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MFB CORP.
and
REGISTRAR AND TRANSFER COMPANY
Rights Agent
RIGHTS AGREEMENT
Dated as of October 2, 2006
29
TABLE OF CONTENTS
Page
Section 1. Certain definitions.............................................1
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Section 2. Appointment of Rights Agent.....................................4
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Section 3. Issue of Right Certificates.....................................4
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Section 4. Form of Right Certificates................... ..................5
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Section 5. Countersignature and Registration...............................5
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Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
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Certificates....................................................6
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...7
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Section 8. Cancellation and Destruction of Right Certificates..............8
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Section 9. Availability of Common Shares...................................8
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Section 10. Common Shares Record Date.......................................9
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Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights.........................................................9
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Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....16
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.........................................................17
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Section 14. Fractional Rights and Fractional Shares........................19
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Section 15. Rights of Action...............................................19
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Section 16. Agreement of Right Holders.....................................20
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Section 17. Right Certificate Holder Not Deemed a Shareholder..............20
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Section 18. Concerning the Rights Agent....................................20
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Section 19. Merger or Consolidation or Change of Name of Rights Agent......21
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Section 20. Duties of Rights Agent.........................................21
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Section 21. Change of Rights Agent.........................................23
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Section 22. Issuance of New Right Certificates.............................24
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Section 23. Redemption.....................................................24
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Section 24. Exchange.......................................................25
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Section 25. Notice of Certain Events.......................................26
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Section 26. Notices........................................................27
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Section 27. Supplements and Amendments.....................................27
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Section 28. Successors.....................................................28
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Section 29. Benefits of this Agreement.....................................28
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Section 30. Severability...................................................28
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Section 31. Governing Law..................................................28
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Section 32. Counterparts...................................................28
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Section 33. Descriptive Headings...........................................28
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RIGHTS AGREEMENT
This AGREEMENT, dated as of October 2, 2006, between MFB CORP., an
Indiana corporation (the "Corporation"), and REGISTRAR AND TRANSFER COMPANY
(the "Rights Agent").
WHEREAS, the Board of Directors of the Corporation has authorized and
declared a dividend distribution of one Common Share Purchase Right (hereinafter
referred to as a "Right") for each Common Share (as hereinafter defined) of the
Corporation outstanding and held of record as of the Close of Business (as
hereinafter defined) on October 21, 2006 (the "Record Date"), each Right
representing the right to purchase one Common Share upon the terms and subject
to the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1.........Certain definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
--------------------------------------
(a) "Acquiring Person" shall mean (i) any Person (other than the
Corporation or any Related Person), who or which, together
with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the Beneficial
Owner of 12% or more of the Common Shares then outstanding, or
(ii) any Adverse Person; provided, however, that a Person
shall not be deemed to have become an Acquiring Person solely
as a result of a reduction in the number of Common Shares
outstanding, unless subsequent to such reduction such Person
or any Affiliate or Associate of such Person shall become the
Beneficial Owner (as such term is hereinafter defined) of any
additional Common Shares other than as a result of a stock
dividend, stock split or similar transaction effected by the
Corporation in which all shareholders are treated equally.
(b) "Adverse Person" shall mean any Person declared to be an Adverse
Person by the Board of Directors upon (i) a determination
by the Board of Directors, at any time after the date of this
Agreement, that such Person, alone or together with its
Affiliates and Associates (as such terms are hereinafter defined),
has become, or has announced an intention to become, in
one or more transactions, the Beneficial Owner (as such term is
hereinafter defined) of a number of Common Shares which the
Board of Directors determines to be substantial (which amount shall
in no event be less than 10% of the Common Shares then
outstanding) and a determination by at least a majority of the Board
of Directors who are not officers of the Corporation,
after reasonable inquiry and investigation, including consultation
with such persons as such directors shall deem
appropriate, that (A) such Beneficial Ownership by such Person (1)
is intended to cause the Corporation to repurchase the
Common Shares beneficially owned by such Person, (2) is intended or
may reasonably be anticipated to cause pressure on the
Corporation to take action or enter into a transaction or series of
transactions to provide such Person with short-term
financial gain under circumstances in which the Board of Directors
determines that the best long-term interests of the
Corporation and its shareholders would not be served by taking such
action or entering into such transactions or series of
transactions at that time, or (3) is intended or may reasonably be
anticipated to permit such Person to acquire control of
or a controlling influence over the Corporation, as a result of such
Beneficial Ownership or one or more subsequent actions
or transactions, in a manner or pursuant to one or more actions or
transactions that the Board determines to be unfair or
coercive to shareholders, or (B) such Beneficial Ownership is
causing or may reasonably be anticipated to cause a material
adverse impact on the business, financial condition or prospects of
the Corporation (including, without limitation, the
Corporation's ability to maintain its competitive position).
