RIGHTS AGREEMENT
dated as of
December 3, 1997
between
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION, as Issuer
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
TABLE OF CONTENTS
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PAGE
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SECTION 1. DEFINITIONS ................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT.................................4
SECTION 3. ISSUE OF RIGHT CERTIFICATES.................................4
SECTION 4. FORM OF RIGHT CERTIFICATES..................................5
SECTION 5. COUNTERSIGNATURE AND REGISTRATION...........................5
SECTION 6. TRANSFER AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED,LOST OR STOLEN RIGHT CERTIFICATES.................6
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS..............................................7
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES..........8
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK...............8
SECTION 10. PREFERRED STOCK RECORD DATE.................................9
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS........................................10
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES..................................................17
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER...........................................17
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES....................20
SECTION 15. RIGHTS OF ACTION...........................................21
SECTION 16. AGREEMENT OF RIGHT HOLDERS.................................21
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER..........22
SECTION 18. CONCERNING THE RIGHTS AGENT................................22
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENTS.23
SECTION 20. DUTIES OF RIGHTS...........................................23
SECTION 21. CHANGE OF RIGHTS AGENT.....................................25
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.........................26
SECTION 23. REDEMPTION.................................................26
SECTION 24. EXCHANGE...................................................27
SECTION 25. NOTICE OF PROPOSED ACTIONS.................................27
SECTION 26. NOTICES....................................................28
SECTION 27. SUPPLEMENTS AND AMENDMENTS.................................29
SECTION 28. SUCCESSORS.................................................29
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC..29
SECTION 30. BENEFITS OF THIS AGREEMENT.................................30
SECTION 31. SEVERABILITY...............................................30
SECTION 32. GOVERNING LAW..............................................30
SECTION 33. COUNTERPARTS...............................................30
SECTION 34. DESCRIPTIVE HEADINGS.......................................30
Exhibit A - Form of Certificate of Designation of Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the Shareholder Rights Plan
RIGHTS AGREEMENT
AGREEMENT dated as of December 3, 1997, between ▇▇▇▇▇▇ & ▇▇▇▇▇
Corporation, a Tennessee corporation (the "Company"), and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, on December 3, 1997 the Board of Directors of the Company
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as hereinafter defined) outstanding
at the close of business on December 15, 1997 (the "Record Date") and has
authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right in respect of each share of Common Stock
issued after the Record Date, each Right representing the right to purchase,
upon the terms and subject to the conditions hereinafter set forth, one
two-hundredth of a share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ACQUIRING PERSON" means any Person who, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include the
Company, any of its Subsidiaries, any employee benefit plan of the Company or
any of its Subsidiaries or any Person organized, appointed or established by
the Company or any of its Subsidiaries for or pursuant to the terms of any
such plan.
"AFFILIATE" and "ASSOCIATE" have the respective meanings ascribed to such
terms in Rule 12b-2 under the Exchange Act as in effect on the date hereof.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be deemed to
beneficially own, any securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or otherwise
(other than pursuant to the Rights); PROVIDED 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 its Affiliates or Associates until such tendered securities
are accepted for payment or exchange; or
(ii) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or otherwise; PROVIDED that a
Person shall not be deemed the "Beneficial Owner" of or to beneficially
own any security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding (A) arises solely from a revocable proxy
or consent given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person or any
of its Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (b)(ii) immediately above) or disposing of any such securities.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"CLOSE OF BUSINESS" on any given date means 5:00 p.m., New York City time,
on such date; PROVIDED that if such date is not a Business Day "close of
business" means 5:00 p.m., New York City time, on the next succeeding Business
Day.
"COMMON STOCK" means the Common Stock, no par value per share, of the
Company, except that, when used with reference to any Person other than the
Company, "Common Stock" means the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.
"CONTINUING DIRECTOR" means any member of the Board of Directors of the
Company, while such Person is a member of the Board, who is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and either (a) was a member of the Board immediately prior to the
time any Person becomes an Acquiring Person or (b) subsequently becomes a
member of the Board, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing
Directors.
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"DISTRIBUTION DATE" means the earlier of (a) the close of business on the
tenth day (or such later day as may be designated by action of a majority of
the Continuing Directors) after the Stock Acquisition Date and (b) the close
of business on the tenth Business Day (or such later day as may be designated
by action of a majority of the Continuing Directors) after the date of the
commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXPIRATION DATE" means the earlier of (a) the Final Expiration Date and
(b) the time at which all Rights are redeemed as provided in Section 23 or
exchanged as provided in Section 24.
"FINAL EXPIRATION DATE" means the close of business on December 15, 2000.
"PERSON" means an individual, corporation, partnership, association,
trust or any other entity or organization.
"PREFERRED STOCK" means the Series A Participating Cumulative Preferred
Stock, no par value per share, of the Company, having the terms set forth in
the form of certificate of designation attached hereto as Exhibit A.
"PURCHASE PRICE" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one two-hundredth of a
share of Preferred Stock (subject to adjustment as provided herein) upon
exercise of a Right, which price shall initially be $200.
"SECTION 11(a)(ii) EVENT" means any event described in the first clause
of Section 11(a)(ii).
"SECTION 13 EVENT" means any event described in clauses (x), (y) or (z) of
Section 13(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCK ACQUISITION DATE" means the date of the first public announcement
(including the filing of a report on Schedule 13D under the Exchange Act (or any
comparable or successor report)) by the Company or an Acquiring Person
indicating that an Acquiring Person has become such.
"SUBSIDIARY" of any Person means any other Person of which securities or
other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"TRADING DAY" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business
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or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day.
