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COSI, INC.
and
AMERICAN TRANSFER AND TRUST COMPANY
as Rights Agent
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Rights Agreement
Dated as of November 21, 2002
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TABLE OF CONTENTS
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Section 1. Certain Definitions.............................................
Section 2. Appointment of Rights Agent.....................................
Section 3. Issuance of Right Certificates..................................
Section 4. Form of Right Certificates......................................
Section 5. Countersignature and Registration...............................
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates....................................................
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights..........................................................
Section 8. Cancellation and Destruction of Right Certificates..............
Section 9. .Reservation and Availability of Shares of Preferred Stock......
Section 10. Preferred Stock Record Date.....................................
Section 11. Adjustment of Exercise Price or Number of Shares................
Section 12. Certification of Adjusted Exercise Price or Number of Shares....
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................
Section 14. Fractional Rights and Fractional Shares.........................
Section 15. Rights of Action................................................
Section 16. Agreement of Right Holders......................................
Section 17. Right Certificate Holder Not Deemed a Stockholder...............
Section 18. Concerning the Rights Agent.....................................
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent....................................................
Section 20. Duties of the Rights Agent......................................
Section 21. Change of Rights Agent..........................................
Section 22. Issuance of New Right Certificates..............................
Section 23. Redemption or Exchange..........................................
Section 24. Notice of Proposed Actions......................................
Section 25. Supplements and Amendments......................................
Section 26. Determination and Actions by the Board of Directors of the
Corporation, etc................................................
Section 27. Benefits of this Rights Agreement...............................
Section 28. Miscellaneous...................................................
Exhibit A -- Form of Exhibit A to the Amended and Restated Certificate
of Incorporation
Exhibit B -- Summary of Rights
Exhibit C -- Form of Right Certificate
RIGHTS AGREEMENT
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Agreement, dated as of November 21, 2002, between Cosi, Inc., a
Delaware corporation (the "Corporation"), and American Stock Transfer and Trust
Company, as Rights Agent (the "Rights Agent").
RECITALS
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WHEREAS, the Board of Directors of the Corporation has authorized
the issuance of, and declared a dividend of one right for each share of common
has stock (as defined below), $0.01 par value per share, of the Corporation
outstanding as of the close of business on the date of the Corporation's initial
public offering, each such right representing the right to purchase one
one-hundredth of a share of Preferred Stock of the Corporation having the rights
and preferences set forth in the form of Exhibit A to the Amended and Restated
Certificate of Incorporation of the Corporation attached as Exhibit A to this
Agreement; and
WHEREAS, the Board of Directors of the Corporation further
authorized the issuance of one right (subject to adjustment) with respect to
each share of common stock which may be issued between the November 21, 2002 and
the date the rights expire;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
(a) For purposes of this Agreement, the following terms have
the meanings indicated:
"Acquiring Person" means any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person, is
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Voting Stock (as such term is hereinafter defined) of the Corporation then
outstanding; provided that, an Acquiring Person shall not include (i) an Exempt
Person (as such term is hereinafter defined) or (ii) any Person, together with
all Affiliates and Associates of such Person, who or which would be an Acquiring
Person solely by reason of (A) being the Beneficial Owner of shares of Voting
Stock of the Corporation, the Beneficial Ownership of which was acquired by such
Person pursuant to any action or transaction or series of related actions or
transactions approved by the Board of Directors before such Person otherwise
became an Acquiring Person or (B) a reduction in the number of issued and
outstanding shares of Voting Stock of the Corporation pursuant to a transaction
or a series of related transactions approved by the Board of Directors of the
Corporation; provided further, that in the event such Person described in this
clause (ii) does not become an Acquiring Person by reason of subclause (A) or
(B) of this clause (ii), such Person nonetheless shall become an Acquiring
Person in the event such Person thereafter acquires Beneficial Ownership of an
additional 2% or more of the Voting Stock of the Corporation then outstanding,
unless the acquisition of such additional Voting Stock would not result in such
Person becoming an Acquiring Person by reason of subclause (A) or (B) of this
clause (ii). Notwithstanding the foregoing, if the Board of Directors of the
Corporation determines in good faith that a Person who would otherwise be an
"Acquiring Person" as defined pursuant to the foregoing provisions of this
paragraph (a) has become such inadvertently, and such Person divests as promptly
as practicable (as determined in good faith by the Board of Directors) a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person" as defined pursuant to the foregoing provisions of this
definition, then such Person shall not be deemed an "Acquiring Person" for any
purposes of this Rights Agreement. In determining what is "as promptly as
practicable" the Board may take into account such factors as the impact of the
divestment on the market price of the Corporation's Common Stock, the average
volume of trading in its shares, and other factors that may affect its
stockholders or the price of its common stock.
"Affiliate" has the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement.
"Associate" of a Person means (i) with respect to a Corporation, any
officer or director thereof or of any Subsidiary (as such term is hereinafter
defined) thereof, or any Beneficial Owner (as such term is hereinafter defined)
of 10% or more of any class of equity security thereof, (ii) with respect to an
association, any officer or director thereof or of a Subsidiary thereof, (iii)
with respect to a partnership, any general partner thereof or any limited
partner thereof who is, directly or indirectly, the Beneficial Owner of a 10%
ownership interest therein, (iv) with respect to a limited liability
Corporation, any officer, director or manager thereof or of a Subsidiary thereof
or any member thereof who is, directly or indirectly, the Beneficial Owner of a
10% or greater ownership interest therein, with respect to a business trust, any
officer or trustee thereof or of any Subsidiary thereof, (v) with respect to any
other trust or an estate, any trustee, executor or similar fiduciary or any
Person who has a 10% or greater interest as a beneficiary in the income from or
principal of such trust or estate, (vi) with respect to a natural person, any
relative or spouse of such person, or any relative of such spouse, who has the
same home as such person, and (vii) any Affiliate of such Person.
A person is deemed the "Beneficial Owner" of, or to "Beneficially
Own," any securities (and correlative terms shall have correlative meanings):
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Regulations 13D and 13G thereunder
(or any comparable or successor law or regulation), in each case as in
effect on the date; or
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or the fulfillment of a
condition or both) pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of conversion rights,
exchange rights, other rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own," securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange or (B) the right
to vote, alone or in concert with others, pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or
to "Beneficially Own," any securities if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act and (2) is not at the time reportable by such
Person on a Schedule 13D report under the Exchange Act (or any comparable
or successor report), other than by reference to a proxy or consent
solicitation being conducted by such Person; or
(iii) which are Beneficially Owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting (except as
described in clause (B) of subparagraph (ii) of this definition) or
disposing of any securities of the Corporation; provided, however, that
for purposes of determining Beneficial Ownership of securities under this
Rights Agreement, officers and directors of the Corporation solely by
reason of their status as such shall not constitute a group
(notwithstanding that they may be Associates of one another or may be
deemed to constitute a group for purposes of Section 13(d) of the Exchange
Act) and shall not be deemed to own shares owned by another officer or
director of the Corporation.
Notwithstanding anything in this definition to the contrary, a Person
engaged in the business of underwriting securities shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any securities acquired
in good faith in a firm commitment underwriting until the expiration of
forty days after the date of such acquisition.
"Book Entry" means an uncertificated book entry for the
Corporation's Common Stock.
"Business Day" means any day other than a Saturday, Sunday, or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of Business" on any given date means 5:00 P.M., New York
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
"Common Stock" when used with reference to the Corporation, means
the common stock, $0.01 par value per share, of the Corporation. Collectively
"Common Stock" when used with reference to any Person other than the Corporation
which shall be organized in corporate form shall mean the capital stock or other
equity security with the greatest per share voting power of such Person or, if
such other Person is a subsidiary of another Person, the Person or Persons which
ultimately control such first mentioned Person. "Common Stock" when used with
reference to any Person other than the Corporation which shall not be organized
in corporate form shall mean units of beneficial interest which shall represent
the right to participate in profits, losses, deductions and credits of such
Person and which shall be entitled to exercise the greatest voting power of such
Person per unit of such Person.
"Corporation" is defined in the introductory paragraph.
"Distribution Date" has the meaning set forth in Section 3(b)(ii).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" has the meaning set forth in Section 23(d).
"Exempt Person" means (i) the Corporation, (ii) any Subsidiary of
the Corporation, (iii) any employee benefit plan or employee stock plan of the
Corporation or any Subsidiary of the Corporation, or any trust or other entity
organized, appointed, established or holding Common Stock for or pursuant to the
terms of any such plan and (iv) any existing shareholder of the Corporation as
of the day immediately preceding the Record Date.
"Exercise Price" has the meaning set forth in Sections 4(a) and
7(b).
"Expiration Date" has the meaning set forth in Section 7(a).
"Fair Market Value" of any property means the fair market value of
such property as determined in accordance with Section 11(b).
"Invalidation Time" is defined in Section 7(e).
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System or any successor thereto or other comparable
quotation system.
"Person" means any individual, firm, Corporation or other entity.
"Principal Party" has the meaning set forth in Section 13(b).