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such person's Affiliates or
Associates beneficially owns, directly or indirectly,
(ii) which such person or any of such person's Affiliates or Associates has
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however,
that a person shall not 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 or
dispose of pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated
by the proviso to Section 1(d)(ii)(B) hereof) or disposing of
any securities of the Corporation; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if such beneficial ownership
arises solely as a result of such Person's status as a
"clearing agency," as defined in Section 3(a)(23) of the
Exchange Act.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Corporation, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which the NASDAQ Stock Market (the "NASDAQ") or banking
institutions in the State of Indiana are authorized or obligated by law
or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., eastern
standard time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., eastern standard time, on
the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Corporation shall mean
the shares of common stock, without par value, of the Corporation;
provided, however, that if the Corporation is the continuing or
surviving corporation in a transaction described in Section 11(a)(ii)
or Section 13(6)(b), "Common Shares" when used with reference to the
"Corporation" shall mean the capital stock or equity security with the
greatest aggregate voting power of the Corporation. "Common Shares"
when used with reference to any Person other than the Corporation
(including an Issuer as defined in Section 13 hereof) shall mean the
capital stock or equity security with the greatest voting power of such
other Person.
(h) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth calendar day after the Share
Acquisition Date or (ii) the Close of Business on the tenth business
day (or such later date as may be determined by action
of the Board of Directors prior to such time as any person becomes an
Acquiring Person) after the date of the commencement
by any Person (other than the Corporation or any Related Person), or
of the first public announcement of the intention of
any Person (other than the Corporation or any Related Person), to
commence a tender or exchange offer, the consummation of
which would result in any Person becoming the Beneficial Owner
of Common Shares aggregating 30% or more of the then
outstanding Common Shares (including any such date which is after
the date of this Agreement and prior to the issuance of
the Rights).
(i) "Final Expiration Date" shall have the meaning set forth in Section 7.
(j) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such
entity.
(k) "Purchase Price" shall have the meaning set forth in Section 7.
(l) "Redemption Date" shall have the meaning set forth in Section 7.
(m) "Related Person" shall mean (i) any Subsidiary of the Corporation,
(ii) any employee benefit or stock ownership plan of the
Corporation or any entity holding Common Shares for or pursuant to
the terms of any such plan, (iii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or
his Affiliates and Associates, (iv) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or his
Affiliates or Associates, or any Person who acquires Common
Shares from the Corporation or any other Related Person in one
or a series of related transactions, each of which is
approved by the Board of Directors; provided, however, that if any
Person who becomes a Related Person solely by virtue of
subsection (v) above, or any Affiliate or Associate of such
Person subsequently becomes the Beneficial Owner of any
additional Common Shares in a transaction or transactions not
approved by the Board of Directors, such Person shall no
longer be deemed a "Related Person" with respect to all Common Shares
of which it, or any of its Affiliates or Associates,
is the Beneficial Owner.
(n) "Share Acquisition Date" shall mean the first date of public
announcement by the Corporation or an Acquiring Person that an
Acquiring Person has become such.
(o) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
Section 2.........Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3.........Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates, and
(ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. 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,
postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Distribution Date, at the address
of such holder shown on the records of the Corporation,
a Right Certificate, in substantially the form of Exhibit A hereto
(a "Right Certificate"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates or
brokers' due bills.
(b) On the Record Date, or as soon as practicable thereafter, the
Corporation will send a copy of a Summary of Rights to
Purchase Common Shares, in substantially the form of Exhibit B
hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address
of such holder shown on the records of the Corporation. With respect
to certificates for Common Shares outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of
the holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy of
the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a Rights
Agreement between MFB Corp. and Registrar and Transfer
Company, dated as of October 2, 2006 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive
offices of MFB Corp. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. MFB Corp. will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. As described in
the Rights Agreement, Rights issued to any Person who becomes
an Acquiring Person (as defined in the Rights Agreement) shall
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Corporation purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Corporation
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4.........Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities or stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of Common Shares as shall be
set forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5.........Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Corporation by its Chairman of the Board, its
President, any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Corporation's seal or a
facsimile thereof, and shall be attested by the Secretary or any Assistant
Secretary of the Corporation, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer of the
Corporation who shall have signed any of the Right Certificates shall cease to
be such officer of the Corporation before countersignature by the Rights Agent
and issuance and delivery by the Corporation, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Corporation 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; and any Right Certificate may be signed on behalf of the
Corporation by any person who, at the actual 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.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6.........Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Common Shares as
the Right Certificate or Right Certificates surrendered then entitled each
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
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
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon receipt by the 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, at the Corporation's request,
reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Corporation will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7.........Exercise of Rights; Purchase Price; Expiration Date of Rights
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the
Purchase Price for each Common Share as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on
October 1, 2016 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The "Purchase Price" for each Common Share pursuant to the exercise of
a Right shall initially be $93.00, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall be
payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the Corporation,
the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares certificates
for the number of Common Shares to be purchased and
the Corporation hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from
the depositary agent depositary receipts representing such number
of Common Shares as are to be purchased (in which case
certificates for the Common Shares represented by such receipts shall
be deposited by the transfer agent with the depositary
agent) and the Corporation hereby directs the depositary agent
to comply with such request, (ii) when appropriate,
requisition from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or,
upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of
such Right Certificate.