"TRIGGERING EVENT" means any Section 11(a)(ii) Event or any Section 13
Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. If the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agents shall be as the Company shall determine.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Prior to the Distribution
Date,(i) the Rights will be evidenced by the certificates for the Common Stock
and not by separate Right Certificates (as hereinafter defined) and the
registered holders of the Common Stock shall be deemed to be the registered
holders of the associated Rights, and (ii) the Rights will be transferable only
in connection with the transfer of the underlying shares of Common Stock. As
soon as practicable after the Record Date, the Company will send a summary of
the Rights substantially in the form of Exhibit C hereto, by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Record Date at the address of such holder shown on the
records of the Company.
(b) As soon as practicable after the Company has notified the
Rights Agent of the occurrence of the Distribution Date, the Rights
Agent will send, by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Company, one or more Right Certificates evidencing one
Right (subject to adjustment as provided herein) for each share of
Common Stock so held. If an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 11(p), the
Company shall, at the time of distribution of the Right Certificates,
make the necessary and appropriate rounding adjustments (in accordance
with Section 14(a)) so that Right Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. From and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of Common
Stock outstanding as of the Record Date or issued after the Record Date
but prior to the earlier of the Distribution Date and the Expiration
Date. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (i) shall, with respect to shares of
Common Stock so issued or sold (x) pursuant to the exercise of stock
options or under any employee plan or arrangement or (y) upon the
exercise, conversion or exchange of other securities issued by the
Company prior to the Distribution Date and (ii) may, in any other case,
if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; PROVIDED that no
such Right Certificate shall be issued if, and to the extent that,
(i) the Company shall be
5
advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued
or (ii) appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
(d) Certificates for the Common Stock issued after the Record
Date but prior to the earlier of the Distribution Date and the
Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation and First
Chicago Trust Company of New York dated as of December 3, 1997
(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 the Company. The Company
will mail to the holder of this certificate a copy of the Rights
Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances, as set forth in
the Rights Agreement, such Rights may be evidenced by separate
certificates and no longer be evidenced by this certificate, may
be redeemed or exchanged or may expire. As set
forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person
or by any subsequent holder, may be null and void.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The certificates
evidencing the Rights (and the forms of assignment, election to
purchase and certificates to be printed on the reverse thereof)
(the "Right Certificates") shall be substantially in the form of
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with
any applicable law, rule or regulation or with any rule or regulation
of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. The Right Certificates, whenever
distributed, shall be dated as of the Record Date
(b) Any Right Certificate representing Rights beneficially owned by
any an Person referred to in clauses 7(d)(i), 7(d)(ii) or 7(d)(iii) shall
(to the extent feasible) contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the
Rights represented hereby may be or may become null and void in the
circumstances specified in Section 7(d) of such Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by its President
and Chief Executive Officer or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either
5
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 so countersigned. In case any officer of the Company
whose manual or facsimile signature is affixed to the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates may, nevertheless, be countersigned
by the Rights Agent and issued and delivered with the same force
and effect as though the Person who signed such Right Certificates had
not ceased to be such officer of the Company. Any Right Certificate
may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any
such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as
the place for surrender of Right Certificates upon exercise, transfer
or exchange, books for registration and transfer of the Right
Certificates. Such books shall show with respect to each Right
Certificate the name and address of the registered holder thereof,
the number of Rights indicated on the certificate and the certificate
number.
SECTION 6. TRANSFER AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED,
DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a) At any time after
the Distribution Date and prior to the Expiration Date, any Right
Certificate or Certificates may, upon the terms and subject to the
conditions set forth below in this Section 6(a), be transferred or
exchanged for another Right Certificate or Certificates evidencing a
like number of Rights as the Right Certificate or Certificates
surrendered. Any registered holder desiring to transfer or exchange
any Right Certificate or Certificates shall surrender such Right
Certificate or Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed)
to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect
to the transfer of any such surrendered Right Certificate or
Certificates until the registered holder of the Rights has complied
with the requirements of Section 7(e). Upon satisfaction of the
foregoing requirements, the Rights Agent shall, subject to Sections
4(b), 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so requested. The
Company may require payment of a sum sufficient to cover any transfer
tax or other governmental charge that may be imposed in connection
with any transfer or exchange of any Right Certificate or
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if mutilated,
the Company will issue and deliver a new Right Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered owner
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
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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, including
Sections 7(d) and 7(e), 9(c), 11(a) and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender
of the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable to the order of the
Company) of the aggregate Purchase Price with respect to the Rights then to
be exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and subject
to Section 20(k), the Rights Agent shall thereupon promptly (i)
(A) requisition from any transfer agent of the Preferred Stock (or make
available, if the Rights Agent is the transfer agent therefor) certificates
for the total number of one two-hundredths of a share of Preferred Stock
to be purchased (and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests) or (B) if the Company shall have
elected to deposit the shares of Preferred Stock issuable upon exercise of
the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one two-hundredths of a
share of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of issuance of fractional shares in accordance with
Section 14 and (iii) after receipt of such certificates or depositary
receipts and cash, if any, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate (with such
certificates or receipts registered in such name or names as may be
designated by such holder). If the Company is obligated to deliver
Common Stock, other securities or assets pursuant to this
Agreement, the Company will make all arrangements necessary so that
such other securities and assets are available for delivery by the
Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing the number of Rights remaining unexercised shall
be issued by the Rights Agent and 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, subject to the provisions of
Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person,(ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person
7
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person
with whom the Acquiring Person (or any such Associate or Affiliate) has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Continuing Directors have
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(d) shall become
null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(d) and
Section 4(b) are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates and
Associates or any transferee of any of them hereunder.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights upon the occurrence
of any purported transfer pursuant to Section 6 or exercise pursuant to
this Section 7 unless such registered holder (i) shall have completed and
signed the certificate contained in the form of assignment or election to
purchase, as the case may be, set forth on the reverse side of the Right
Certificate surrendered for such transfer or exercise, as the case may be,
(ii) shall not have indicated an affirmative response to clause 1 or 2
thereof and (iii) shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form, or, if surrendered
to the Rights Agent, shall be canceled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by this
Agreement. The Company shall deliver to the Rights Agent for cancellation,
and the Rights Agent shall cancel, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available a number of shares of Preferred Stock which are authorized
but not outstanding or otherwise reserved for issuance sufficient to permit
the exercise in full of all outstanding Rights as provided in this
Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all securities reserved for such issuance
to be listed on any such exchange upon official notice of issuance
upon such exercise.