"Qualifying Tender Offer" means a tender or exchange offer for all
outstanding shares of Common Stock of the Corporation approved by a majority of
the Board of Directors, after taking into account the potential long-term value
of the Corporation and all other factors that they consider relevant.
"Record Date" means November 21, 2002.
"Redemption Price" has the meaning set forth in Section 23(a).
"Right" is defined in Section 3(d).
"Right Certificate" has the meaning set forth in Section 3(d).
"Rights Agent" is defined in the introductory paragraph.
"Securities Act" means the Securities Act of 1933, as amended.
"Preferred Stock" means Series D Preferred Stock, par value $.01 per
share, of the Corporation having the terms set forth in Exhibit A to the Amended
and Restated Certificate of Incorporation of the Corporation.
"Stock Acquisition Date" means the first date on which there shall
be a public announcement by the Corporation or an Acquiring Person that an
Acquiring Person has become such (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person.
"Subsidiary" of a Person means any corporation or other entity of
which securities or other ownership interests having voting power sufficient to
elect a majority of the Board of Directors or other persons performing similar
functions are Beneficially Owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled by such Person.
"Summary of Rights" has the meaning set forth in Section 3(a).
"Trading Day" has the meaning set forth in Section 11(b).
"Transfer Tax" means any tax or charge, including any documentary
stamp tax, imposed or collected by any governmental or regulatory authority in
respect of any transfer of any security, instrument or right, including Rights,
shares of Common Stock and shares of Preferred Stock.
"Voting Stock" means (i) the Common Stock of the Corporation and
(ii) any other shares of capital stock of the Corporation entitled to vote
generally in the election of directors or entitled to vote together with the
Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation, dissolution or
winding up. For purposes of this Agreement, Voting Stock shall include
securities of the type referred to in clauses (i) and (ii) above that trade on a
"when issued" basis on a national securities exchange or on the NASDAQ. For
purposes of this Agreement, a stated percentage of the Voting Stock shall mean a
number of shares of the Voting Stock as shall equal in voting power that stated
percentage of the total voting power of the then outstanding shares of Voting
Stock in the election of a majority of the Board of Directors or in respect of
any merger, consolidation, sale of all or substantially all of the Corporation's
assets, liquidation, dissolution or winding up.
(b) Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
(c) Any determination required to be made by the Board of Directors
of the Corporation for purposes of applying the definitions contained in this
Section 1 shall be made by the Board of Directors in its good faith judgment,
which determination shall be binding on the Rights Agent and the holders of the
Rights.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation and the holders of
the Rights in accordance with the terms and conditions, and the Rights Agent
hereby accepts such appointment. The Corporation may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable. If the Corporation
appoints one or more co-Rights Agents, then the respective duties of the Rights
Agent and any co-Rights Agents shall be as the Corporation shall determine.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) On the Record Date (or as soon as practicable thereafter), the
Corporation or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first class mail, postage prepaid, to each record holder of the Common Stock,
as of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Corporation.
(b) (i) Until the Close of Business on the Distribution Date
(defined below), then (A) the Rights shall be evidenced by the certificates for
Common Stock registered in the name of the holders of Common Stock, (together
with, in the case of certificates for Common Stock, outstanding as of the Record
Date, the Summary of Rights) and not by separate Right certificates and the
record holders of such certificates for Common Stock, shall be the record
holders of the Rights represented thereby and (B) each Right shall be
transferable only simultaneously and together with the transfer of a share of
Common Stock, (subject to adjustment as hereinafter provided). Until the
Distribution Date (or, if earlier, the Expiration Date), transfer on the
Corporation's Direct Registration System of any Common Stock, represented by a
Book Entry or the surrender for transfer of any certificate for Common Stock,
shall constitute the surrender for transfer of the Right or Rights associated
with the Common Stock, evidenced thereby, whether or not accompanied by a copy
of the Summary of Rights.
(ii) The "Distribution Date" is the day which is the earlier of:
(A) the tenth day after the Stock Acquisition Date or such
earlier or later date (not beyond the thirtieth day after the Stock Acquisition
Date) as the Board of Directors may from time to time fix by resolution adopted
prior to the Distribution Date that otherwise would have occurred or
(B) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than an Exempt Person) of, or the first public announcement (by public
filing or otherwise) of the intent of any Person (other than an Exempt Person)
to commence or engage in, a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and Associates,
would be the Beneficial Owner of 15% or more of the then outstanding shares of
Voting Stock of the Corporation (irrespective of whether any shares are actually
purchased pursuant to any such offer).
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date and, in certain circumstances provided
in Section 3(e) and Section 22, may be issued in respect of shares of Common
Stock that become outstanding after the Distribution Date. Certificates for
Common Stock (including, without limitation, certificates issued upon original
issuance, disposition from the Corporation's treasury or transfer or exchange of
Common Stock) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date (or, in certain circumstances as provided in
Section 3(e) and Section 22, after the Distribution Date) shall have impressed,
printed, written or stamped thereon or otherwise affixed thereto the following
legend:
This certificate also evidences and entitles the holder to the same
number of Rights (subject to adjustment) as the number of shares of
Common Stock represented by this certificate, such Rights being on
the terms provided under the Rights Agreement between Cosi, Inc. and
American Stock Transfer and Trust Company (the "Rights Agent"),
dated as of November 21, 2002, as it may be amended from time to
time (the "Rights Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at the principal
executive offices of Cosi, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights shall be evidenced by
separate certificates and shall no longer be evidenced by this
certificate. Cosi, Inc. shall mail to the registered holder of this
certificate a copy of the Rights Agreement without charge within
five days after receipt of a written request therefor. Under certain
circumstances as provided in Section 7(e) of the Rights Agreement,
Rights issued to or Beneficially Owned by Acquiring Persons or their
Affiliates or Associates (as such terms are defined in the Rights
Agreement) or any subsequent holder of such Rights shall be null and
void and may not be transferred to any Person.
(d) As soon as practicable after the Distribution Date, the
Corporation will prepare and execute, the Rights Agent will countersign, and the
Corporation will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class mail, postage prepaid, to each record holder of
the Common Stock as of the close of business on the Distribution Date, as shown
by the records of the Corporation, at the address of such holder shown on such
records, a certificate in the form provided by Section 4 (a "Right"), evidencing
one Right (subject to adjustment as provided herein) for each share of Common
Stock so held. As of and after the Distribution Date, the Rights shall be
evidenced solely by Right Certificates and may be transferred by the transfer of
the Right Certificate as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
(e) In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the Expiration
Date, the Corporation (i) shall, with respect to shares of Common Stock so
issued or sold (i) pursuant to the exercise of stock options or under any
employee plan or arrangement or (ii) upon the exercise, conversion or exchange
of other securities issued by the Corporation prior to the Distribution Date and
(ii) may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided
that no such Right Certificate shall be issued if, and to the extent that, (A)
the Corporation shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Corporation or the
Person to whom such Right Certificate would be issued or (B) appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
shares, certificate and assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit C
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Common Stock or the Rights
may from time to time be listed or as the Corporation may deem appropriate to
conform to usage or otherwise and as are not inconsistent with the provisions of
this Rights Agreement. Subject to the provisions of Section 22, Right
Certificates evidencing Rights whenever issued, (i) shall be dated as of the
date of issuance of the Rights they represent and (ii) subject to adjustment
from time to time as provided herein, on their face shall entitle the holders
thereof to purchase such number of shares (including fractional shares which are
integral multiples of one one-hundredths of a share) of Preferred Stock as shall
be set forth therein at the price payable upon exercise of a Right provided by
Section 7(b) as the same may from time to time be adjusted as provided herein
(the "Exercise Price").
(b) Notwithstanding any other provision of this Rights Agreement,
any Rights Certificate that represents Rights Beneficially Owned by an Acquiring
Person or any Affiliate or Associate thereof or any other Person whose Rights
shall become void pursuant to Section 7(e) shall have impressed on, printed on,
written on or otherwise affixed to it (if the Corporation or the Rights Agent
has knowledge that such Person is an Acquiring Person or an Associate or
Affiliate or a nominee of any of the foregoing) the following legend;
The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or an Associate
of an Acquiring Person. Accordingly, this Rights Certificate and the
Rights represented hereby shall become void in the circumstances
specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) Each Right Certificate shall be executed on behalf of the
Corporation by its President or any Vice President, either manually or by
facsimile signature, and have affixed thereto the Corporation's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Corporation, either manually or by facsimile signature. Each
Right Certificate shall be countersigned by the Rights Agent either manually or
by facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Corporation who shall have signed any
Right Certificate shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery of the
certificate by the Corporation, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Corporation. Any Right Certificate may be
signed on behalf of the Corporation by any person who, on the date of the
execution of such Right Certificate, shall be a proper officer of the
Corporation to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
(a) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or one or more offices designated as
the appropriate place for surrender of Right Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 7(e), 7(f) and 14, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Right Certificate, may be (i)
transferred or (ii) split up, combined or exchanged for one or more other Right
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Right Certificate shall surrender the Right Certificate
at the office of the Rights Agent designated for the surrender of Right
Certificates with the form of certificate and assignment on the reverse side
thereof duly endorsed (or enclosed with such Right Certificate a written
instrument of transfer in form satisfactory to the Corporation and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated therefor. Thereupon, the Rights Agent shall countersign
and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Corporation may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14, upon
receipt by the Corporation and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Corporation,
reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Corporation shall issue and deliver a
new Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Sections 7(e) and 23(a)). Except as otherwise provided in this Agreement, the
Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent designated for such purpose, together with payment of the
Exercise Price for each Right exercised, subject to adjustment as hereinafter
provided, at or prior to the Close of Business on the earlier of: (i) November
21, 2012 (or if the Distribution Date shall have occurred before November 21,
2012, at the close of business on the 90th day following the Distribution Date)
and (ii) the date on which the rights are redeemed or exchanged as provided in
Section 23 (the "Expiration Date").