(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 to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) The Corporation covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Common Shares the
number of Common Shares that will be sufficient to permit the exercise
in full of all outstanding Rights in accordance with this Section 7.
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
so cancel and retire, any other 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, provide the Corporation with a microfiche
copy thereof and destroy such cancelled Right Certificates, and deliver a
certificate of destruction thereof to the Corporation.
Section 9.........Availability of Common Shares.
(a) If the Common Shares issuable and deliverable upon the exercise of
Rights are or become listed on any national securities exchange, the
Corporation shall use its reasonable best efforts to cause, from and
after such time as the Rights become exercisable, all Common Shares
reserved for issuance to be listed on such exchange upon official
notice of issuance upon such exercise. If the Common Shares issuable
and deliverable upon the exercise of Rights are listed on the NASDAQ,
the Corporation shall use its reasonable best efforts to file any
notice relating to the issuance of additional Common Shares with the
NASDAQ required from and after such time as the Rights become
exercisable.
(b) The Corporation shall use its reasonable best efforts to (i) file, as
soon as practicable following the later to occur of an
event described in Section 11(a)(ii)or Section 13 hereof or the
Distribution Date, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the
earlier of the Final Expiration Date or the Redemption Date. 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; provided, however, that the
Corporation may temporarily suspend the exercisability of the
Rights to prepare and file such registration statement and permit it
to become effective and upon any such suspension, the
Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any such provision
of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite
qualification or other registration or compliance requirements in such
jurisdiction shall have been obtained.
(c) The Corporation covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such Common Shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable
shares.
(d) The Corporation further covenants and agrees that it will pay when
due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Common
Shares 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 Right Certificates
to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Common Shares in a name
other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates or depositary receipts for
Common Shares upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it
has been established to the Corporation's reasonable
satisfaction that no such tax is due.
Section 10........Common Shares Record Date. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Common Shares transfer books of the Corporation are closed, such person shall be
deemed to have become the record holder on such succeeding Business Day on which
the Common Shares transfer books of the Corporation are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Common 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 Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Common Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) In the event the Corporation shall at any time after the date of
this Agreement (A) declare a dividend on the Common
Shares payable in Common Shares, (B) subdivide the outstanding Common
Shares, (C) combine the outstanding Common Shares into
a smaller number of Common Shares or (D) issue any shares of its
capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidat-
ion or merger in which the Corporation is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall
be proportionately adjusted (without duplicating the
effect of Section 11(n)) so that the holder of any Right exercised
after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date
and at a time when the Common Shares transfer books of the Corporation
were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value, if any,
of the shares of capital stock of the Corporation issuable upon
exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in
the event that:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring
Person, at any time after the date of this Agreement,
directly or indirectly, shall
(1) merge into the Corporation or otherwise combine with
the Corporation and the Corporation shall be the continuing
or surviving corporation of such merger or combination
(other than in a transaction subject to Section 13 hereof),
(2) merge or otherwise combine with any Subsidiary of the Corporation,
(3) in one or more transactions (other than in connection with the
exercise of Rights or the exercise or conversion of securities
exercisable or convertible into capital stock of the Corporation or
any of its Subsidiaries) transfer any assets to the Corporation
or any of its Subsidiaries in exchange (in whole or in part) for
shares of any class of capital stock of the Corporation or any of
its Subsidiaries or for securities exercisable for or convertible
into shares of any class of capital stock of the Corporation or of
any of its Subsidiaries, or otherwise obtain from the Corporation or
any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Corporation
or any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the
Corporation or any of its Subsidiaries (other than as part of a pro
rata distribution to all holders of such shares of any class of
capital stock of the Corporation, or any of its Subsidiaries),
(4) sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise dispose (in one or more transactions) of any assets
(including securities) to, from, with or of, as the case may be,
the Corporation or any of its Subsidiaries (other than in a
transaction subject to Section 13 hereof),
(5) receive any compensation from the Corporation or any of its
Subsidiaries other than compensation as a director or for full-time
employment as a regular employee, in either case, at rates in
accordance with the Corporation's (or its Subsidiaries') past
practices, or
(6) receive the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantage provided by the Corporation or any of
its Subsidiaries, or
(B) during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split),
or recapitalization or reorganization of the Corporation, or any
merger or consolidation of the Corporation with any of its Subsidiaries
or any other transaction or series of transactions involving the
Corporation or any of its Subsidiaries (whether or not with or into or
otherwise involving an Acquiring Person), other than a transaction
subject to Section 13 hereof, which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities of the
Corporation or any of its Subsidiaries beneficially owned by any
Acquiring Person or any Affiliate or Associate thereof, or
(C) any Person (other than the Corporation or any Related Person) who or
which, together with all Affiliates and Associates of such Person,
shall at any time after the date of this Agreement, become the
Beneficial Owner of 15% or more of the Common Shares then outstanding
(other than pursuant to any transaction set forth in Section 13 hereof)
provided, however, that a Person shall not be deemed to have become