8
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii), or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement under
the Securities Act with respect to the securities issuable upon exercise
of the Rights,(ii) to cause such registration statement to become effective
as soon as practicable after such filing and (iii) to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for
such securities and (B) the Expiration Date. The Company will also take
such action as may be appropriate under, or to ensure compliance with,
the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed 90 days after the date set forth in
clause 9(c)(i), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable for
securities in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, such exercise therefor shall not
be permitted under applicable law or a registration statement in respect of
such securities shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one two-hundredths of a share
of Preferred Stock issuable upon exercise of Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred
Stock upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax or other governmental charge which may be
payable in respect of any transfer involved in the issuance or delivery of
any Right Certificates or of any certificates for Preferred Stock to a
Person other than the registered holder of the applicable Right Certificate,
and prior to any such transfer, issuance or delivery any such tax or other
governmental charge shall have been paid by the holder of such Right
Certificate or it shall have been established to the Company's satisfaction
that no such tax or other governmental charge is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person (other than
the Company) in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of such Preferred Stock 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 transfer taxes or other governmental charges) was made;
PROVIDED that if the date of such surrender and payment
9
is a date upon which the transfer books of the Company relating to the
Preferred Stock are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the
next succeeding Business Day on which
the applicable transfer books of the Company 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
shareholder of the Company with respect to shares for which the Rights
shall be exercisable, including 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 Company
except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. (a) (i) If the Company shall at any time after the date
of this Agreement (A) pay a dividend on the Preferred Stock payable in
shares of Preferred Stock,(B) subdivide the outstanding Preferred Stock
into a greater number of shares,(C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger involving
the Company), the Purchase Price in effect immediately prior to the record
date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
Preferred Stock or other capital stock issuable on such date shall be
proportionately adjusted so that each holder of a Right shall (except as
otherwise provided herein, including Section 7(d)) thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect immediately
prior to such date, the aggregate number and kind of shares of Preferred
Stock or other capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the
applicable transfer books of the Company were open, such holder would have
been entitled to receive upon such exercise and by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
requires an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement, become
an Acquiring Person, then proper provision shall promptly be made so that
each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event, in lieu of Preferred Stock, such
number of duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock of the Company (such shares being referred to
herein as the "Adjustment Shares") as shall be equal to the result
obtained by dividing
(x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of one two-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
such first occurrence (such product being thereafter referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by
10
(y) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of Common Stock on the date of such first
occurrence;
PROVIDED that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13,
then only the provisions of Section 13 shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are
authorized by the Company's charter but not outstanding or reserved for
issuance other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
Purchase Price then in effect, (A)(to the extent available) Common Stock
and then,(B) (to the extent available) other equity securities of the
Company which a majority of the Continuing Directors has determined to be
essentially equivalent to shares of Common Stock in respect to dividend,
liquidation and voting rights (such securities being referred to herein
as "common stock equivalents") and then, if necessary,(C) other equity
or debt securities of the Company, cash or other assets, a reduction in
the Purchase Price or any combination of the foregoing, having an
aggregate value (as determined by the Continuing Directors based upon the
advice of a nationally recognized investment banking firm selected by the
Continuing Directors) equal to the value of the Adjustment Shares;
PROVIDED that (x) the Company may, and (y) if the Company shall not have
made adequate provision as required above to deliver value within 30 days
following the later of the first occurrence of a Section 11(a)(ii) Event
and the first date that the right to redeem the Rights pursuant to
Section 23 shall expire, then the Company shall be obligated to, deliver,
upon the surrender for exercise of a Right and without requiring payment
of the Purchase Price,(1) (to the extent available) Common Stock and then
(2) (to the extent available) common stock equivalents and then, if
necessary,(3) other equity or debt securities of the Company, cash or
other assets or any combination of the foregoing, having an aggregate
value (as determined by the Continuing Directors based upon the advice of
a nationally recognized investment banking firm selected by the
Continuing Directors) equal to the excess of the value of the Adjustment
Shares over the Purchase Price. If the Continuing Directors of the
Company shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the 30 day period set forth above (such
period, as it may be extended, being referred to herein as the
"Substitution Period") may be extended to the extent necessary, but not
more than 90 days following the first occurrence of a Section 11(a)(ii)
Event, in order that the Company may seek shareholder approval for the
authorization of such additional shares. To the extent that the Company
determines that some action is to be taken pursuant to the first or
second sentence of this Section 11(a)(iii), the Company (X) shall
provide, subject to Section 7(d), that such action shall apply uniformly
to all outstanding Rights and (Y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to seek
any authorization of additional
11
shares and to decide the appropriate form and value of any consideration
to be delivered as referred to in such first or second sentence. If any
such suspension occurs, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the current market price per share of
Common Stock (as determined pursuant to Section 11(d)) on the later of the
date of the first occurrence of a Section 11(a)(ii) Event and the first date
that the right to redeem the Rights pursuant to Section 23 shall expire; any
common stock equivalent shall be deemed to have the same value as the Common
Stock on such date; and the value of other securities or assets shall be
determined pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or securities
having the same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible
into or exercisable for Preferred Stock (or equivalent preferred stock)
at a price per share of Preferred Stock (or equivalent preferred stock)
(in each case, taking account of any conversion or exercise price) less
than the current market price (as determined pursuant to Section 11(d))
per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate price (taking account of
any conversion or exercise price) of the total number of shares of
Preferred Stock (and/or equivalent preferred stock) so to be offered
would purchase at such current market price and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock
(and/or equivalent preferred stock) so to be offered. In case such
subscription price may be paid by delivery of consideration part or all
of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. Shares of Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger involving
the Company) of evidences of indebtedness, equity securities other than
Preferred Stock, assets (other than a regular periodic cash dividend out
of the earnings or retained earnings of the Company) or rights, options
or warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined by
multiplying
12
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on
such record date, less the value (as determined pursuant to Section
11(d)(iii)) of such evidences of indebtedness, equity securities, assets,
rights, options or warrants so to be distributed with respect to one
share of Preferred Stock and the denominator of which shall be such
current market price per share of Preferred Stock. Such adjustment shall
be made successively whenever such a record date is fixed, and if such
distribution is not so made, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current
market price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock
for the 30 consecutive Trading Days immediately prior to such date; for
