefits intended to be
afforded by this Agreement or the benefits intended to be
afforded by the Rights.
From and after the occurrence of such event, any
Rights (1) that are or were acquired or beneficially
owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person), (2) transferred to
a transferee by an Acquiring Person (or of any such
Associate or Affiliate) who becomes such a transferee
after the Acquiring Person becomes such or
(3) transferred to a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes such
a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (x) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or (y) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement
or understanding which has a primary purpose or effect
the avoidance of this second paragraph of
Section 11(a)(ii) shall be void and any holder and/or
subsequent holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this
Agreement or to exercise any rights under this Agreement
with respect to such Rights. The Company shall use all
reasonable efforts to insure that the provisions of this
Section 11(a)(ii) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure
to make any determination with respect to an Acquiring
Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant
to Section 3 hereof that represents Rights beneficially
owned by an Acquiring Person whose Rights would be void
pursuant to the second preceding sentence or any
Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void
pursuant to the second preceding sentence 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 whose Rights would be void pursuant
to the second preceding sentence shall be cancelled.
(ii) In the event that there shall not be sufficient
Common Shares of the Company issued but not outstanding
or authorized but unissued to permit the exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof
(the difference between the number of Common Shares of
the Company issuable upon the full exercise of the Rights
and the actual number of Common Shares available for
issuance at such time being referred to herein as the
"Adjustment Shares"), the Company shall, to the extent
permitted by applicable law and regulation: (A)
determine the excess of (1) the value of the SBT Shares
issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess to be
referred to hereinafter as the "Spread"), and (B) with
respect to each Right, make adequate provision to
substitute for the SBT Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the
Company (including, without limitation, shares, or units
of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same
value as the Common Shares (such shares of preferred
stock being referred to herein as "common share
equivalents")), (4) debt securities of the Company, (5)
other assets or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value as
determined by the Board of Directors of the Company;
provided, however, that if the Company shall not have
made adequate provision to deliver value pursuant to
clause (b) above within 30 days following the first
occurrence of a Flip-In Event (the "Flip-In Trigger
Date"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares
(to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company
determines in good faith that it is likely that
sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the
extent necessary, but no to more than 120 days after the
Flip-In Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such
additional shares (such period, as it may be extended,
the "Substitution Period"). To the extent the Company
determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the
event of any such suspension, the Company shall deliver
a notice to the Rights Agent and issue a public
announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a
notice to the Rights Agent and a public announcement at
such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current per share market price
(as determined pursuant to Section 11(d) hereof) of the
Common Shares on the Flip-In Trigger Date, and the value
of any common share equivalent shall be deemed to have
the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having substantially the
same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred
shares at a price per Preferred Share or equivalent preferred
share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred
shares) less than the then current per share market price of
the Preferred Shares on such record date, the Purchase Price
to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the number of Preferred Shares outstanding on such record
date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
per share market price and the denominator of which shall be
the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right. 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
Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or
held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market
price of the Preferred Shares; provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Company to be issued upon exercise of
one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder,
the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30
consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per
share market price of the Security is determined during
a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification, then, and in each such case, the
current per share market price shall be appropriately
adjusted to reflect the current market price per share
equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system
with respect to securities listed on the principal
national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in
use, or, if on any such date the Security is not quoted
by any such organization, the average of the closing bid
and asked prices as furnished by a professional market
maker making a market in the Security selected by the
Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or
admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business
Day.
(i) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred
Shares shall be determined in accordance with the method
set forth in Section 11(d)(i) hereof. If the Preferred
Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market
price of the Common Shares of the Company as determined
pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares
of the Company nor the Preferred Shares are publicly held
or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed
with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of
the right to exercise any Rights.
(f) 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 Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred
Shares contained in Sections 11(a) through (c) hereof,
inclusive, and the provisions of Sections 7, 9, 10 and 13
hereof with respect to the Preferred Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths of
a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i) hereof, upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (A) the
number of one one-hundredths of a Preferred Share covered by
a Right immediately prior to this adjustment by (B) the
Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter,
but, if the Distribution Date shall have occurred, shall be at
least 10 days later than the date of the public announcement.