(b) The Exercise Price shall initially be $100.00 for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of Preferred
Stock or other securities to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13. The
Exercise Price shall be payable in lawful money of the United States of America,
in accordance with Section 7(c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment by certified check, cashier's
check, bank draft or money order payable to the Corporation or the Rights Agent
of the Exercise Price for the shares to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of the Right
Certificate in accordance with Section 9(e), the Rights Agent thereupon
promptly:
(i) shall requisition from any transfer agent of the Preferred
Stock of the Corporation one or more certificates representing the number of
shares of Preferred Stock to be so purchased, and the Corporation hereby
authorizes and directs such transfer agent to comply with all such requests,
(ii) as provided in Section 14(b), at the election of the
Corporation, shall cause depositary receipts to be issued in lieu of fractional
shares of Preferred Stock,
(iii) if the election provided for in the immediately
preceding clause (ii) has not been made, shall requisition from the Corporation
the amount of cash to be paid in lieu of the issuance of fractional shares in
accordance with Section 14(b),
(iv) after receipt of such Preferred Stock certificates and,
if applicable, depositary receipts, shall cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder; and
(v) when appropriate, after receipt, shall promptly deliver
such cash to or upon the order of the registered holder of such Right
Certificate; provided, however, that in the case of a purchase of securities,
other than Preferred Stock, pursuant to Section 13, the Rights Agent shall
promptly take the appropriate actions corresponding in such case to that
referred to in the foregoing clauses (i) through (v) of this Section 7(c).
Notwithstanding the foregoing provisions of this Section 7(c),
the Corporation may suspend the issuance of shares of Preferred Stock upon
exercise of a Right for a reasonable period, not in excess of 90 days, during
which the Corporation seeks to register under the Securities Act, and any
applicable securities law of any other jurisdiction, the shares of Preferred
Stock to be issued pursuant to the Rights; provided, however, that nothing
contained in this Section 7(c) shall relieve the Corporation of its obligations
under Section 9(c).
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or his
assign, subject to the provisions of Section 14(b).
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "Invalidation Time") when any Person
first becomes an Acquiring Person, other than pursuant to a Qualifying Tender
Offer, any Rights that are beneficially owned by (x) such Acquiring Person (or
any Associate or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Invalidation Time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of such Persons
referred to in clause (y) and (z) above, shall be void without any further
action and any holder of such Rights shall thereafter have no rights whatsoever
with respect to such Rights under any provision of this Rights Agreement. The
Corporation shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but shall have no liability to any holder
of Right Certificates or any other Person as a result of its failure to make any
determination with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights Beneficially Owned by an Acquiring Person whose
Rights would be void pursuant to the provisions of this Section 7(e) or any
Associate or Affiliate 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 provisions of this Section 7(e) or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 7(e) shall be cancelled. The Corporation shall use all reasonable
efforts to insure that the provisions of this Section 7(e) are complied with,
but shall have no liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates and Associates or any transferee of any of
them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate following the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Corporation shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Corporation shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
cancel and retire, any Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, destroy such cancelled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Corporation.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED
STOCK.
(a) The Corporation covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or out of authorized and issued shares of Preferred Stock held
in its treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding Rights.
(b) The Corporation shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance in accordance with this Rights Agreement to be
listed, upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the NASDAQ.
(c) The Corporation covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Corporation shall use its best efforts:
(i) to file, as soon as practicable following the occurrence of
the event described in Section 11(a)(ii), or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Act, with respect to the shares of Preferred Stock purchasable upon
exercise of the Rights on an appropriate form;
(ii) to cause such registration statement to become effective
as soon as practicable after such filing; and
(iii) to cause such registration statement to remain 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
Preferred Stock, or (B) the Expiration Date.
(e) The Corporation may temporarily suspend, for a period of time
not to exceed ninety days, the issuance of shares of Preferred Stock upon
exercise of a Right in order to prepare and file a registration statement under
the Act and permit it to become effective. The Corporation will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the exercisability
of the Rights. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Act (if required) shall have been declared
effective.
(f) The Corporation covenants and agrees that it will pay when due
and payable any and all Transfer Taxes which may be payable in respect of the
issuance or delivery of the Right Certificates or of any shares of Preferred
Stock issued or delivered upon the exercise of Rights. The Corporation shall
not, however, be required to pay any Transfer Tax which may be payable in
respect of any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of certificates for Preferred Stock upon
exercise of Rights in a name other than that of, the registered holder of the
Right Certificate, and the Corporation shall not be required to issue or deliver
a Right Certificate or certificate for Preferred Stock to a Person other than
such registered holder until any such Transfer Tax shall have been paid (any
such Transfer Tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Corporation's
satisfaction that no such Transfer Tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person in whose name
any certificate for shares of Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the Preferred Stock represented thereby on, and such certificate shall be dated
as of, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the
Corporation are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated as of, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Corporation are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate, as such, shall not be entitled to any rights of a
stockholder of the Corporation with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Corporation,
except as provided herein.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES. The
Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a Right are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after the
date of this Rights Agreement (A) declare or pay any dividend on Common Stock
payable in shares of Common Stock (or other capital stock), (B) subdivide or
split the outstanding shares of Common Stock into a greater number of shares or
(C) combine or consolidate the outstanding shares of Common Stock into a smaller
number of shares or effect a reverse split of the outstanding shares of Common
Stock or (D) issue any shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or surviving
Corporation), then and in each such event the number of shares of Preferred
Stock issuable upon the exercise of a Right after the record date for such event
(if one shall have been established or, if not, after the date of such event)
shall be the number of shares of Preferred Stock issuable immediately prior to
such event multiplied by a fraction the numerator of which is the number of
Rights outstanding immediately prior to such event and the denominator of which
is the number of Rights outstanding immediately after such event and the
Exercise Price after such event shall be the Exercise Price in effect
immediately prior to such event multiplied by such fraction. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event that any Person (other than an Exempt
Person), alone or together with its Affiliates and Associates, shall become an
Acquiring Person, except pursuant to a Qualifying Tender Offer, then, subject to
the last sentence of Section 23(a) and except as otherwise provided in this
Section 11, each holder of a Right, except as provided in Section 7(e), shall
thereafter have the right to receive upon exercise of such Right in accordance
with the terms of this Rights Agreement and payment of the Exercise Price, the
greater of (1) the number of 1/100 of a share of Preferred Stock for which such
Right was exercisable immediately prior to the first occurrence of the event
described in this Section 11(a)(ii) or (2) such number of one one-hundredths of
a share of Preferred Stock, based on the per share Fair Market Value of the
Preferred Stock (determined pursuant to Section 11(b)) on the date of such first
occurrence, having a value equal to twice the Exercise Price; provided, however,
that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13, then only the
provisions of Section 13 shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii).