purposes of computations made pursuant to Section 11(a)(iii), the
"current market price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the 10 consecutive Trading Days immediately following
such date; and for purposes of computations made pursuant to Section 14,
the "current market price" per share of Common Stock for any Trading Day
shall be deemed to be the closing price per share of Common Stock for
such Trading Day; PROVIDED that if the current market price per share of
the Common Stock is determined during a period following the announcement
by the issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or securities
exercisable for or convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination or reclassification
of such Common Stock, and prior to the expiration of the requisite 30
Trading Day or 10 Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each
such case, the "current market price" shall be properly adjusted to take
into account ex-dividend trading. 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 shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use or, if on
any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company, or, if at the
time of such selection there is an Acquiring Person, by a majority of the
Continuing Directors. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the
13
Company (or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors) shall be used. If the
Common Stock is not publicly held or not so listed or traded, the "current
market price" per share means the fair value per share as determined in good
faith by the Board of Directors of the Company, or, if at the time of such
determination there is an Acquiring Person, by a majority of the Continuing
Directors, or if there are no Continuing Directors, by a nationally
recognized investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in Section 11(d)(i) (other than the
last sentence thereof). If the current market price per share of Preferred
Stock cannot be determined in such manner, the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal
to 100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by the
current market price per share of Common Stock (as determined pursuant to
Section 11(d)(i) (other than the last sentence thereof)). If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, the "current market price" per share of the Preferred Stock shall be
determined in the same manner as set forth in the last sentence of Section
11(d)(i). For all purposes of this Agreement, the "current market price" of
one two-hundredth of a share of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by 200.
(iii) For the purpose of any computation hereunder, the value of
any securities or assets other than Common Stock or Preferred Stock shall be
the fair value as determined in good faith by the Board of Directors of the
Company, or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors then in office, or, if
there are no Continuing Directors, by a nationally recognized investment
banking firm selected by the Board of Directors, which determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED 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 ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable
14
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained
in Section 11(a), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one
two-hundredths of a share of Preferred Stock and other capital stock of the
Company issuable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and 11(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 one
two-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
two-hundredths of a share for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price. (i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of Rights, in lieu
of any adjustment in the number of one two-hundredths of a share of Preferred
Stock issuable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one two-hundredths of a share of Preferred Stock for which such
Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 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 Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment.
15
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one two-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per two one-hundredth of a
share and the number of 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 par value, if any, of the number of one
two-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one two-hundredths
of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record
date the number of one two-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise over and
above the number of one two-hundredths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; PROVIDED that
the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it, in its sole discretion, shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any Preferred Stock at less than the
current market price, issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exercisable for
Preferred Stock, stock dividends or issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to the holders
of its Preferred Stock, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it will not at any time after
the Distribution Date (i) consolidate, merge or otherwise combine with or
(ii) sell or otherwise transfer (and/or permit any of its Subsidiaries to
sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries, taken as a whole, to
any other Person or Persons if (x) at the time
16
of or immediately after such consolidation, merger, combination or sale there
are any rights, warrants or other instruments or securities outstanding or
any agreements or arrangements in effect which would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or
(y) prior to, simultaneously with or immediately after such consolidation,
merger, combination or sale, the shareholders of a Person who constitutes, or
would constitute, the "Principal Party" for the purposes of Section 13 shall
have received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution Date,
it will not, except as permitted by Sections 23, 24 and 27, take (or permit
any Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if at
any time after the date hereof and prior to the Distribution Date the Company
shall (i) pay a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock,(ii) subdivide the outstanding Common Stock into a
larger number of shares or (iii) combine the outstanding Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter as
contemplated by Section 3(c), shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,(b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Stock
and the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in the manner set forth in Section 26. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) If, following the Stock Acquisition Date, directly or
indirectly,
(x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the continuing
or surviving corporation of such consolidation, merger or combination,
17
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving corporation of
such merger or combination and, in connection with such merger or
combination, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for other stock or securities of the Company or
any other Person, cash or any other property, or
(z) the Company or one or more of its Subsidiaries shall sell or
otherwise transfer, in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries, taken as a whole, to any other
Person or Persons,
then, and in each such case, proper provision shall promptly be made so
that
(i) each holder of a Right shall thereafter be entitled to receive,
upon exercise thereof at the Purchase Price in effect immediately prior to
the first occurrence of any Triggering Event, such number of duly
authorized, validly issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined), not
subject to any rights of call or first refusal, liens, encumbrances or other
claims, as shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of any Triggering
Event by the number of one two-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by
(B) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of the Common Stock of such Principal Party
on the date of consummation of such consolidation, merger, combination,
sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement;
(iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its Common
Stock to permit exercise of all outstanding Rights in accordance with this
Section 13(a)) in connection with the consummation of any such transaction
as may be necessary to assure that the provisions
18
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x) or
(y), the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger, consolidation or
combination, and if no securities are so issued, the Person that survives or
results from such merger, consolidation or combination; and
(ii) in the case of any transaction described in Section 13(a)(z),
the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;
PROVIDED that in any such case,(A) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other Person; and
(B)in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise reserved for issuance to permit the exercise in full
of the Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Section 13(a) and 13(b) and providing that, as soon as practicable after the
date of any consolidation, merger, combination, sale or transfer mentioned in
Section 13(a), the Principal Party will
(i) prepare and file a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the Rights, and
will use its best efforts to cause such registration statement (A) to become
effective as soon as practicable after such filing and (B) to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act.