If the Distribution Date shall have occurred, upon each
adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares
issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above
the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Board of Directors of the Company shall
be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into
or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to in Section 11(b) hereof,
hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on its Common Shares
payable in Common Shares of the Company or (ii) effect a
subdivision, combination or consolidation of its Common Shares
(by reclassification or otherwise than by payment of dividends
in Common Shares of the Company) into a greater or lesser
number of its Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of
a Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of
Common Shares of the Company outstanding immediately before
such event and the denominator of which is the number of
Common Shares of the Company outstanding immediately after
such event, and (B) each Common Share of the Company
outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common
Share of the Company outstanding immediately prior to such
event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever
such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event, directly or indirectly, at any time
after a Person has become an Acquiring Person, (i) the Company
shall consolidate with, or merge with and into, any other
Person, (ii) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares
of the Company shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash
or any other property or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person other than the Company or one or
more of its wholly-owned Subsidiaries, then, and in each such
case, proper provision shall be made so that (A) each holder
of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Principal Party
(as such term is hereinafter defined) as shall equal the
result obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that
product by (2) 50% of the then current per share market price
of the Common Shares of the Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (B) the
issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger,
sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company"
shall thereafter be deemed to refer to such Principal Party;
and (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of
its Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the
Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto
the Company and such issuer shall have executed and delivered
to the Rights Agent a supplemental agreement so providing and
further providing that, as soon as practicable after the date
of any such consolidation, merger or sale of assets, the
issuer will:
(x) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective
(with a prospectus at all times meeting the requirements
of the Act) until the Expiration Date; and
(y) deliver to holders of the Rights historical
financial statements for the issuer and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the
Exchange Act.
The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (i) or (ii) of the first sentence of Section 13(a)
hereof, the Person that is the issuer of any securities
into which Common Shares of the Company are converted in
such transaction, or if there is more than one issuer,
the issuer of the Common Shares with the greatest
aggregate market value, and if no securities are so
issued, the Person that is the other party to such
transaction, or if there is more than one such Person,
the Person having Common Shares with the greatest
aggregate market value; and
(ii) in the case of any transaction described in
clause (iii) of the first sentence of Section 13(a)
hereof, the Person that is the party receiving the
greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (A) if the
Common Shares of such Person are not at such time and
have not been continuously over the preceding
twelve-month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect
Subsidiary of any Person the Common Shares of which are
and have been so registered, "Principal Party" shall
refer to such other Person; and (B) in case such Person
is a Subsidiary, directly or indirectly, of more than one
Person, the Common Shares of two or more of which are and
have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common
Shares having the greatest aggregate market value.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence
Fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
the purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. 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 principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes
of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right (except as
provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except the rights of action given to the
Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares of
the Company); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Shares of the
Company), 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 Shares of the Company), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, 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.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the
Common Shares of the Company;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to
the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as a
result of the Company's or Rights Agent's inability to perform
any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
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 the Preferred Shares or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability or
expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses
of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for
the Preferred Shares or Common Shares of the Company or for other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. 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 stock
transfer or corporate trust powers 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 Right Certificates
shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned;
and 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.
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; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Executive Vice President, the
Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person 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 Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24 hereof, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Executive Vice
President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions, in
connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in
acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing mailed
to the Company and to each transfer agent of the Common Shares of
the Company or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail.
The Board of Directors of the Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' prior written notice,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares of the
Company or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and
doing business under the laws of the United States or of the State
of New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking
institution in the State of Texas) in good standing, having an
office in the State of Texas, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject
to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50 million. After appointment,
the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Shares or Preferred Shares, and
mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may at its
option, at any time prior to the earlier of (i) the close of
business on the tenth Business Day following the date on which
any Person becomes an Acquiring Person (or if such date shall
have occurred prior to the Record Date, the close of business
on the tenth Business Day following the Record Date) or
(ii) the Final Expiration Date, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). The redemption of the Rights by the
Board of Directors of the Company may be made effective at
such time, on such basis and with such conditions as the Board
of Directors of the Company in its sole discretion may
establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to Section 23(a) hereof, and without any further
action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights, the
Company shall mail a notice of redemption to all the holders
of the then outstanding Rights 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 Shares of the Company. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this
Section 23 or in Section 24 hereof and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may at its
option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares of the Company at an exchange ratio
of one such Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or
any such Subsidiary or any entity holding Common Shares of the
Company for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common
Shares of the Company then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to Section 24(a) hereof 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
Common Shares of the Company equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares of the
Company 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 void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares of the Company issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares of the Company for issuance upon
exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares of the
Company, the Company shall substitute, for each Common Share
of the Company that would otherwise be issuable upon exchange
of a Right, a number of Preferred Shares or fraction thereof
such that the current per share market price of such Preferred
Shares or fraction thereof is equal to the current per share
market price of one Common Share of the Company as of the date
of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions
of its Common Shares or to distribute certificates which
evidence fractional Common Shares of the Company. In lieu of
such fractional Common Shares of the Company, the Company
shall pay to the registered holders of the Right Certificates
with regard to which such fractional Common Shares of the
Company would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole
Common Share of the Company. For the purposes of this
Section 24(d), the current market value of a whole Common
Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) If at any time subsequent to the Shares Acquisition
Date, the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of the Preferred
Shares or to make any other distribution to the holders of the
Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of the Preferred
Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the
Company or (vi) to declare or pay any dividend on the Common
Shares of the Company payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends
in Common Shares), then, in each such case, the Company shall
give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of
the Common Shares of the Company and/or Preferred Shares, 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 the Preferred Shares for purposes of
such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of
the Common Shares of the Company and/or Preferred Shares,
whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Right Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the
Rights Agent) as follows:
▇▇▇▇▇▇ Residential Properties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Boston EquiServe
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Rights Administrator
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right
Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the
Company or the Rights Agent, as applicable.