the Beneficial Owner of 15% or more of the Common Shares then
outstanding for the purposes of this Section 11(a)(ii)(C) solely as a
result of a reduction in the number of Common Shares outstanding,
unless subsequent to such reduction such Person or any Affiliate or
Associate of such Person shall become the Beneficial Owner of any
additional Common Shares, or
(D) any Person is declared to be an Adverse Person by the Board of Directors,
then each holder of a Right shall thereafter have a right to receive, upon
exercise thereof in accordance with the terms of this Agreement and in lieu of
the number of Common Shares for which the Right is then exercisable, such number
of Common Shares of the Corporation as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable and dividing that product by (y) 50% of the
then current market price per share of the Corporation's Common Shares
(determined pursuant to Section 11(d) hereof on the date such Person became an
Acquiring Person). In the event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Corporation shall not take any
action which would eliminate or diminish the benefits intended to be afforded by
the Rights.
From and after the occurrence of the earlier of the events described in
clauses (A), (B), (C) and (D) above, any Rights that are or were acquired or
beneficially owned by such Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) and any such Adverse Person shall be void and any holder
of such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person or
Adverse Person whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person or Adverse Person
whose Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof or to any nominee of such Acquiring Person, Adverse Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person or Adverse Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof shall
be cancelled.
(iii) In the event that there shall not be sufficient Common Shares
authorized and unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the
Corporation shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise of the
Rights. However, if the Corporation is unable to cause
the authorization of additional Common Shares within 90 calendar days
after the occurrence of an event in Section 11(a)(ii),
then, notwithstanding anything in this Agreement to the contrary, the
Corporation shall determine the excess of the value of
the Common Shares issuable upon the exercise of a Right over the
Purchase Price (such excess being hereinafter referred to
as the "Spread") and shall be obligated to deliver, upon the
surrender of such Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and cash
(to the extent permitted by applicable law and any
agreements or instruments to which the Corporation is a party in
effect immediately prior to the first occurrence of an
event in Section 11(a)(ii)) in an amount equal to the Spread. To
the extent that any legal or contractual restrictions
prevent the Corporation from paying the full amount of cash
payable in accordance with the foregoing sentence, the
Corporation shall pay to holders of the Rights as to which such
payments are payable all amounts which are not then
restricted on a pro rata basis and shall continue to make payments on
a pro rata basis as funds become available until the
full amount due to each such Right holder has been paid.
(b) In case the Corporation shall fix a record date for the issuance
of rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase
Common Shares (or shares having the same rights, privileges and
preferences as the Common Shares ("equivalent common
shares")) or securities convertible into Common Shares or equivalent
common shares at a price per Common Share or equivalent
common share (or having a conversion price per share, if a security
convertible into Common Shares or equivalent common
shares) less than the then current per share market price of the Common
Shares (as defined in Section 11(d)) on such record
date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares
which the aggregate offering price of the total number of
Common Shares and/or equivalent common shares so to be offered
(and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be
the number of Common Shares outstanding on such record date plus the
number of additional Common Shares and/or equivalent
common shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one
Right be less than the aggregate par value, if any, of the shares of
capital stock of the Corporation issuable upon exercise
of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement
filed with the Rights Agent. Common Shares owned by or
held for the account of the Corporation shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Corporation shall fix a record date for the making of a
distribution to all holders of the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Corporation is the
continuing or surviving corporation) of evidences of indebtedness or
assets (other than a regular quarterly cash dividend or
a dividend payable in Common Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share
market price of the Common Shares on such record date less the fair
market value (as determined in good faith by the Board
of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
applicable to one Common Share and the denominator of which shall
be such current per share market price of the Common
Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than
the aggregate par value, if any, of the shares of capital stock of the
Corporation to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be
the average of the daily closing prices per share of
such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share
market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or
(B) any subdivision, combination or reclassification
of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination
of reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of
such Security. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the NASDAQ,
the OTC Bulletin Board, or such other system then in use,
or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the
Corporation. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day
(ii) For the purpose of any computation hereunder, the "current per share
market price" of the Common Shares shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Common Shares are
not publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith
by the Board of Directors of the Corporation, whose determination shall
be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest one ten-thousandth of a Common Share or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Corporation other than
Common Shares, thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Common Shares contained in Section
11(a) through (c), inclusive, and the provisions of Section 7, Section
9, Section 10 and Section 13 with respect to the Common Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Common
Shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of Common Shares (calculated to the nearest one
ten-thousandth of a Common Share) obtained by (i) multiplying (x) the
number of Common Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Corporation may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights in substitution for
any adjustment in the number of Common Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number
of Common Shares for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated
to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Corporation shall
make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the purchase
price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Corporation
shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Corporation, new Right
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of Common Shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Shares
issuable upon exercise of the Rights, the Corporation shall 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 nonassessable Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a
specified event, the Corporation may elect to defer, until the
occurrence of such event, issuing to the holder of any Right exercised
after such record date the Common Shares and other capital stock or
securities of the Corporation, if any, issuable upon such exercise over
and above the Common Shares and other capital stock or securities of
the Corporation, if any, issuable on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the
Corporation shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Corporation shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Common Shares, (ii) issuance wholly for cash or any
Common Shares at less than the current market price, (iii) issuance
wholly for cash or Common Shares or securities which by their terms are
convertible into or exchangeable for Common Shares, (iv) dividends on
Common Shares payable in Common Shares, or (v) issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Corporation to holders of its Common Shares shall not be
taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Corporation shall (i)
declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares) into a
greater or lesser number of Common Shares, then in any such case (y)
the number of Common Shares purchasable after such
event upon proper exercise of each Right shall be determined by
multiplying the number of Common Shares so purchasable
immediately prior to such event by a fraction, the numerator of which
is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of Common
Shares outstanding immediately after such event, and
(z) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event
had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever such
a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12........Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 the
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on such certificate 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. In the event, directly or indirectly, the Corporation shall consolidate
with, or merge with and into, any other Person, any Person shall consolidate
with the Corporation, or merge with and into the Corporation and the Corporation
shall be the continuing or surviving corporation of such merger or consolidation
and, in connection with such merger or consolidation, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities of any
other Person (or the Corporation) or cash or any other property, or (c) the
Corporation shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power (including without limitation securities creating any obligation
on the part of the Corporation and/or any of its Subsidiaries) aggregating 50%
or more of the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to any other Person other than the Corporation or one or more
of its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement and in lieu of Common Shares of the
Corporation, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of such other Person (including
the Corporation as successor thereto or as the surviving corporation), free and
clear of any liens, encumbrances and other adverse claims and not subject to any
rights of call or first refusal, as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the Issuer of
such Common Shares shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and duties
of the Corporation pursuant to this Agreement; (iii) the term "Corporation"
shall thereafter be deemed to refer to such Issuer; and (iv) such Issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. For purposes of this Section 13,
"Issuer" shall mean (x) in the case of any event described in Sections 13(a) or
(b) above, the Person that is the continuing, surviving, resulting or acquiring
Person (including the Corporation as the continuing or surviving corporation of
a transaction described in Section 13(b) above), and (y) in the case of any
event described in Section 13(c) above, the Person that is the party receiving
the greatest portion of the assets or earning power (including without
limitation securities creating any obligation on the part of the Corporation
and/or any of its Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if (1) no class of
equity security of such Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, and (2) such Person is a Subsidiary, directly or indirectly, of another
Person, a class of equity security of which is and has been so registered, the
term "Issuer" shall mean such other Person; and (B), in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, a class of equity
security of two or more of which are and have been so registered, the term
"Issuer" shall mean whichever of such Persons is the issuer of the equity
security having the greatest aggregate market value. Notwithstanding the
foregoing, if the Issuer in any of the events listed above is not a corporation
or other legal entity having outstanding equity securities, then, and in each
such case, (i) if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity securities, then all
references to Common Shares of the Issuer shall be deemed to be references to
the Common Shares of the corporation or other legal entity having outstanding
equity securities which ultimately controls the Issuer, and (ii) if there is no
such corporation or other legal entity having outstanding equity securities, (Y)
proper provision shall be made so that the Issuer shall create or otherwise make
available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a type or types of security or securities having a fair
market value at least equal to the economic value of the Common Shares which
each holder of a Right would have been entitled to receive if the Issuer had
been a corporation or other legal entity having outstanding equity securities;
and (Z) all other provisions of this Agreement shall apply to the issuer of such
securities as if such securities were Common Shares. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated above) which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior to such consummation the Corporation and such Issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in this Section 13 and further providing that
as soon as practicable after the consummation of any such consolidation, merger,
sale or transfer, the Issuer will
(a) prepare and file a registration statement under the Securities Act,
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
earlier of the Expiration Date or the Redemption Date; and
(b) deliver to holders of the Rights historical financial statements for
the Issuer and each of its Affiliates which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The Corporation shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
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. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the
Corporation. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Corporation shall be used.