19
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, combinations, sales or other transfers. If any
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such
fractional Rights, the Company shall pay 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 price of a whole Right. For purposes of this Section 14(a),
the current market price of a whole Right shall be the closing price of a
Right for the Trading Day immediately prior to the date on which such
fractional Rights would otherwise have been issuable. The closing price of a
Right 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, on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company, or, if at the time of such selection there is an Acquiring Person,
by a majority of the Continuing Directors. If on any such date no such
market maker is making a market in the Rights, the current market price of
the Rights on such date shall be as determined in good faith by the Board of
Directors of the Company, or, if at the time of such determination there is
an Acquiring Person, by a majority of the Continuing Directors.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are multiples of one
two-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are multiples of one two-hundredth of a
share of Preferred Stock). In lieu of any such fractional shares of
Preferred Stock, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market price of one
two-hundredth of a share of Preferred Stock. For purposes of this Section
14(b), the current market price of one two-hundredth of a share of Preferred
Stock shall be one two-hundredth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)) for the Trading Day
immediately prior to the date of such exercise.
20
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the same
fraction of the current market price of a share of Common Stock. For
purposes of this Section 14(c), the current market price of a share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d)(i)) for the Trading Day immediately prior to the
date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his or her right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
any certificate representing Common Stock), may, in his or her own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the obligations of, any
Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office or offices of the Rights Agent designated for such purposes,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent may deem
and treat the Person in whose name a Right Certificate (or, prior to the
Distribution Date, a
21
certificate representing shares of Common Stock) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificate or the
certificate representing shares of Common Stock made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(d),
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation; PROVIDED that the
Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock 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 Company 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), 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. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the execution or administration of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the administration of this
Agreement or the exercise or performance of its duties hereunder, including
the costs and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection
with the administration of this Agreement or the exercise or performance of
its duties hereunder in reliance upon any Right Certificate or certificate
for Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent,
22
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto; PROVIDED that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21. 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 a predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any "Acquiring Person" and
the determination of "current market price") be proved or established by the
Company prior to taking, suffering or omitting to take 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
23
certificate signed by the President and Chief Executive Officer or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
the Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any
action taken, suffered or omitted in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity
or execution of any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(d)) 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 adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
shares of Common Stock or Preferred Stock will, when issued, be duly
authorized, validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President and Chief Executive Officer or any Vice President or the Secretary
or the Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer.
24
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company or to any holders of
Rights resulting from any such act, default, neglect or misconduct, provided
that reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the cases may be, has
either not been completed or indicates an affirmative response to clause 1
or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of
the Right Certificates by first-class mail. The Company 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 Stock and Preferred Stock by registered
or certified mail, and, subsequent to the Distribution Date, to the holders
of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his or her Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
state of the
25
United States, in good standing, having a principal office in the State of
New York, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a corporation described in clause 21(a). After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and, subsequent to the Distribution Date, 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, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares of stock issuable upon exercise of the Rights made in accordance with
the provisions of this Agreement.
SECTION 23. REDEMPTION. (a) The Board of Directors of the Company may,
at its option, at any time prior to the earlier of (i) the close of business
on the tenth day after the Stock Acquisition Date (or such later date as a
majority of the Continuing Directors may designate prior to such time as the
Rights are no longer redeemable) and (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price
of $.005 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"); PROVIDED that after any Person has become an Acquiring
Person, any redemption of the Rights shall be effective only if there are
Continuing Directors then in office, and such redemption shall have been
approved by a majority of such Continuing Directors. Notwithstanding
anything in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event until
such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights and without any further action and without any
notice, the right to exercise the Rights will terminate and thereafter the
only right of the holders of Rights shall be to receive the Redemption Price
for each Right so held. The Company shall promptly thereafter give notice of
such redemption to the Rights Agent and the holders of the Rights in the
manner set forth in Section 26; PROVIDED that the failure to give, or any
defect in, such notice shall not affect the validity of such redemption. 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
26
by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in Section 23 or 24, and other than in connection with
the purchase, acquisition or redemption of shares of Common Stock prior to
the Distribution Date.
SECTION 24. EXCHANGE. (a) At any time after any Person becomes an
Acquiring Person, a majority of the Continuing Directors may, at their
option, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to Section
7(d)) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date 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 Company,
any of its Subsidiaries, any employee benefit plan of the Company or any of
its Subsidiaries or any Person organized, appointed or established by the
Company or any of its Subsidiaries 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 shares of Common Stock then
outstanding.