Section 27. Supplements and Amendments. The Board of
Directors of the Company may from time to time supplement or amend
this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Board of Directors
of the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that from and after such time
as any Person becomes an Acquiring Person, this Agreement shall not
be amended in any manner which would adversely affect the interests
of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); and provided
further, however, that this Agreement may not be supplemented or
amended to lengthen (a) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable
or (b) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery
of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment; provided, however, that the Rights
Agent may, but shall not be obligated to, enter into any such
supplement or amendment which affects its own rights, duties or
immunities under this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or
amendment shall be made that (i) reduces the Redemption Price
(except as required hereunder by appropriate adjustment to reflect
any stock split, stock dividend or similar transaction occurring
after the date of this Agreement) or (ii) provides for an earlier
Final Expiration Date.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
Common Shares of the Company) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares of the Company).
Section 30. 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;
provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Maryland and for all purposes shall
be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely
within such State.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
Section 34. Determinations and Actions by the Board of
Directors. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of
Directors of the Company or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including,
without limitation, the right and power to (a) interpret the
provisions of this Agreement and (b) make all determinations deemed
necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for the purposes of
clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors of the Company in
good faith and in accordance with the provisions of this Agreement,
shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the rights and all other parties, and
(ii) not subject the Board to any liability to the holder of the
Rights.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.
Attest:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- ---------------------
Title: Vice President Title: Executive Vice President
Attest: BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- ---------------------
Title: Account Manager Title: Administration Manager
db980330060
040698 v14
111:14199-41
Exhibit A
FORM
OF
ARTICLES SUPPLEMENTARY CLASSIFYING
AND DESIGNATING A SERIES OF
PREFERRED STOCK AS SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK
AND FIXING DISTRIBUTION AND
OTHER PREFERENCES AND RIGHTS OF SUCH SERIES
▇▇▇▇▇▇ Residential Properties, Inc., a Maryland corporation,
having its principal office in the State of Maryland in the City of
Baltimore (the "Corporation"), hereby certifies to the State of
Department of Assessments and Taxation of Maryland that:
Pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation, as amended (the "Articles"), and
Bylaws of the Corporation, the Board of Directors adopted
resolutions authorizing the creation and issuance of a series of
350,000 shares of preferred stock, par value $.01 per share
designated as "Series A Junior Participating Preferred Stock" with
preferences and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and
conditions of redemption of the shares of such series as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" (the "Series A Preferred Stock") and the number of
shares constituting the Series A Preferred Stock shall be Three
Hundred Fifty Thousand (350,000). Such number of shares may be
increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of
Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock
with respect to dividends, including, without limitation, the
Corporation's 9.20% Senior Preferred Stock (the "Senior
Preferred Stock") and 9.16% Series B Convertible Redeemable
Preferred Stock (the "Convertible Preferred Stock"), the
holders of shares of Series A Preferred Stock, in preference
to the holders of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) One
Dollar and No/100 ($1.00) or (ii) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
under clause (ii) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (a) of this Section 2 immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock), provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to
receive the payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
A Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided herein, in any other
Articles Supplementary creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock
and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock, provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity with the Series
A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other
Articles Supplementary creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of
shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or
(b) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity stock
in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding
up. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (a) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times
the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock, including, without limitation, the
Senior Preferred Stock and the Convertible Preferred Stock.
Section 10. Amendment. The Articles of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its Chief Executive
Officer this _______ day of ______________, 1998.
▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.
By: _____________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
Exhibit B
Form of Right Certificate
Certificate No. R- ______ Rights
CUSIP ________
NOT EXERCISABLE AFTER APRIL 20, 2008, OR EARLIER IF REDEEMED
OR EXCHANGED. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT PURSUANT TO WHICH THIS RIGHT CERTIFICATE HAS BEEN
ISSUED. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS AND DEFINITIONS IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER WILL BECOME NULL
AND VOID.
Right Certificate
▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.
This certifies that ____________________, or registered
assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as
of March 26, 1998 (the "Rights Agreement"), between ▇▇▇▇▇▇
Residential Properties, Inc., a Maryland corporation (the
"Company"), and, BankBoston, N.A., _______________ (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., [New York, New York] time, on April 20,
2008, at the principal office of the Rights Agent, or at the office
of its successor as rights agent, one one-hundredth of a fully paid
non-assessable share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares"), of the
Company, at a purchase price of $____________ per one one-hundredth
of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of ________________, based on the Preferred
Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths
of a Preferred Share which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor evidencing Rights entitling the holder
to purchase a like aggregate number of Preferred Shares 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 (i) may be redeemed by the Company at
a redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for Preferred Shares or shares of the Company's
common stock, par value $0.01 per share.