(iii) In the event that the Corporation does not have available
sufficient authorized but unissued Preferred Stock to permit the adjustments
required pursuant to the foregoing subparagraph (i) or the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Corporation
shall take all such actions as may be necessary to authorize and reserve for
issuance such number of additional shares of Preferred Stock as may from time to
time be required to be issued upon the exercise in full of all Rights from time
to time outstanding and, if necessary, shall use its best efforts to obtain
stockholder approval thereof. In lieu of issuing shares of Preferred Stock in
accordance with the foregoing subparagraphs (i) and (ii), the Corporation may,
if the Board of Directors determines that such action is necessary or
appropriate and not contrary to the interests of holders of Rights, elect to
issue or pay, upon the exercise of the Rights, cash, property, shares of
Preferred or Common Stock, debt or other equity securities or any combination
thereof, having an aggregate Fair Market Value equal to the Fair Market Value of
the shares of Preferred Stock which otherwise would have been issuable pursuant
to Section 11(a)(ii), which Fair Market Value shall be determined by an
investment banking firm selected by the Board of Directors. For purposes of the
preceding sentence, the Fair Market Value of the Preferred Stock shall be as
determined pursuant to Section 11(b). Subject to Section 23, any such election
by the Board of Directors of the Corporation must be made and publicly announced
within thirty days after the date on which the event described in Section
11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Preferred Stock, Common Stock or any other stock or any
Right or other security or any other property on any date shall be determined as
provided in this Section 11(b). In the case of a publicly-traded stock or other
security, the Fair Market Value on any date shall be deemed to be the average of
the daily closing prices per share of such stock or per unit of such other
security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the event
that the Fair Market Value per share of any share of Common Stock is determined
during a period which includes any date that is within 30 Trading Days after (i)
the ex-dividend date for a dividend or distribution on such stock payable in
shares of Common Stock or securities convertible into shares of Common Stock, or
(ii) the effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in each such
case, the Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Corporation to take into account ex-dividend or post-effective
date trading. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way (in either case, as reported in
the applicable transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the securities are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the applicable transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average of
the high bid and low asked prices) in the over-the-counter market, as reported
by the NASDAQ or such other system then in use; or, if no bids for such security
are quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Corporation. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day. If a security is
not publicly held or not so listed or traded, "Fair Market Value" shall mean the
fair value per share of stock or per other unit of such other security, as
determined by an independent investment banking firm experienced in the
valuation of securities selected in good faith by the Board of Directors of the
Corporation, or, if no such investment banking firm is, in the good faith
judgment of the Board of Directors, available to make such determination, in
good faith by the Board of Directors of the Corporation; provided, however, that
for purposes of making the adjustment provided for by Section 11(a)(ii), the
Fair Market Value of a share of Preferred Stock shall not be less than 100% of
the product of the Fair Market Value of a share of Common Stock multiplied by
the higher of the then Dividend Multiple or Vote Multiple applicable to the
Preferred Stock (as defined in the Certificate of Designations relating to the
Preferred Stock) and shall not exceed 105% of the product of the then Fair
Market Value of a share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred Stock. In the
case of property other than securities, the "Fair Market Value" thereof shall be
determined in good faith by the Board of Directors of the Corporation based upon
such appraisals or valuation reports of such independent experts as the Board of
Directors of the Corporation shall in good faith determine to be appropriate in
accordance with good business practices and the interests of the holders of
Rights. Any such determination of Fair Market Value shall be described in a
statement filed with the Rights Agent and shall be binding upon the Rights
Agent.
(c) All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-hundredth of a share, as the case may be.
(d) Irrespective of any adjustment or change in the Exercise Price
or the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Exercise Price and the number of shares to be issued upon exercise
of the Rights as in the initial Right Certificates issued hereunder but,
nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment reducing
the purchase price per whole share of Preferred Stock upon exercise of the
Rights below the then par value, if any, of the shares of Preferred Stock, the
Corporation shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of such Preferred
Stock at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary notwithstanding, in
the event of any reclassification of stock of the Corporation or any
recapitalization, reorganization or partial liquidation of the Corporation or
similar transaction, the Corporation shall be entitled to make such further
adjustments in the number of shares of Preferred Stock which may be acquired
upon exercise of the Rights, and such adjustments in the Exercise Price
therefor, in addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the Corporation
shall determine to be necessary or appropriate in order for the holders of the
Rights in such event to be treated equitably and in accordance with the purpose
and intent of this Rights Agreement or in order that any such event shall not,
but for such adjustment, in the opinion of counsel to the Corporation, result in
the stockholders of the Corporation being subject to any United States federal
income tax liability by reason thereof.
(g) In the event the Corporation shall at any time after the Record
Date make any distribution on the shares of Common Stock or other capital stock
of the Corporation, whether by way of a dividend or a reclassification of stock,
a recapitalization, reorganization or partial liquidation of the Corporation or
otherwise, in cash or any debt security, debt instrument, real or personal
property or any other property (other than any shares of Common Stock or other
capital stock of the Corporation and other than any right or warrant to acquire
any such shares, including any debt security convertible into or exchangeable
for any such share, at less than the Fair Market Value of such shares) and the
amount of such cash dividend or the Fair Market Value of such debt security,
debt instrument or property exceeds 150% of the aggregate amount of the cash
dividends declared or paid on the Common Stock of the Corporation in the
15-month period immediately preceding such distribution, then and in each such
event, unless such distribution is part of or is made in connection with a
transaction to which Section 11(a)(ii) or Section 13 applies, the Exercise Price
shall be reduced by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock of the Corporation.
For purposes, the Fair Market Value of any property distributed to the holders
of shares of Common Stock of the Corporation shall be the Fair Market Value of
such property as determined by an independent investment banking firm
experienced in the valuation of securities or the other property so distributed,
as the case may be, selected in good faith by the Board of Directors of the
Corporation, or, if no such investment banking firm is in the good faith
judgment of the Board of Directors available to make such determination, in good
faith by the Board of Directors of the Corporation, whose determination shall be
final and binding on the Corporation, the Rights Agent and the holders of
Rights.
SECTION 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11, 13 or 23(c),
the Corporation shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 24.
Notwithstanding the foregoing sentence, the failure of the Corporation to make
such certification or give such notice shall not affect the validity of or the
force or effect of the requirement for such adjustment. Any adjustment to be
made pursuant to Section 11, 13 or 23(c) of this Rights Agreement shall be
effective as of the date of the event giving rise to such adjustment. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) Except for any transaction approved by the Board of Directors,
in the event that, at any time on or after any Person becomes an Acquiring
Person:
(x) the Corporation shall, directly or indirectly, consolidate
with, or merge with and into, any other Person or Persons (other than an Exempt
Person) and the Corporation shall not be the surviving or continuing Corporation
of such consolidation or merger; or
(y) any Person or Persons (other than an Exempt Person) shall,
directly or indirectly, consolidate with, or merge with and into, the
Corporation, and the Corporation shall be the continuing or surviving
Corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person (other than an Exempt Person) or of the Corporation or cash or any other
property; or
(z) the Corporation or one or more of its Subsidiaries shall,
directly or indirectly, sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person, in one or more transactions, or the
Corporation or one or more of its Subsidiaries shall sell or otherwise transfer
to any Persons in one or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole),
then, on the first occurrence of any such event, proper provision shall be
made so that
(i) each holder of record of a Right, except as provided in
Section 7(e), shall thereafter have the right to receive, upon the exercise
thereof and payment of the Exercise Price in accordance with the terms of this
Rights Agreement, such number of shares of validly issued, fully paid,
non-assessable and freely tradable Common Stock of the Principal Party (as
defined herein), not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall, based on the Fair Market Value of the Common
Stock of the Principal Party on the date of the Consummation of such
consolidation, merger, sale or transfer, equal twice the Exercise Price;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Corporation pursuant to this Rights Agreement;
(iii) the term "Corporation" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Principal Party;
(iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock in accordance with the provisions of Section 9 applicable to the
reservation of Preferred Stock) in connection with such consummation as may be
necessary to assure that the provisions shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided, however, that,
upon the subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Exercise Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had it, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms for such cash, shares,
rights, warrants and other property and (v) the provisions of Section 11(a)(ii)
shall be of no effect following the occurrence of any event described in clause
(x), (y) or (z) above of this Section 13(a).
(b) "Principal Party" means:
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a): (A) the Person that is the issuer of the
securities into which shares of Common Stock of the Corporation are changed or
otherwise exchanged or converted in such merger or consolidation, or, if there
is more than one such issuer, the issuer of the Common Stock of which has the
greatest market value or (B) if no securities are so issued, (x) the Person that
is the other party to the merger or consolidation and that survives such merger
or consolidation, or, if there is more than one such Person, the Person the
Common Stock of which has the greatest market value or (y) if the Person that is
the other party to the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or consolidation
(including the Corporation if it survives); and
(ii) in the case of any transaction described in (z) of the
first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest market value of shares outstanding;
provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer to such other
Person, or if such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of all of which are and have been so registered,
the term "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest market value of shares
outstanding.
(c) The Corporation shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in Section 13(a)
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Corporation and the Principal Party involved therein shall
have executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) and that all rights of first refusal or preemptive
rights in respect of the issuance of shares of Common Stock of the Principal
Party upon exercise of outstanding Rights have been waived and that such
transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a), the Principal Party will:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the date of
expiration of the Rights, and similarly comply with applicable state securities
laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act. In the event that any of the transactions described in Section
13(a) shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii), the Rights which have not theretofore been exercised shall,
subject to the provisions of Section 7(e), thereafter be exercisable in the
manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of the Corporation or By-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Fair
Market Value per share (determined pursuant to Section 11(b)) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then Fair Market Value (other than to holders of Rights pursuant
to this Section 13) or (ii) providing for any special tax or similar payment in
connection with the issuance to any holder of a Right of Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Corporation shall not consummate any such transaction unless prior
thereto the Corporation and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one one-hundredth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to in
Section 11(a)(i). If the Corporation shall determine not to issue such
fractional Rights, then, in lieu of such fractional Rights, there shall be paid
to the holders of record of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Fair Market Value of a whole Right.
(b) The Corporation shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one one-hundredth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Corporation may, at its election,
issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Corporation and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as owners of the Preferred Stock. With respect to fractional
shares that are not integral multiples of one one-hundredth of a share, if the
Corporation does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the Fair Market Value of a share of Preferred
Stock.