(b) Immediately upon the action of the Continuing Directors electing to
exchange any Rights pursuant to Section 24(a) and without any further action
and without any notice, the right to exercise such Rights will terminate and
thereafter the only right of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly
thereafter give notice of such exchange to the Rights Agent and the holders
of the Rights to be exchanged in the manner set forth in Section 26; PROVIDED
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock 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
Section 7(D)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the
initial rate of one common stock equivalent for each share of Common Stock,
as appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the terms thereof, so
that each common stock equivalent delivered in lieu of each share of Common
Stock shall have essentially the same dividend, liquidation and voting rights
as one share of Common Stock.
SECTION 25. NOTICE OF PROPOSED ACTIONS. (a) In case the Company shall
propose, at any time after the Distribution Date,(i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other than a
27
regular quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii)to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision or combination of
outstanding shares of Preferred Stock) or (iv) to effect any consolidation or
merger with any other Person, or to effect and/or to permit one or more of
its Subsidiaries to effect any sale or other transfer, in one transaction or
a series of related transactions, of assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries,
taken as a whole, to any other Person or Persons, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right, to the extent
feasible and in accordance with Section 26, a notice of such proposed action,
which shall specify the record date for the purposes of any such dividend,
distribution or offering of rights or warrants, or the date on which any 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 Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
25(a)(i) or 25(a)(ii) above at least 20 days prior to the record date for
determining holders of the Preferred Stock entitled to participate in such
dividend, distribution or offering, and in the case of any such other action,
at least 20 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of Preferred Stock,
whichever shall be the earlier. The failure to give notice required by this
section or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a public filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this
Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case,(i) the
Company shall as soon as practicable thereafter give to each holder of a
Right, in accordance with Section 26, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or 13, as the case may be, and (ii)
all references in Section 25(a) to Preferred Stock shall be deemed thereafter
to refer to Common Stock or other capital stock, as the case may be.
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 to or on
the Company shall be sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of the Company indicated on the signature
page hereof or such other address as the Company shall specify in writing to
the Rights Agent. Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail (postage prepaid) to the address of the
Rights Agent indicated on the signature page hereof or such other address as
the Rights Agent shall specify
28
in writing to the Company. Notices or demands authorized by this Agreement
to be given or made by the Company or the Rights Agent to the holder of any
Right Certificate (or, prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail (postage prepaid) to the address of such
holder shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (a) to cure any ambiguity,(b) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein or (c) to change or
supplement the provisions hereof in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Notwithstanding the foregoing, after any
Person has become an Acquiring Person, any supplement or amendment shall be
effective only if there are Continuing Directors then in office, and such
supplement or amendment shall have been approved by a majority of such
Continuing Directors. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange
Act as in effect on the date of this Agreement. The Board of Directors of
the Company (or, after any Person has become an Acquiring Person, a majority
of the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable
in the administration of this Agreement, including the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or exchange or not to redeem or exchange
the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board (or, after any Person has become an Acquiring Person, by the
Continuing Directors)
29
in good faith shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company or the Continuing Directors to
any liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the certificates representing the shares of Common Stock)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of Common
Stock).
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED that, notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company (or, after any Person has become an Acquiring
Person, a majority of the Continuing Directors) determines in its good faith
judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of
such determination by the Board of Directors or Continuing Directors, as the
case may be.
SECTION 32. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Tennessee 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, except that the rights
and obligations of the Rights Agent shall be governed by the law of the State
of New York.
SECTION 33. 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
one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇ ▇&▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-General Counsel
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Tenders & Exchanges Administration
31
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
Pursuant to Section ▇▇-▇▇-▇▇▇ of the
Tennessee Code Annotated
We, ▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer, and ▇▇▇▇ ▇.
▇▇▇▇▇, Vice President-Finance and Treasurer, of ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, as
Issuer, a corporation organized and existing under the Corporation Law of the
State of Tennessee ("Tennessee Law"), in accordance with the provisions thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Charter of the Corporation, the Board of Directors on December 3, 1997, adopted
the following resolution creating a series of Preferred Stock in the amount and
having the designation, voting powers, preferences and relative, participating,
optional and other special rights and qualifications, limitations and
restrictions thereof as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred Stock" (the
"SERIES A PREFERRED STOCK"), and the number of shares constituting such series
shall be 300,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; PROVIDED that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other
securities issued by the Corporation.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable on March 31, June 30, September 30 and December
31 of each year (each such date being referred to herein as a
"QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of any
share or fraction of a share of Series A Preferred Stock, in an
amount per share
A-2
(rounded to the nearest cent) equal to the greater of (i) $1.00 and (ii)
subject to the provision for adjustment hereinafter set forth, 200 times
the aggregate per share amount of all cash dividends or other
distributions and 200 times the aggregate per share amount of all
non-cash dividends or other distributions (other than (A) a dividend
payable in shares of Common Stock, no par value per share, of the
Corporation (the "Common Stock") or (B) a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise)), declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. If the Corporation shall at any time after
December 3, 1997 (the "Rights Declaration Date") pay any dividend on
Common Stock payable in shares of Common Stock or effect a subdivision
or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to
such event under clause 2(a)(ii) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph 2(a) above immediately
after it declares a dividend or distribution on the Common Stock (other
than as described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above);
PROVIDED that if no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date
(or, with respect to the first Quarterly Dividend Payment Date, the
period between the first issuance of any share or fraction of a share of
Series A Preferred Stock and such first Quarterly Dividend Payment
Date), a dividend of $1.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is on or before
the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue and be cumulative
from the date of issue of such shares, or unless the date of issue is a
date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and on
or before such Quarterly Dividend Payment Date, in which case dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders
A-3
of shares of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall not
be more than 60 days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. In addition to any other voting rights required
by law, the holders of shares of Series A Preferred Stock shall have the
following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder
thereof to 200 votes on all matters submitted to a vote of
shareholders of the Corporation. If the Corporation shall at any
time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes
per share to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as a single class on all matters
submitted to a vote of shareholders of the Corporation.