No fractional Preferred Shares or shares of the Company's
common stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions of Preferred Shares
which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise or exchange 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 Company or any right to vote for the
election of directors or upon any matter submitted to stockholders
at any meeting thereof or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in 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.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ___________________,
199__.
ATTEST: ▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.
Countersigned:
By
Authorized Signature
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 Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name, address and taxpayer identification number or
social security number (as
applicable) of transferee)
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 Company, with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
Signature
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: ▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Right Certificate to purchase the
securities issuable upon the exercise of such Rights and requests
that certificates for such securities be issued in the name of:
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)
The undersigned elects to purchase (check one) _______ Preferred
Shares or ______ Common Shares of the Company.
Dated: ,
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
Signature
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written
upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be,
is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate
to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On March 26, 1998, the Board of Directors of ▇▇▇▇▇▇
Residential Properties, Inc. (the "Company") declared a dividend of
one preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $0.01 per share (the "Common
Shares"), of the Company. The dividend is payable on April 20,
1998 (or such earlier date as may be determined by the Board of
Directors of the Company) to all holders of record of Common Shares
as of the close of business on April 7, 1998 (or such earlier date
as may be determined by the Board of Directors of the Company (the
"Record Date"). Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $0.01 per share
(the "Preferred Shares"), of the Company at a price of $70.00 per
one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement) between the
Company and BankBoston, N.A., Boston, Massachusetts, as Rights
Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding Common Shares or (ii) 10 business
days (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any person
or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing Common Shares with a
copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Share certificates issued after the Record
Date upon transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated
with the Common Shares 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 Shares as of the close of business
on the Distribution Date and thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on April 20, 2008 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
At any time following the Distribution Date, Rights (other
than Rights owned by an Acquiring Person and the Acquiring Person's
affiliates and associates, which will have become void) may be
exercised (subject to their earlier termination, expiration or
exchange) to acquire, in lieu of Preferred Shares, at the then
current Purchase Price of the Right, that number of Common Shares
(or if there are insufficient Common Shares, Preferred Shares or
fractions thereof) which at such time will have a market value of
two times the Purchase Price of the Right.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares, (ii) upon
the grant to holders of the Preferred Shares of certain rights or
warrants to subscribe for or purchase Preferred Shares at a price,
or securities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings
or dividends payable in Preferred Shares) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment equal to the
greater of (i) One Dollar and No/100 ($1.00) per share or (ii) 100
times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled
to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment
made per Common Share. Each Preferred Share will have 100 votes,
voting together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become
an Acquiring Person, proper provision will be made so that each
holder of a Right (other than an Acquiring Person and the
affiliates and associates of such Acquiring Person, whose Rights
will have become void) will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market
value of two times the Purchase Price of the Right. In the event
that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person or the affiliates and associates of such Acquiring
Persons (which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having
a market value of two times the Purchase Price of the Right.
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 Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by
such person or group and their respective affiliates and associates
which will have become void), in whole or in part, at an exchange
ratio of one Common Share, or one one-hundredth of a Preferred
Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to or within 10 business days following the
acquisition by a person or group of affiliated or associated
persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right
(the "Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis with such conditions as the
Board of Directors of the Company in its sole discretion may
establish. Immediately upon any 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.
The Board of Directors may supplement or amend the Right
Agreement without the approval of the holders of Rights. From and
after such time as any person or group of affiliated or associated
persons become an Acquiring Person, the Rights Agreement may not be
amended in any manner which would adversely affect the interests of
the holders of the Rights (other than the Acquiring Person or an
affiliate or associated of an Acquiring Person). The terms of the
Rights may not be amended to (i) reduce the Redemption Price
(except as required by antidilution provisions) or (ii) provide for
an earlier Final Expiration Date.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
Pursuant to the Rights Agreement, certain actions (e.g.
redeeming outstanding Rights, amending the Rights Agreement. etc.)
may only be made with the approval of the Board of Directors of the
Company, including a majority of at least three (3) Continuing
Directors (as hereinafter defined). As used herein, a Continuing
Director will mean any person (other than an Acquiring Person) or
an affiliate or associate of an Acquiring Person or a
representative of an Acquiring Person or of any such affiliate or
associate) who was a director prior to the date of the Rights
Agreement and any person (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person or a representative
of an Acquiring Person or of any such affiliate or associate)
nominated for selection or elected to the Board of Directors of the
Company pursuant to the approval of a majority of the Continuing
Directors.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a Registration
Statement on Form 8-A. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
db980330060