(b) The Corporation shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares,
the Corporation shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market
value of one Common Share. For the purposes of this Section 14(b), the
current market value of a Common Share shall be the closing price of a
Common Share (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15........Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any person subject to, this Agreement.
Section 16........Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares:
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Corporation and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than the
Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent shall be affected by any
notice to the contrary.
Section 17........Right Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Common Shares, or any other
securities of the Corporation 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 shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18........Concerning the Rights Agent. The Corporation agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred, in the
absence of negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Shares 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, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19........Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20........Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its own choice (who
may 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 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 any one of the Chairman of the Board, the President, any Vice
President, the Secretary or the Treasurer of the Corporation and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Corporation and any
other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Corporation of
any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method
or amount thereof) provided for in Sections 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates
after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any
Common Shares 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 this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President,
any Vice President, 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 by it in good faith in
accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions. Any application
by the Rights Agent for written instructions from the
Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the
Rights Agent under this Rights Agreement and the date on and/or
after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or
after the date specified in such application (which date
shall not be less than five Business Days after the date any such
officer of the Corporation actually receives such
application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or
omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract
with or lend money to the Corporation or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other
capacity for the Corporation or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Corporation
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.
Section 21........Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Corporation may remove the
Rights Agent or any successor Rights Agent 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 Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the Corporation
shall fail to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate who shall, with such notice, submit his Right
Certificate for inspection by the Corporation, then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be (i) a corporation organized and
doing business under the laws of the United States (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution), in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million or (ii) a subsidiary of a corporation described in clause (i) 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
Shares, and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22........Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the 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 Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23........Redemption.
(a) The Board of Directors of the Corporation may, at its option, at any
time prior to the earlier of (i) the Final Expiration
Date and (ii) the tenth calendar day following the Share Acquisition
Date (or, if the Share Acquisition Date shall have
occurred prior to the Record Date, the Close of Business on the tenth
calendar day following the Record Date), or such later
date as may be specified by a majority of the Board of Directors,
redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors may
be made effective at such time on such basis and with
such conditions as the Board of Directors in its sole discretion may
establish.
(b) If following the occurrence of a Share Acquisition Date and
following the expiration of the right of redemption hereunder
but prior to the occurrence of an event described in Sections (A),
(B), (C) or (D) of Section 11(a)(ii) or Sections (a), (b)
or (c) of Section 13 (each, a "Triggering Event") each of the
following shall have occurred and remain in effect: (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of Common Shares in a
transaction, or series of transactions, which did not result in the
occurrence of any Triggering Event such that such Person
is thereafter a Beneficial Owner of 10% or less of the
outstanding Common Shares, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause
(i), who are Acquiring Persons, and (iii) the transfer
or other disposition described in clause (i) above was other than
pursuant to a transaction, or series of transactions,
which directly or indirectly involved the Corporation or any of its
Subsidiaries, then the right of redemption set forth in
Section 23(a) shall be reinstated and thereafter be subject to the
provisions of this Section.
(c) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, and without any further action
and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The
Corporation may, at its option, pay the Redemption Price in cash,
Common Shares (based upon the current per share market
price of the Common Shares (determined pursuant to Section 11(d)
hereof) at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The
Corporation shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant
to paragraph (a) of this Section 23, the Corporation shall mail
a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price
will be made. Neither the Corporation nor any of its
Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof,
or other than in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 24........Exchange.
(a) The Board of Directors of the Corporation may, at its option, at
any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common
Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at
any time after any Person (other than the Corporation,
any Subsidiary of the Corporation, any employee benefit plan of
the Corporation or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such
person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Corporation shall promptly
give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Corporation
promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of
the Common Shares for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Corporation, at its
option, may substitute equivalent common shares, as such term is
defined in Section 11(h) hereof, for Common Shares exchangeable for
Rights, as appropriately adjusted to reflect adjustments in the voting
rights of the Common Shares pursuant to the terms thereof, so that the
fraction of an equivalent common share delivered in lieu of each Common
Share shall have the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange
of Rights as contemplated in accordance with this Section 24, the
Corporation shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights.