(c) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share) upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Rights Agreement, except the rights of action given to the Rights Agent in
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock; and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this Rights
Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Each holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by
the certificates for Common Stock registered in the name of the holders of
Common Stock together, as applicable, with the Summary of Rights), which
certificates for Common Stock shall also constitute certificates for Rights, and
not by separate Right Certificates, and each Right shall be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Corporation and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Book Entry representing, or certificate for, Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by anyone
other than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Corporation must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible; and
(e) Rights Beneficially Owned by certain Persons will under certain
circumstances set forth in this Agreement become null and void pursuant to
Section 7(e); and
(f) this Agreement may be supplemented or amended from time to time
pursuant to Section 25.
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 Preferred Stock or any
other securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof (except as provided in Section 7(f)), or to give or withhold
consent to any corporate action (except as provided in Section 7(f)) or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 24), 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.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The
Corporation also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or failed to be done by the Rights Agent in connection with the acceptance
and administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability relating to the Rights or this Rights
Agreement.
(b) The Rights Agent shall be protected against, and shall incur no
liability for or in respect of, any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock or for other securities of
the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons. In addition, anything in this Rights Agreement to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential damages of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
SECTION 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF, THE
RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this Rights
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 Rights
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.
SECTION 20. DUTIES OF THE RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Corporation and the holders of Right
Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may also be
legal counsel for the Corporation), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Corporation prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board, the
President or any Vice President and by the Treasurer or the Secretary of the
Corporation and delivered to the Rights Agent. Any such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
(except the due execution by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Corporation of any covenant or
condition contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or 13 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President or any Vice President or the Secretary or
the Treasurer of the Corporation, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not the Rights Agent under this Rights Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Corporation or for
any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days notice in writing mailed to the Corporation and to
each transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Corporation may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon 30 days notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a successor
to the Rights Agent. Notwithstanding the foregoing provisions of this Section
21, in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Corporation shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Corporation), then the incumbent Rights
Agent or the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Corporation or by such a court, shall be
(a) a Person organized and doing business under the laws of the United States or
of any state thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination in the conduct of its corporate trust or stock transfer business
by federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $5,000,000 or (b) an
Affiliate controlled by a Person described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed, but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Corporation shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Corporation shall have the authority to act as the Rights Agent until
a successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Rights Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Rights
Agreement.
SECTION 23. REDEMPTION OR EXCHANGE.
(a) The Corporation may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than all of the then
outstanding Rights, at any time prior to the Close of Business on the tenth day
following the Stock Acquisition Date (subject to extension by the Corporation as
provided in Section 25) at a redemption price of $0.01 per Right, subject to
adjustments as provided in subsection (c) below (the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable pursuant to Section 11(a)(ii) prior to the expiration
of the Corporation's right of redemption hereunder.
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time of the action of the
Board of Directors ordering the redemption of the Rights and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within ten days after the effective time of the action of the Board of Directors
ordering the redemption of the Rights, the Corporation shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each notice of redemption will state the method by which
the payment of the Redemption Price will be made. At the option of the Board of
Directors, the Redemption Price may be paid in cash to each Rights holder or by
the issuance of shares (and, at the Corporation's election pursuant to Section
14(b), cash or depositary receipts in lieu of fractions of shares other than
fractions which are integral multiples of one one-thousandth (1/100) of a share)
of Preferred Stock having a Fair Market Value equal to such cash payment.
(c) In the event the Corporation shall at any time after the date of
this Rights Agreement (A) pay any dividend on Common Stock in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares, (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock or (D) issue any shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Corporation is the
continuing or surviving Corporation), then, and in each such event, the
Redemption Price shall be adjusted so that the Redemption Price after such event
shall equal the Redemption Price immediately prior to such event multiplied 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 outstanding immediately prior to such event;
provided, however, that in each case such adjustment to the Redemption Price
shall be made only if the amount of the Redemption Price shall be reduced or
increased by at least more or less than $0.01 per Right.
(d) The Board of Directors of the Corporation may, at its option, at
any time after the tenth day following a Stock Acquisition Date and prior to the
time that an Acquiring Person becomes the Beneficial Owner of more than 50% of
the outstanding Voting Stock of the Corporation, elect to exchange all (but not
less than all) of the then outstanding Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that an event of a type analogous to any of the events
described in Section 11 shall have occurred with respect to the Common Stock
(such exchange ratio, as adjusted from time to time, being hereinafter referred
to as the "Exchange Ratio").
(e) Immediately upon the action of the Board of Directors of the
Corporation electing to exchange the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive a number of shares of
Common Stock equal to the Exchange Ratio. Promptly after the action of the Board
of Directors electing to exchange the Rights, the Corporation shall give notice
thereof (specifying the steps to be taken to receive shares of Common Stock in
exchange for Rights) to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice in accordance with Section 28(a).
SECTION 24. NOTICE OF PROPOSED ACTIONS.
(a) In case the Corporation, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
11(g) or (ii) to offer to the holders of record of its Common Stock options,
warrants, or other rights to subscribe for or to purchase shares of Common Stock
(including any security convertible into or exchangeable for Common Stock) or
shares of stock of any class or any other securities, options, warrants,
convertible or exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock or Common Stock or any recapitalization
or reorganization of the Corporation, or (iv) to effect any consolidation or
merger with or into, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to, any other Person or
Persons, or (v) to effect the liquidation, dissolution or winding up of the
Corporation, then, in each such case, the Corporation shall give to each holder
of record of a Right Certificate, in accordance with Section 28(a), notice of
such proposed action, which shall specify the record date for the purposes of
such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least ten days prior
to the record date for determining holders of record of the Preferred Stock for
purposes of such action, and in the case of any such other action, at least ten
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Common Stock or Preferred
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 24 or any defect therein shall not affect the legality or validity
of the action taken by the Corporation or the vote upon any such action.
(b) In case any of the transactions referred to in Section 11(a)(i),
11(g) or 13 of this Rights Agreement are proposed, then, in any such case, the
Corporation shall give to each holder of Rights, in accordance with Section
28(a), notice of the proposal of such transaction at least ten days prior to
consummating such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section 11(a)(i), 11(g)
or 13, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
SECTION 25. SUPPLEMENTS AND AMENDMENTS. For as long as the Rights
are then redeemable, the Corporation may in its sole and absolute discretion,
and the Rights Agent shall if the Corporation so directs, supplement or amend
any provision of this Agreement without the approval of any holders of the
Rights. At any time when the Rights are not then redeemable, the Corporation
may, and the Rights Agent shall if the Corporation so directs, supplement or
amend this Rights Agreement without the approval of any holders of Right
Certificates (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein or (iii) to change or supplement the provisions hereunder in
any manner which the Corporation may deem necessary or desirable, provided that
no such supplement or amendment pursuant to this clause (iii) shall materially
adversely affect the interest of the holders of Right Certificates. Upon the
delivery of a certificate from an appropriate officer of the Corporation which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 25, the Rights Agent shall execute such supplement or amendment.
SECTION 26. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS OF
THE CORPORATION, ETC. The Board of Directors of the Corporation shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Corporation, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend the
Agreement and whether any proposed amendment materially adversely affects the
interests of the holders of Right Certificates). For all purposes of this
Agreement, any calculation of the number of shares of Common Stock or other
securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
or any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Corporation, the Rights Agent, the holders
of the Rights and all other parties, and (y) not subject the Board to any
liability to the holders of the Rights.
SECTION 27. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Corporation, the Rights Agent and the holders
of record of the Right Certificates (and, prior to the Distribution Date, the
holders of Common Stock in their capacity as holders of the Rights).
SECTION 28. MISCELLANEOUS.
(a) NOTICES. Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Corporation shall be 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:
Cosi, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Corporation or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Corporation) as
follows:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Dept.
Re: Cosi, Inc.
Notices or demands authorized by this Rights Agreement to be given
or made by the Corporation or the Rights Agent to the holder of record of any
Right Certificate or Right shall be 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 Corporation.
(b) SUCCESSORS. All of the covenants and provisions of this Rights
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
(c) DELAWARE CONTRACT. This Rights Agreement and each Right
Certificate issued hereunder hall be deemed to be a contract made under the laws
of the State of Delaware and for all purposes shall be governed by and construed
and enforced in accordance with the laws of such state applicable to contracts
to be made and performed entirely within such state.
(d) COUNTERPARTS. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
(e) DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions.
(f) SEVERABILITY. If any term, provision, covenant or restriction of
this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
COSI, INC.
By
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Name:
Title:
AMERICAN STOCK TRANSFER AND TRUST
By
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Name:
Title:
EXHIBIT A
FORM OF
Exhibit A
to Amended and Restated Certificate of Incorporation
of COSI, INC.
SERIES D PREFERRED STOCK
----------------------------------------------------
One million (1,000,000) shares of the Corporation's Preferred Stock shall
be designated as "Series D Preferred Stock", One Cent ($01) par value per share
(the "Series D Preferred Stock") and the number of shares constituting such
series shall be 1,000,000.