(c) (i)If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon,
the occurrence of such contingency shall ▇▇▇▇ the beginning of a period
(herein called a "default period") which shall extend until such time when
all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of
Series A Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all holders of
Preferred Stock and any other series of Preferred Stock then entitled as a
class to elect directors, voting together as a single class, irrespective of
series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph 3(c)(iii) hereof or
at any annual meeting of shareholders, and thereafter at annual
meetings of shareholders, PROVIDED that neither such voting right
nor the right of the holders of any other series of Preferred
Stock, if any, to increase, in certain cases, the authorized number
of Directors shall be exercised unless the holders of 10% in number
of shares of Preferred Stock outstanding shall be present in person
or by proxy. The absence of a quorum of holders of Common Stock
shall not affect the exercise by holders of Preferred Stock of such
voting right. At any meeting at which holders of Preferred Stock
shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right
is exercised at an annual meeting, to elect two Directors. If the
number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or PARI PASSU
with the Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any
shareholder or shareholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of special meeting
of holders of Preferred Stock, which meeting shall thereupon be
called by the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Preferred Stock are entitled to vote pursuant to
this paragraph 3(c)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his or
her last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or request
or in default of the calling of such meeting within 60 days after
such order or request, such meeting may be called on similar notice
by any shareholder or shareholders owning in the aggregate not less
than 10% of the total number of shares of Preferred Stock
outstanding, irrespective of series. Notwithstanding the
provisions of this paragraph 3(c)(iii), no such special meeting
shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of
shareholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue
to be entitled to elect the whole number of Directors until the holders
of Preferred Stock shall have exercised their right to elect two
Directors voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Stock shall continue
in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided in paragraph
3(c)(ii) hereof) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant.
References in this paragraph 3(c)
A-4
to Directors elected by the holders of a particular class of stock
shall include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in
the charter or bylaws irrespective of any increase made pursuant
to the provisions of paragraph 3(c)(ii) hereof (such number being
subject, however, to change thereafter in any manner provided by
law or in the charter or bylaws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
Directors.
(d) The Charter of the Corporation shall not be amended in any manner
(whether by merger or otherwise) so as to adversely affect the powers,
preferences or special rights of the Series A Preferred Stock without the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein, holders of Series A Preferred
Stock shall have no special voting rights, and their consent shall not be
required for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on outstanding shares of Series A Preferred Stock shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such other parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem, purchase or otherwise acquire for value any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up)
A-5
to the Series A Preferred Stock; PROVIDED that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of stock of the Corporation
ranking junior (as to dividends and upon dissolution, liquidation
or winding up) to the Series A Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares
of Series A Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of Series A
Preferred Stock and all such other parity stock upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for value any shares of stock of the
Corporation unless the Corporation could, under paragraph 4(a), purchase or
otherwise acquire such shares at such time and in such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock without designation as to series and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors as permitted by the Charter or as
otherwise permitted under Tennessee Law.
SECTION 6. LIQUIDATION, DISSOLUTION AND WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment;
PROVIDED that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 200 times the aggregate amount to be
distributed per share to holders of Common Stock, or (2) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all such other parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the
A-6
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 200 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
SECTION 8. NO REDEMPTION. The Series A Preferred Stock shall not be
redeemable.
SECTION 9. RANK. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
SECTION 10. FRACTIONAL SHARES. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
A-7
IN WITNESS WHEREOF, we have executed and subscribed this Certificate as of
the 3rd day of December 1997.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Vice President-Finance and Treasurer
Attest:
/s/ ▇▇▇▇▇▇ ▇. WAY
-----------------------------------
Secretary
A-8
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
No. R- --------------- Rights
NOT EXERCISABLE AFTER THE EARLIER OF DECEMBER 15, 2000 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF THE RIGHTS AGREEMENT.](1)
RIGHT CERTIFICATE
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
This Right Certificate certifies that ______________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the holder (upon the terms and subject to the conditions set
forth in the Rights Agreement dated as of December 3, 1997 (the "RIGHTS
AGREEMENT") between ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, a Tennessee corporation (the
"COMPANY"), and First Chicago Trust Company of New York (the "RIGHTS AGENT")) to
purchase from the Company, at any time after the Distribution Date and prior to
the Expiration Date, ___ two-hundredth[s] of a fully paid, nonassessable share
of Series A Participating Cumulative Preferred Stock (the "PREFERRED STOCK") of
the Company at a purchase price of $200 per one two-hundredth of a share (the
"PURCHASE PRICE"), payable in lawful money of the United States of America, upon
surrender of this Right Certificate, with the form of election to purchase and
related certificate duly executed, and payment of the Purchase Price at an
office of the Rights Agent designated for such purpose.
B-2
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the number
and kind of shares issuable upon exercise of each Right) and the Purchase Price
set forth above are as of [December 15, 1997], and may have been or in the
future be adjusted as a result of the occurrence of certain events, as more
fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Right Certificate are beneficially owned by (a) an Acquiring Person or
an Associate or Affiliate of an Acquiring Person, (b) a transferee of an
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (c) under certain circumstances
specified in the Rights Agreement, a transferee of an Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such, such Rights shall become null and void,
and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights Agent
designated for such purpose and subject to the terms and conditions set forth in
the Rights Agreement, any Rights Certificate or Certificates may be transferred
or exchanged for another Rights Certificate or Certificates evidencing a like
number of Rights as the Rights Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of Directors
of the Company may, at its option,
(a) at any time prior to the earlier of (i) the close of business
on the tenth day after the Stock Acquisition Date (or such later date as
a majority of the Continuing Directors may designate prior to such time
as the Rights are no longer redeemable) and (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $.005 per Right; or
(b) at any time after any Person becomes an Acquiring Person (but
before such Person becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding), exchange all or part of the
then outstanding Rights (other than Rights held by the Acquiring Person
and certain related Persons) for shares of Common Stock at an
B-2
exchange ratio of one share of Common Stock per Right. If the Rights shall
be exchanged in part, the holder of this Right Certificate shall be
entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exchanged.