(e) The Corporation shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Corporation shall
pay to the registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value
of a whole Common Share. For the purposes of this paragraph (e), the
current market value of a whole Common Share shall be the closing price
of a Common Share (as determined pursuant to Section 11(d) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
Section 25........Notice of Certain Events.
(a) In case the Corporation shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Common
Shares or to make any other distribution to the holders of its Common
Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Common Shares rights or warrants
to subscribe for or to purchase any additional Common
Shares or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of
its Common Shares, (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to, any other Person, 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 a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Common
Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least 10 days prior to the record date
for determining holders of the Common Shares for purposes of such
action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the
Common Shares, whichever shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii) hereof shall occur,
then the Corporation shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26........Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the 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:
MFB Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
P.O. Box 528 Mishawaka, IN
46546-0528
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Corporation) as follows:
Registrar and Transfer Company
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Corporation prior to issuance of Right Certificates; otherwise, at
the address of such holder as shown on the registry books of the Rights Agent.
Section 27........Supplements and Amendments. Prior to the Distribution Date, if
the Corporation so directs, the Corporation and the Rights Agent shall
supplement or amend any provision of this Agreement in any manner which the
Corporation may deem desirable without the approval of any holders of Rights or
certificates representing Common Shares. From and after the Distribution Date,
if the Corporation so directs, the Corporation, upon approval by the Board of
Directors and the Rights Agent, shall supplement or amend this Agreement without
the approval of any holders of Rights or Certificates representing Common Shares
in order (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 shorten or lengthen any time period hereunder, or
to change or supplement the provisions hereunder in any manner which the
Corporation, upon such approval, may deem desirable, including without
limitation the addition of other events requiring adjustment to the Rights under
Sections 11 or 13 or procedures relating to the redemption of the Rights, which
change, amendment or supplement shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of any such Person); provided, however, that this Agreement may not
be supplemented or amended pursuant to this sentence to lengthen, pursuant to
clause (iii) of this sentence, any time period unless such lengthening is
specifically contemplated hereby or is for the purpose of protecting, enhancing
or clarifying the rights of, or the benefits to, the holders of Rights. Upon the
delivery of a certificate from the President or any Vice President of the
Corporation which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment; provided, however, that the failure or refusal of
the Rights Agent to execute such supplement or amendment shall not affect the
validity or effective date of any supplement or amendment adopted by the
Corporation. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made which decreases the stated Redemption
Price or the period of time remaining until the Final Expiration Date.
Section 28........Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Corporation or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 29........Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person or corporation other than the Corporation, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30........Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31........Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Indiana and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32........Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33........Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
MFB CORP.
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Attest:
By: /s/ M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary
REGISTRAR AND TRANSFER COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
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Attest: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
By: ▇▇▇▇▇▇▇ P Tatler, Assistant Secretary
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▇▇▇▇▇▇▇ ▇. Tatler, Assistant Secretary
2
EXHIBIT A
Form of Right Certificate
Certificate No.... ___Rights
NOT EXERCISABLE AFTER OCTOBER 1, 2016 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
MFB Corp.
This certifies that , or registered assigns, is the registered owner of
the number 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 October 2, 2006 the "Rights Agreement"), between MFB Corp., an Indiana
corporation (the "Corporation"), and Registrar and Transfer Company (the "Rights
Agent"), to purchase from the Corporation at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
eastern standard time, on October 1, 2016 at the office of the Rights Agent
designated for such purpose, or at the office of its successor as Rights Agent,
one fully paid nonassessable share of the Common Stock, without par value, of
the Corporation (the "Common Shares"), at a purchase price of $93.00 per Common
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of Common Shares
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of October 21, 2006,
based on the Common Shares as constituted at such date. As provided in the
Rights Agreement, the Purchase Price and the number of Common Shares which may
be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by this reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations of the Corporation and of the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Corporation and the above-mentioned offices of the
Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised. In no event will certificates for
fractional Rights be issued.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed in whole, but not in part, by the
Corporation at a redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for an equal number of Common Shares.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
or of any other securities of the Corporation which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as 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
duly exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purchase 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 ----------------, -----.
MFB CORP.
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Attest:
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Secretary
Countersigned:
REGISTRAR AND TRANSFER
COMPANY
By:
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Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and transfers
unto
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(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________________________,
Attorney, to transfer the within Right Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated: __________, ______
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate hereof (as defined in the Rights Agreement).
Signature
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Right Certificate.)