SECTION 1. DIVIDENDS AND DISTRIBUTIONS.
1A Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series D Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on the common stock of the Corporation, $0.01 par
value per share, of the Corporation (collectively, the "Common Stock") and (ii)
a preferential cash dividend (the "Preferential Dividends"), if any, in
preference to the holders of Common Stock, on the first day of February, May,
August and November of each year (each 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 D Preferred Stock, payable in an
amount (except in the case of the first Quarterly Dividend Payment if the date
of the first issuance of Series D Preferred Stock is a date other than a
Quarterly Dividend Payment date, in which case such payment shall be a prorated
amount of such amount) equal to $0.10 per share of Series D Preferred Stock less
the per share amount of all cash dividends declared on the Series D Preferred
Stock pursuant to clause (i) of this sentence 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 D Preferred Stock. In the event the Corporation shall, at any time after
the issuance of any share or fraction of a share of Series D Preferred Stock,
make any distribution on the shares of Common Stock of the Corporation, whether
by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Corporation or otherwise, which is
payable in cash or any debt security, debt instrument, real or personal property
or any other property (other than cash dividends subject to the immediately
preceding sentence, a distribution of shares of Common Stock or other capital
stock of the Corporation or a distribution of rights or warrants to acquire any
such share, including any debt security convertible into or exchangeable for any
such share, at a price less than the Fair Market Value (as hereinafter defined)
of such share), then, and in each such event, the Corporation shall
simultaneously pay (and not be permitted to accrue) on each then outstanding
share of Series D Preferred Stock of the Corporation a distribution, in like
kind, of 100 times such distribution paid on a share of Common Stock (subject to
the provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series D Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred to as
"Dividends" and the multiple of such cash and non-cash dividends on the Common
Stock applicable to the determination of the Dividends, which shall be 100
initially but shall be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Dividend Multiple." In the event the Corporation
shall at any time after November 21, 2002 (the "Rights Declaration Date"), (i)
declare or pay any dividend or make any distribution on Common Stock payable in
shares of Common Stock, (ii) effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, or (iii) issue any shares of
its capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving Corporation), then in each such case
the Dividend Multiple thereafter applicable to the determination of the amount
of Dividends which holders of shares of Series D Preferred Stock shall be
entitled to receive shall be the Dividend Multiple applicable immediately prior
to such event multiplied 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.
1B. The Corporation shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series D Preferred
Stock.
1C. Preferential Dividends shall begin to accrue on outstanding shares of
Series D Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issuance of any shares of Series D Preferred Stock. Accrued but
unpaid Preferential Dividends shall cumulate but shall not bear interest.
Preferential Dividends paid on the shares of Series D 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.
SECTION 2. VOTING RIGHTS. The holders of shares of Series D Preferred Stock
shall have the following voting rights:
2A. Subject to the provisions for adjustment hereinafter set forth, each
share of Series D Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the holders of the Common Stock. The
number of votes which a holder of Series D Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple." In the event the Corporation
shall at any time after the Rights Declaration Date, (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii) effect a
subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, or (iii) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is the
continuing or surviving Corporation), then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes per share to
which holders of shares of Series D Preferred Stock shall be entitled after such
event shall be the Vote Multiple immediately prior to such event multiplied 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.
2B. Except as otherwise provided herein, in the Amended and Restated
Certificate of Incorporation or By-laws, the holders of shares of Series D
Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of shareholders of the Corporation.
2C. In the event that the Preferred Dividends accrued on the Series D
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or irrevocably set aside for
payment, the holders of record of Junior Preferred Stock of the Corporation of
all series (including the Series D Preferred Stock), other than any series in
respect of which such right is expressly withheld by the Amended and Restated
Certificate of Incorporation or the authorizing resolutions included in any
Certificate of Designations therefor, shall have the right, at the next meeting
of shareholders called for the election of directors, to elect two members to
the Board of Directors, which directors shall be in addition to the number
required by the By-laws prior to such event, to serve until the next Annual
Meeting and until their successors are elected and qualified or their earlier
resignation, removal or incapacity or until such earlier time as all accrued and
unpaid Preferential Dividends upon the outstanding shares of Series D Preferred
Stock shall have been paid (or irrevocably set aside for payment) in full. The
holders of shares of Series D Preferred Stock shall continue to have the right
to elect directors as provided by the immediately preceding sentence until all
accrued and unpaid Preferential Dividends upon the outstanding shares of Series
D Preferred Stock shall have been paid (or irrevocably set aside for payment) in
full. Such directors may be removed and replaced by such shareholders, and
vacancies in such directorships may be filled only by such shareholders (or by
the remaining director elected by such shareholders, if there be one) in the
manner permitted by law; provided, however, that any such action by shareholders
shall be taken at a meeting of shareholders and shall not be taken by written
consent thereto.
2C. Except as otherwise required by the Amended and Restated Certificate
of Incorporation or By-laws or set forth herein, holders of Series D Preferred
Stock shall have no other 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 the taking of any corporate action.
SECTION 3. CERTAIN RESTRICTIONS.
3A. Whenever Preferential Dividends or Dividends are in arrears or the
Corporation shall be in default of payment thereof, thereafter and until all
accrued and unpaid Preferential Dividends and Dividends, whether or not
declared, on shares of Series D Preferred Stock outstanding shall have been paid
or set irrevocably aside for payment in full, and in addition to any and all
other rights which any holder of shares of Series D Preferred Stock may have in
such circumstances, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration,
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series D
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity as to dividends with
the Series D Preferred Stock, unless dividends are paid
ratably on the Series D 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 if the full dividends accrued
thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this paragraph
3A., redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series D Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (both as to dividends and
upon liquidation, dissolution or winding up) to the Series D
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series D Preferred Stock, or any shares of stock ranking on a
parity with the Series D Preferred Stock (either as to
dividends or upon liquidation, dissolution or winding up),
except in accordance with a purchase offer made 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.
3B. The Corporation shall not permit any Subsidiary (as hereinafter
defined) 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 3, purchase or otherwise acquire such shares at
such time and in such manner. A "Subsidiary" of the Corporation shall mean any
Corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the board of
directors of such Corporation or other entity or other persons performing
similar functions are beneficially owned, directly or indirectly, by the
Corporation or by any Corporation or other entity that is otherwise controlled
by the Corporation.
3C. The Corporation shall not issue any shares of Series D Preferred
Stock except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of November 21, 2002, between the Corporation and American
Stock transfer and Trust Company, as Rights Agent, a copy of which is on file
with the Secretary of the Corporation at its principal executive office and
shall be made available to shareholders of record without charge upon written
request therefor addressed to said Secretary. Notwithstanding the foregoing
sentence, nothing contained in the provisions shall prohibit or restrict the
Corporation from issuing for any purpose any series of Preferred Stock with
rights and privileges similar to, different from, or greater than, those of the
Series D Preferred Stock.
SECTION 4. REACQUIRED SHARES. Any shares of Series D 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
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
SECTION 5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series D Preferred Stock unless the holders of shares of Series D Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$100 per one one-hundredth (1/100) share plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment or, (B) if greater than the amount specified in clause (i)(A) of
this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be adjusted as
hereinafter provided and (ii) to the holders of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series D Preferred Stock, unless
simultaneously therewith distributions are made ratably on the Series D
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series D Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series D Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Corporation pursuant
to clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Corporation applicable pursuant to said clause
to the determination of the Participating Liquidation Amount, as said multiple
may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Liquidation Multiple." In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any dividend on
Common Stock payable in shares of Common Stock, (ii) effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding shares
of Common Stock into a greater or lesser number of shares of Common Stock, or
(iii) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Corporation is continuing or surviving Corporation), then,
in each such case, the Liquidation Multiple thereafter applicable to the
determination of the Participating Liquidation Amount to which holders of Series
D Preferred Stock shall be entitled after such event shall be the Liquidation
Multiple applicable immediately prior to such event multiplied 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 6. CERTAIN RECLASSIFICATION AND OTHER EVENTS.
6A. In the event that holders of shares of Common Stock of the
Corporation receive after the Rights Declaration Date, in respect of their
shares of Common Stock any share of capital stock of the Corporation (other than
any share of Common Stock of the Corporation), whether by way of
reclassification, recapitalization, reorganization, dividend or other
distribution or otherwise (a "Transaction"), then, and in each such event, the
dividend rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Corporation of the shares of Series D Preferred Stock shall be
adjusted so that after such event the holders of Series D Preferred Stock shall
be entitled, in respect of each share of Series D Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such adjustment, to (i) such additional dividends as equal
the Dividend Multiple in effect immediately prior to such Transaction multiplied
by the additional dividends which the holder of a share of Common Stock shall be
entitled to receive by virtue of the receipt in the Transaction of such capital
stock, (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such Transaction multiplied by the additional voting rights
which the holder of a share of Common Stock shall be entitled to receive by
virtue of the receipt in the Transaction of such capital stock and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Corporation as equal the Liquidation Multiple in effect immediately prior to
such Transaction multiplied by the additional amount which the holder of a share
of Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Corporation by virtue of the receipt in the Transaction of
such capital stock, as the case may be, all as provided by the terms of such
capital stock.