No fractional shares of Preferred Stock are required to be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
multiples of one two-hundredth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof another Right Certificate or Certificates for
the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital stock
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 Company 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 exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
Dated as of , 19
---------------- -------
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
By:-------------------------------------
President and Chief Executive Officer
:
[SEAL]
Attest:
-------------------------------------
Secretary
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
By:
---------------------------------
Authorized Signature
B-4
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
------------------------------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
--------------------------------------------------------------------------------
(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
Company, with full power of substitution.
Dated: , 19
--------------------- ---
-----------------------------------
Signature
Signature Guaranteed:
B-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not being
assigned by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 19
---------- --- ----------------------------------
Signature
----------------
The signatures to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
----------------
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: ▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the name
of and delivered to:
Please insert social security
or other identifying number
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-------------------------------------------------------------------------------
(Please print name and address)
Dated: , 19
---------------- ---
----------------------------------
Signature
Signature Guaranteed:
B-7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: , 19
------------ --- ----------------------------------
Signature
---------------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
---------------
B-8
EXHIBIT C
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
SHAREHOLDER RIGHTS PLAN
Summary of Terms
FORM OF SECURITY The Board of Directors has declared a dividend of
one preferred stock purchase right for each
outstanding share of the Company's Common Stock,
payable to holders of record as of the close of
business on December 15, 1997 (each a "RIGHT" and
collectively, the "RIGHTS")
TRANSFER Prior to the Distribution Date (1), the Rights
will be evidenced by the certificates for, and will
be transferred with, the Common Stock, and the
registered holders of the Common Stock will be
deemed to be the registered holders of the Rights.
After the Distribution Date, the Rights Agent will
mail separate certificates evidencing the Rights
to each record holder of the Common Stock as of the
close of business on the Distribution Date, and
thereafter the Rights will be transferable
separately from the Common Stock.
EXERCISE Prior to the Distribution Date, the Rights will not
be exercisable.
After the Distribution Date, each Right will be
exercisable to purchase, for $200 (the "Purchase
Price"), one
------------------------
(2) Distribution Date means the earlier of:
(1) the 10th day after public announcement that any person or
group has become the beneficial owner of 15% or more of
the Company's Common Stock and
(2) the 10th business day after the date of the commencement of
a tender or exchange offer by any person which would,
if consummated, result in such person becoming the
beneficial owner of 15% or more of the Company's Common
Stock, in each case, subject to extension by a majority
of the Directors not affiliated with the Acquiring
Person.
C-1
two-hundredth of a share of Series A Participating
Cumulative Preferred Stock, no par value per share,
of the Company.
FLIP-IN If any person or group (an "Acquiring Person")
becomes the beneficial owner of 15% or more
of the Company's Common Stock, then each Right
(other than Rights beneficially owned by the
Acquiring Person and certain affiliated persons)
will entitle the holder to purchase, for the
Purchase Price, a number of shares of the Company's
Common Stock having a market value of twice the
Purchase Price.
FLIP-OVER If, after any person has become an Acquiring
Person, (1) the Company is involved in a merger or
other business combination in which the Company is
not the surviving corporation or its Common
Stock is exchanged for other securities or
assets or (2) the Company or one or more of its
subsidiaries sell or otherwise transfer assets
or earning power aggregating more than 50% of
the assets or earning power of the Company and
its subsidiaries, taken as a whole, then each
Right will entitle the holder to purchase, for
the Purchase Price, a number of shares of common
stock of the other party to such business
combination or sale (or in certain
circumstances, an affiliate) having a market
value of twice the Purchase Price.
EXCHANGE At any time after any person has become an
Acquiring Person (but before any person
becomes the beneficial owner of 50% or more of
the Company's Common Stock), a majority of the
Directors not affiliated with the Acquiring
Person may exchange all or part of the Rights
(other than the Rights beneficially owned by
the Acquiring Person and certain affiliated
persons) for shares of Common Stock at an
exchange ratio of one share of Common Stock
per Right.
REDEMPTION The Board of Directors may redeem all of the
Rights at a price of $.005 per Right at any
time prior to the close of business on the 10th
day after public announcement that any person
has become an Acquiring Person (subject to
extension by a majority of the Directors not
affiliated with the Acquiring Person).
After any person has become an Acquiring Person,
the Rights may be redeemed only with the approval
of a majority of the Directors not affiliated with
the Acquiring Person.
EXPIRATION The Rights will expire on December 15, 2000,
unless earlier exchanged or redeemed.
AMENDMENTS Prior to the Distribution Date, the Rights
Agreement may be amended in any respect.
After the Distribution Date, the Rights Agreement
may be amended in any respect that does not
adversely affect the Rights holders (other than
any Acquiring Person and certain affiliated
persons).
After any person has become an Acquiring Person,
the Rights Agreement may be amended only with
the approval of a majority of the Directors not
affiliated with the Acquiring Person.
VOTING RIGHTS Rights holders have no rights as a shareholder
of the Company, including the right to vote
and to receive dividends.
ANTIDILUTION PROVISIONS The Rights Agreement includes antidilution
provisions designed to prevent efforts to diminish
the efficacy of the Rights.
TAXES While the dividend of the Rights will not be
taxable to shareholders or to the Company,
shareholders or the Company may, depending upon
the circumstances, recognize taxable income in
the event that the Rights become exercisable
as set forth above.
-------------------
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
-------------------