To MFB Corp.:
The undersigned hereby irrevocably elects to exercise
_______________________ Rights represented by this Right Certificate to purchase
the Common Shares issuable upon the exercise of such Rights and requests that
certificates for such Common Shares be issued in the name of:
Please insert social security
or other identifying number:
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(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:
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(Please print name and address)
Dated: ______________, ________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Form of Reverse Side of Right Certificate -- continued
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
3
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On October 2, 2006, the Board of Directors of MFB Corp. (the "Company")
declared a dividend of one common share purchase right (a "Right" or "Rights")
for each outstanding share of all common stock, without par value (the "Common
Shares"), of the Company. The dividend is payable to the shareholders of record
as of October 21, 2006 (the "Record Date"). If and when the Rights become
exercisable, each Right will entitle the registered holder to purchase from the
Company one Common Share at a purchase price of $93.00 (the "Purchase Price"),
although the price may be adjusted as described below. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Registrar and Transfer Company, as Rights Agent (the
"Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Initially, shareholders will not receive a separate certificate for the
Rights. The Rights will be represented by the outstanding Common Share
certificates with a copy of this Summary of Rights attached thereto and the
Rights cannot be bought, sold or otherwise traded separately from the Common
Shares. Certificates for Common Shares issued after the Record Date will carry a
notation that indicates that Rights are attached to the Common Shares and that
the terms of the Rights Agreement are incorporated therein.
Separate certificates representing the Rights will be distributed as
soon as practicable after the "Distribution Date," which is the earliest to
occur of:
(1) 10 calendar days following a public announcement that a person or
group of affiliated or associated persons (excluding certain related persons)
(an "Acquiring Person") has (a) acquired beneficial ownership of 12% or more of
the outstanding Common Shares or (b) become the beneficial owner of an amount of
the outstanding Common Shares (but not less than 10%) which the Board of
Directors determines to be substantial and which ownership the Board of
Directors determines is intended or may be reasonably anticipated, in general,
to cause the Company to take actions determined by the Board of Directors to be
not in the Company's best long-term interests (an "Adverse Person"), or
(2) 10 business days (or such later date as may be determined by action
of the Board of Directors prior to the time any person or group becomes an
Acquiring Person) following the commencement or announcement of an intention to
make a tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 30% or more of such outstanding
Common Shares.
Until the Distribution Date (or earlier exchange, redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and, thereafter, such separate Right Certificates alone will
evidence the Rights.
EXERCISABILITY AND EXPIRATION
The holders of the Rights are not required to take any action until the
Rights become exercisable. As described above, the Rights are not exercisable
until the Distribution Date. Holders of the Rights will be notified that the
Rights have become exercisable when the Rights Agent mails the Rights
Certificates. The Rights will expire on October 1, 2016 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Company, in each case, as described below.
ADJUSTMENTS
In order to protect the value of the Rights to the holders, the
Purchase Price payable and the number of Common Shares, or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time (1) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Common Shares, (2) upon the grant to
holders of the Common Shares of certain rights or warrants to subscribe for or
purchase Common Shares at a price, or securities convertible into Common Shares
with a conversion price, less than the then current market price of Common
Shares, or (3) upon the distribution to holders of the Common Shares of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Common Shares)
or of subscription rights or warrants, other than those referred to above.
These adjustments are called anti-dilution provisions and are intended
to ensure that a holder of Rights will not be adversely affected by the
occurrence of such events. With certain exceptions, the Company is not required
to adjust the Purchase Price until cumulative adjustments require a change of at
least 1% in the Purchase Price. No fractional Common Shares will be issued and
in lieu thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading day prior to the date of exercise.
FLIP-OVER EVENTS AND FLIP-IN EVENTS
In the event that (1) the Company is acquired in a merger or other
business combination transaction and the Company is not the surviving
corporation, or (2) any person consolidates or merges with the Company and all
or part of the Company's Common Shares are exchanged for securities, cash or
property of any other person, or (3) 50% or more of the Company's consolidated
assets or earning power are sold (collectively, "Flip-Over Events"), proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the Right. In the event that (1) an Acquiring Person engages
in certain self-dealing transactions, or (2) a person is declared an Adverse
Person by the Board of Directors of the Company, or (3) a person (other than
certain related persons) acquires 15% or more of the outstanding Common Shares
(collectively, "Flip-In Events"), proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
exercise price of the Right.
EXCHANGE OPTION
At any time after a person becomes an Acquiring Person, and prior to
the acquisition by such Acquiring Person of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
REDEMPTION
At any time prior to the tenth calendar day following the date of a
public announcement that a person or group has become an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
If the Board of Directors' ability to redeem the Rights pursuant to the
Rights Agreement has expired because a person or group has become an Acquiring
Person, but a Flip-Over Event or certain Flip-In Events have not yet occurred,
the redemption right will be reinstated if the Acquiring Person disposes of a
sufficient number of the Company's Common Shares so that such person then owns
only 10% or less of the outstanding Company's Common Shares and if certain other
conditions are met.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement is available from the Company at no
charge upon written request. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by this reference.
INDS01 CVS 860269v5