6B. In the event that holders of shares of Common Stock of the
Corporation receive after the Rights Declaration Date, in respect of their
shares of Common Stock any right or warrant to purchase Common Stock (including
as such a right, for all purposes of this paragraph, any security convertible
into or exchangeable for Common Stock) at a purchase price per share less than
the Fair Market Value of a share of Common Stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the Corporation of
the shares of Series D Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
6C. In the event that holders of shares of Common Stock of the
Corporation receive after the Rights Declaration Date, in respect of their
shares of Common Stock any right or warrant to purchase capital stock of the
Corporation (other than shares of Common Stock), including as such a right, for
all purposes of this paragraph, any security convertible into or exchangeable
for capital stock of the Corporation (other than Common Stock), at a purchase
price per share less than the Fair Market Value of such shares of capital stock
on the date of issuance of such right or warrant, then and in each such event
the dividend rights, voting rights and rights upon liquidation, dissolution or
winding up of the Corporation of the shares of Series D Preferred Stock shall
each be adjusted so that after such event each holder of a share of Series D
Preferred Stock shall be entitled, in respect of each share of Series D
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such event multiplied, first, by the additional dividends to which the holder
of a share of Common Stock shall be entitled upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction (as hereinafter defined)
and (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such event multiplied, first, by the additional voting
rights to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction and
(iii) such additional distributions upon liquidation, dissolution or winding up
of the Corporation as equal the Liquidation Multiple in effect immediately prior
to such event multiplied, first, by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon liquidation, dissolution
or winding up of the Corporation upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction. For purposes of this paragraph, the
"Discount Fraction" shall be a fraction the numerator of which shall be the
difference between the Fair Market Value of a share of the capital stock subject
to a right or warrant distributed to holders of shares of Common Stock of the
Corporation as contemplated by this paragraph immediately after the distribution
thereof and the purchase price per share for such share of capital stock
pursuant to such right or warrant and the denominator of which shall be the Fair
Market Value of a share of such capital stock immediately after the distribution
of such right or warrant.
6D. For purposes of this Exhibit A, the "Fair Market Value" of a share of
capital stock of the Corporation (including a share of Common Stock) on any date
shall be deemed to be the average of the daily closing price per share thereof
over the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that, in the event that such
Fair Market Value of any such share of capital stock is determined during a
period which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on stock payable in shares of
such stock or securities convertible into shares of such stock, or (ii) the
effective date of any subdivision, split, combination, consolidation, reverse
stock split or reclassification of such stock, then, and in each such case, the
Fair Market Value shall be appropriately adjusted by the Board of Directors of
the Corporation to take into account ex-dividend or post-effective date trading.
The closing price for any day shall be the last sale price, regular way, or, in
case, no such sale takes place on such day, the average of the closing bid and
asked prices, regular way as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the shares are listed or admitted to trading or, if the shares
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or if on any such date the shares 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 shares selected
by the Board of Directors of the Corporation. The term "Trading Day" shall mean
a day on which the principal national securities exchange on which the shares
are listed or admitted to trading is open for the transaction of business or, if
the shares are not listed or admitted to trading on any national securities
exchange, on which the New York Stock Exchange or such other national securities
exchange as may be selected by the Board of Directors of the Corporation is
open. If the shares are not publicly held or not so listed or traded on any day
within the period of 30 Trading Days applicable to the determination of Fair
Market Value thereof as aforesaid, "Fair Market Value" shall mean the fair
market value thereof per share as determined in good faith by the Board of
Directors of the Corporation. In either case referred to in the foregoing
sentence, the determination of Fair Market Value shall be described in a
statement filed with the Secretary of the Corporation.
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 outstanding share of
Series D Preferred Stock shall at the same time be similarly exchanged for or
changed into the aggregate amount of stock, securities, cash and/or other
property (payable in like kind), as the case may be, for which or into which
each share of Common Stock is changed or exchanged multiplied by the highest of
the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
SECTION 8. EFFECTIVE TIME OF ADJUSTMENTS.
a. Adjustments to the Series D Preferred Stock required by the provisions shall
be effective as of the time at which the event requiring such adjustments
occurs.
(B) The Corporation shall give prompt written notice to each holder of a share
of Series D Preferred Stock of the effect of any adjustment to the voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the Corporation of such shares required by the provisions. Notwithstanding the
foregoing sentence, the failure of the Corporation to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.
SECTION 9. NO REDEMPTION. The shares of Series D Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation may
acquire shares of Series D Preferred Stock in any other manner permitted by law,
the provisions and the Amended and Restated Certificate of Incorporation of the
Corporation.
SECTION 10. RANKING. Unless otherwise provided in the Amended and Restated
Certificate of Incorporation of the Corporation or a Certificate of Designations
relating to a subsequent series of preferred stock of the Corporation, the
Series D Preferred Stock shall rank junior to all other series of the
Corporation's preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and senior to
the Common Stock.
SECTION 11. AMENDMENT. The hereof and the Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series D Preferred
Stock without, in addition to any other vote of shareholders required by law,
the affirmative vote of the holders of 67% or more of the outstanding shares of
Series D Preferred Stock, voting together as a single class. This Section 11
shall not be amended in any manner without the affirmative vote of the holders
of 67% or more of the outstanding shares of Series D Preferred Stock, voting
together a size class.
EXHIBIT B
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS
ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL
AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
COSI, INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES D PREFERRED STOCK
o On the Board of Directors of Cosi, Inc. (the "Corporation")
has declared a dividend distribution of one Preferred Stock
Purchase Right (a "Right") for each outstanding share of
common stock, par value $0.01 per share (collectively, the
"Common Stock"), of the Corporation held by stockholders of
record on the date of the Corporation's initial public
offering.
o Each Right entitles the registered holder to purchase from the
Corporation one one-hundredth (1/100) of a share of preferred
stock of the Corporation, designated as Series D Preferred
Stock (the "The Series D Preferred Stock") at a price of $100
per one one-hundredth (1/100) of a share (the "Exercise
Price").
o The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the
Corporation and American Stock transfer and Trust Company as
Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to shareholders and the Rights will automatically
trade with the Common Stock.
1. Initially Rights are not Exercisable; Rights Initially Not
Represented by a Certificate. Initially, the Rights will not be exercisable,
will not be represented by a separate certificate, and will not be transferable
apart from the Common Stock. Instead, Rights will be evidenced, (i) with respect
to any of the shares of Common Stock held in uncertificated book entry form (a
"Book Entry") outstanding as of the Record Date, by such Book Entry and (ii)
with respect to the shares of Common Stock evidenced by Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificate, together with a copy of this Summary of Rights.
The Rights Agreement provides that until the Rights Distribution
Date, the Rights will be transferred with and only with the Common Stock. Until
the Rights Distribution Date (or earlier redemption or expiration of the
Rights), Common Stock certificates will contain a legend incorporating the
Rights Agreement by reference. Until the Rights Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Common Stock certificates will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
2. When Rights Become Exercisable; Rights Distribution Date - The
Rights become exercisable (unless earlier redeemed) by each record holder of
Rights, other than the Acquiring Person (as defined below), upon the close of
business on the day (the "Rights Distribution Date") which is the earlier of:
(i) the tenth day following the first date (the "Stock Acquisition
Date") on which there is a public announcement that a person or group of
affiliated or associated persons, with certain exceptions set forth below, has
acquired beneficial ownership of 15% or more of the outstanding voting stock of
the Corporation (an "Acquiring Person") or such earlier or later date (not
beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may determine; and
(ii) the tenth business day (or such later date as may be determined
by the Corporation's Board of Directors prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person) after the
date of the commencement or announcement of a person's or group's intention to
commence or engage in a tender or exchange offer the consummation of which would
result in the ownership of 15% or more of the Corporation's outstanding voting
stock (even if no shares are actually purchased pursuant to such offer);
An Acquiring Person does not include (A) the Corporation, (B) any
subsidiary of the Corporation, (C) any employee benefit plan or employee stock
plan of the Corporation or of any subsidiary of the Corporation, or any trust or
other entity organized, appointed, established or holding Common Stock for or
pursuant to the terms of any such plan, (D) any existing shareholder of the
Corporation as of the Record Date, or (E) any person or group whose ownership of
15% or more of the shares of voting stock of the Corporation then outstanding
results solely from (i) any action or transaction or transactions approved by
the Corporation's Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Corporation pursuant to a transaction or
transactions approved by the Corporation's Board of Directors (provided that any
person or group that does not become an Acquiring Person by reason of clause (i)
or (ii). For purposes of the foregoing, outstanding voting stock of the
Corporation includes voting stock that trades on a "when issued" basis on a
national securities exchange (such as the NYSE), on the National Association of
Securities Dealers Automated Quotation System or otherwise.
The Rights Agreement provides that when a person or group of
affiliated or associated persons becomes an Acquiring Person (other than
pursuant to a Qualifying Tender Offer (as defined below)), such Acquiring
Person's Rights will thereupon become null and void.
As soon as practicable following the Rights Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Rights Distribution Date and such separate certificates alone will evidence
the Rights from and after the Rights Distribution Date.
3. Characteristics of Preferred Stock Issuable upon Exercise of
Rights.
o The Series D Preferred Stock is nonredeemable and, unless
otherwise provided in connection with the creation of a
subsequent series of preferred stock, subordinate to any other
series of the Corporation's preferred stock.
o The Series D Preferred Stock may not be issued except upon
exercise of Rights.
o Each share of Series D Preferred Stock will be entitled to
receive when, as and if declared, a quarterly dividend in an
amount equal to the greater of $0.10 per share or 100 times
the cash dividends declared on the Common Stock.
o In addition, Series D Preferred Stock is entitled to 100 times
any non-cash dividends (other than dividends payable in equity
securities) declared on the Common Stock, in like kind.
o In the event of the liquidation of the Corporation, the
holders of Series D Preferred Stock will be entitled to
receive a payment in an amount equal to the greater of $100
per one one-hundredth share or 100 times the payment made per
share of Common Stock. Each share of Series D Preferred Stock
will have 100 votes, voting together with the Common Stock.
o In the event of any merger, consolidation or other transaction
in which Common Stock is changed, exchanged or converted, each
share of Series D Preferred Stock will be entitled to receive
100 times the amount received per share of Common Stock.
o The rights of Series D Preferred Stock as to dividends,
liquidation and voting are protected by anti-dilution
provisions.
o If the dividends accrued on the Preferred Stock for four or
more quarterly dividend periods, whether consecutive or not,
shall not have been declared and paid or irrevocably set aside
for payment, the holders of record of Preferred Stock of the
Corporation of all series (including the Series D Preferred
Stock) will have the right to elect two members to the
Corporation's Board of Directors.
o Fractions of shares of Series D Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of
a share) may, at the election of the Corporation, be evidenced
by depositary receipts.
o The Corporation may also issue cash in lieu of fractional
shares which are not integral multiples of one one-hundredth
of a share.
4. Merger or Other Business Combination following Rights
Distribution Date.
o In the event that, at any time on or after the Rights
Distribution Date:
(i) the Corporation were to be acquired in a merger or other
business combination (in which any shares of Common Stock are changed or
converted into or exchanged for other securities or assets); or
(ii) more than 50% of the assets or earning power of the Corporation
and its subsidiaries (taken as a whole) were to be sold or transferred in one or
a series of related transactions, the Rights Agreement provides that (unless the
Rights have been redeemed) proper provision will be made so that each holder of
record of a Right, other than the Acquiring Person, will from and after such
date have the right to receive, upon payment of the Exercise Price, that number
of shares of common stock of the acquiring Corporation having a market value at
the time of such transaction equal to two times the Exercise Price.
o In addition, unless the Rights are earlier redeemed, in the
event that a person or group becomes the beneficial owner of
15% or more of the Corporation's voting stock (other than
pursuant to a tender or exchange offer (a "Qualifying Tender
Offer") for all outstanding shares of Common Stock that is
approved by the Board of Directors, after taking into account
the long-term value of the Corporation and all other factors
they consider relevant), the Rights Agreement provides that
proper provision will be made so that each holder of record of
a Right, other than the Acquiring Person, will thereafter have
the right to receive, upon payment of the Exercise Price, that
number of shares of the Series D Preferred Stock having a
market value at the time of the transaction equal to two times
the Exercise Price (such market value to be determined with
reference to the market value of the Common Stock as provided
in the Rights Agreement).
5. Redemption or Exchange of Rights. At any time on or prior to the
close of business on the tenth day after the time that a person has become an
Acquiring Person (or such later date as may be determined by a majority of the
Board of Directors), the Corporation may redeem the Rights in whole, but not in
part, at a price of $0.0l per Right, subject to adjustment (the "Redemption
Price"). Immediately upon the effective time of the action of the Board of
Directors of the Corporation authorizing redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
In addition, the Board of Directors of the Corporation may, at its
option, at any time after the tenth day following a Stock Acquisition Date and
prior to the time that an Acquiring Person becomes the Beneficial Owner of more
than 50% of the outstanding shares of the voting stock of the Corporation, elect
to exchange all (but not less than all) of the then outstanding Rights (other
than Rights owned by the Acquiring Person or any affiliate or associate thereof,
which Rights become void) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date of the
Distribution Date (the "Exchange Ratio"). Immediately upon such action by the
Board of Directors (the "Exchange Time"), the right to exercise the Rights will
terminate and each Right will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio.
6. Adjustment of Shares of Preferred Stock Issuable upon Exercise of
Rights. The number of shares of Series D Preferred Stock issuable upon exercise
of the Rights is subject to certain adjustments from time to time in the event
of a stock dividend on, or a subdivision, combination or issuance of capital
stock in a reclassification of, the Common Stock. The Exercise Price for the
Rights is subject to adjustment in certain circumstances, including certain
distributions of cash or other property to holders of Common Stock.
7. Amendment of Rights. For as long as the Rights are then
redeemable, the Corporation may amend the Rights in any manner, including an
amendment to extend the time period in which the Rights may be redeemed. At any
time when the Rights are not then redeemable, the Corporation may amend the
Rights in any manner that does not materially adversely affect the interests of
holders of the Rights as such.
8. No Rights as Stockholder until a Right is Exercised. Until a
Right is exercised, the holder, as such, will have no rights as a stockholder of
the Corporation, including, without limitation, the right to vote or to receive
dividends. Holders of Common Stock may, depending upon the circumstances,
recognize taxable income should the Rights become exercisable or upon the
occurrence of certain events thereafter.
9. Expiration of Rights - The Rights will expire (the "Expiration
Time") (unless earlier redeemed):
(i) at the close of business on November 21, 2012 or
(ii) if the Rights Distribution Date (as defined below) shall have
occurred before November 21, 2012, at the close of business on the 90th day
following the Rights Distribution Date, provided that the Board of Directors of
the Corporation does not extend or otherwise modify the Rights. There can be no
assurance, however, as to whether or not the Board of Directors will so extend,
modify or redeem the Rights.
10. Copy of Rights Agreement. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement which is incorporated in this summary description herein by
reference and any differences between this summary description and the Rights
Agreement shall in all cases be interpreted by the Rights Agreement.
EXHIBIT C
Form of Right Certificate
Certificate No. W- _______________Rights
NOT EXERCISABLE AFTER (I) November 21, 2012, OR (II) IF THE
DISTRIBUTION DATE (AS DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE
DATE SPECIFIED IN CLAUSE (I), THE DATE WHICH IS NINETY (90) DAYS
AFTER THE DISTRIBUTION DATE, OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION AND UNDER
CERTAIN OTHER CIRCUMSTANCES, AT $0.0l PER RIGHT (SUBJECT TO
ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS
AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE
TRANSFERRED TO ANY PERSON.
Right Certificate
COSI, 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 2002 (the "Rights Agreement") between Cosi, Inc., a
Delaware corporation (the "Corporation"), and American Stock transfer and Trust
Company as Rights Agent (the "Rights Agent"), to purchase from the Corporation
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York City time) on (i) November 21, 2012
(or if the Distribution Date shall have occurred before November 21, 2012, the
date which is 90 days after the Distribution Date) at the office of the Rights
Agent designated in the Rights Agreement for such purpose, or its successor as
Rights Agent, in New York City, one one-hundredth (1/100) of a fully paid
nonassessable share of Series D Preferred Stock (the "Preferred Stock") of the
Corporation at a purchase price of $100 as the same may from time to time be
adjusted in accordance with the Rights Agreement (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and the
number of shares of Preferred Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are incorporated herein by reference and made a part and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Corporation and the holders of record of Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the
Corporation.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office of the Rights Agent designated in the Rights
Agreement for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
of record to purchase a like aggregate number of shares of Preferred Stock as
the Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender,
another Right Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at its option
or under certain other circumstances at a redemption price of $0.0l per Right.
No fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth (1/100) of a share) are required to
be issued upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof the Corporation may cause depository receipts to be issued and/or a cash
payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Corporation which may at any time be
issuable on the exercise, nor shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder, as such, any of the rights of
a stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at a meeting thereof, or
to give or withhold consent to any corporate action or to receive notice of
meetings or other actions affecting shareholders (except as 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
Corporation and its corporate seal. Dated as of ______________________,
___________.
ATTEST: COSI, INC.
_______________________________________ By:____________________________________
Secretary Title:
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 Certificates.)
FOR VALUE RECEIVED _____________________________________ hereby
sells, assigns and transfers unto ______________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint [_________]
Attorney to transfer the within Right Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated: _____________, _____
_________________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
or transferred by or on behalf of a Person who is or was an Acquiring Person or
an Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated: _____________, _____
_________________________________________
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO COSI, INC.:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) be issued in the following:
name :
Please insert social security
or other identifying number: ___________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: ___________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: _________________, _____
_________________________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the
fact of this Right Certificate)
Signature Guaranteed: