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RIGHTS AGREEMENT
DATED AS OF JUNE 23, 2003,
BY AND BETWEEN
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
AND
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
AS RIGHTS AGENT
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1. Certain Definitions.................................................................................... 1
2. Appointment of Rights Agent............................................................................ 5
3. Issue of Right Certificates............................................................................ 5
4. Form of Right Certificates............................................................................. 7
5. Countersignature and Registration...................................................................... 7
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates........................................................... 8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......................................... 8
8. Cancellation and Destruction of Right Certificates..................................................... 9
9. Company Covenants Concerning Securities and Rights..................................................... 10
10. Record Date............................................................................................ 11
11. Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights........................ 11
12. Certificate of Adjusted Purchase Price or Number of Securities......................................... 19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power................................... 20
14. Fractional Rights and Fractional Securities............................................................ 22
15. Rights of Action....................................................................................... 24
16. Agreement of Rights Holders............................................................................ 24
17. Right Certificate Holder Not Deemed a Stockholder...................................................... 25
18. Concerning the Rights Agent............................................................................ 25
19. Merger or Consolidation or Change of Name of Rights Agent.............................................. 25
20. Duties of Rights Agent................................................................................. 26
21. Change of Rights Agent................................................................................. 27
22. Issuance of New Right Certificates..................................................................... 28
23. Redemption............................................................................................. 29
24. Exchange............................................................................................... 29
25. Notice of Certain Events............................................................................... 30
26. Notices................................................................................................ 31
27. Supplements and Amendments............................................................................. 32
28. Successors; Certain Covenants.......................................................................... 32
29. Benefits of This Agreement............................................................................. 32
30. Governing Law.......................................................................................... 32
31. Severability........................................................................................... 33
(i)
32. Descriptive Headings, Etc.............................................................................. 33
33. Determinations and Actions by the Board................................................................ 33
34. Counterparts........................................................................................... 33
Exhibit A...................................................................................................... A-1
Exhibit B...................................................................................................... B-1
(ii)
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of June 23, 2003 (this "Agreement"), is
made and entered into by and between ▇▇▇▇▇▇▇ International, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Rights Agent (the "Rights Agent").
RECITALS
WHEREAS, pursuant to the confirmation order entered by the United
States Bankruptcy Court for the Western District of New York in Jointly
Administered Case Nos. 01-14099K through 01-14104K on February 27, 2003, the
Company has effected a distribution of one right (a "Right") for each share of
Common Stock, par value $0.01 per share, of the Company (a "Common Share")
outstanding as of the Close of Business (as hereinafter defined) on the day that
is ten days after the Effective Date (as defined in the Bankruptcy Plan) (the
"Record Date"), each Right initially representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), on the terms and
subject to the conditions herein set forth, and the Company has further
authorized and directed the issuance of one Right (subject to adjustment as
provided herein) with respect to each Common Share issued or delivered by the
Company (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date (as
hereinafter defined) and the Expiration Date (as hereinafter defined) or as
provided in Section 22.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" means any Person (other than the Company or
any Related Person) who or which, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of 15%
or more of the then-outstanding Common Shares; provided,
however, that a Person will not be deemed to have become an
Acquiring Person solely as a result of a reduction in the
number of Common Shares outstanding unless and until such time
as (i) such Person or any Affiliate or Associate of such
Person thereafter becomes the Beneficial Owner of additional
Common Shares representing 1% or more of the then-outstanding
Common Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by the Company in
which all holders of Common Shares are treated equally, or
(ii) any other Person who is the Beneficial Owner of Common
Shares representing 1% or more of the then-outstanding Common
Shares thereafter becomes an Affiliate or Associate of such
Person; provided, further, however, that a Person (other than
the Company or any Related Person) that or which, together
with all Affiliates and Associates of such Person, solely as a
result of distributions made pursuant to the Bankruptcy Plan
on account of Allowed Claims in Classes 4, 5A, 5B and 6 (as
defined in the Bankruptcy Plan) held as of the Distribution
Record Date (as defined in the Bankruptcy Plan),
1
becomes the Beneficial Owner of 15% or more of the
then-outstanding Common Shares shall not be deemed to have
become an Acquiring Person unless and until such time as (A)
such Person or any Affiliate or Associate of such Person
thereafter becomes the Beneficial Owner of additional Common
Shares representing 1% or more of the then-outstanding Common
Shares other than as a result of a stock dividend, stock split
or similar transaction effected by the Company in which all
holders of Common Shares are treated equally or (B) any other
Person who is the Beneficial Owner of Common Shares
representing 1% or more of the then-outstanding Common Shares
thereafter becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, if the Board of the Company
determines in good faith that a Person who would otherwise be
an "Acquiring Person" as defined pursuant to the foregoing
provisions of this Section 1(a), has become such
inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person" as defined
pursuant to the foregoing provisions of this Section 1(a),
then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" will have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date
of this Agreement, provided, however, that a Person will not
be deemed to be the Affiliate or Associate of another Person
solely because either or both Persons are or were Directors of
the Company.
(c) "Bankruptcy Plan" means the Third Amended Joint Plan of
Reorganization, dated January 23, 2003, as filed in the United
States Bankruptcy Court for the Western District of New York,
in Jointly Administered Case Nos. 01-14099K through 01-14104K.
(d) A Person will be deemed the "Beneficial Owner" of, and to
"Beneficially Own," any securities:
(i) the beneficial ownership of which such Person or any
of such Person's Affiliates or Associates, directly
or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights,
exchange rights, warrants, options or other rights
(in each case, other than upon exercise or exchange
of the Rights); provided, however, that a Person will
not be deemed the Beneficial Owner of, or to
Beneficially Own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange; or
(ii) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has or shares
the right to vote or dispose of, including
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pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if
such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (whether or not in writing) with such
other Person (or any of such other Person's
Affiliates or Associates) with respect to acquiring,
holding, voting or disposing of any securities of the
Company;
provided, however, that a Person will not be deemed the Beneficial Owner of, or
to Beneficially Own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) that (1) arises solely from a revocable proxy given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), (B) if such beneficial ownership arises solely
as a result of such Person's status as a "clearing agency," as defined in
Section 3(a)(23) of the Exchange Act, or (C) if such beneficial ownership arises
solely as a result of such Person's status as a disbursing agent for the holders
of claims pursuant to the Bankruptcy Plan; provided, further, however, that
nothing in this paragraph (d) will cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to Beneficially Own,
any securities acquired through such Person's participation in good faith in an
underwriting syndicate until the expiration of 40 calendar days after the date
of such acquisition, or such later date as the Directors of the Company may
determine in any specific case.
(e) "Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York
(or such other state in which the principal office of the
Rights Agent is located) are authorized or obligated by law or
executive order to close.
(f) "Close of Business" on any given date means 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is
not a Business Day it means 5:00 P.M., Eastern time, on the
next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company means
the shares of Common Stock, par value $0.01 per share, of the
Company; provided, however, that, if the Company is the
continuing or surviving corporation in a transaction described
in Section 13(a)(ii), "Common Shares" when used with reference
to the Company means shares of the capital stock or units of
the equity interests with the greatest aggregate voting power
of the Company. "Common Shares" when used with reference to
any corporation or other legal entity other than the Company,
including an Issuer, means shares of the capital stock or
units of the equity interests with the greatest aggregate
voting power of such Person (and, in the case of a Person not
organized in corporate form, which equity interests shall
represent the right to participate in profits, losses,
deductions and credits of such Person).
(h) "Company" means ▇▇▇▇▇▇▇ International, Inc., a Delaware
corporation.
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(i) "Distribution Date" means the earlier of: (i) the Close of
Business on the tenth calendar day following the Share
Acquisition Date, or (ii) the Close of Business on the tenth
Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by
the Board of Directors of the Company) after the commencement
of a tender or exchange offer by any Person (other than the
Company or any Related Person), if upon the consummation
thereof such Person would constitute an Acquiring Person
hereunder.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Exchange Ratio" has the meaning set forth in Section 24.
(l) "Exercise Value" has the meaning set forth in Section
11(a)(iii).
(m) "Expiration Date" means the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which
the Rights are redeemed as provided in Section 23, and (iii)
the time at which all exercisable Rights are exchanged as
provided in Section 24.
(n) "Final Expiration Date" means the tenth anniversary of the
Record Date.
(o) "Flip-in Event" means any event described in clauses (A), (B)
or (C) of Section 11(a)(ii).
(p) "Flip-over Event" means any event described in clauses (i),
(ii) or (iii) of Section 13(a).
(q) "Issuer" has the meaning set forth in Section 13(b).
(r) "Nasdaq" means The NASDAQ Stock Market.
(s) "Person" means any individual, firm, corporation or other
legal entity, and includes any successor (by merger or
otherwise) of such entity.
(t) "Preferred Shares" means shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of
the Company having the rights and preferences set forth in the
Certificate of Incorporation of the Company.
(u) "Purchase Price" means initially $75.00 per one one-hundredth
of a Preferred Share, subject to adjustment from time to time
as provided in this Agreement.
(v) "Record Date" has the meaning set forth in the Recitals to
this Agreement.
(w) "Redemption Price" means $0.01 per Right, subject to
adjustment by resolution of the Board of Directors of the
Company to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date.
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(x) "Related Person" means (i) any Subsidiary of the Company or
(ii) any employee benefit or stock ownership plan of the
Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan.
(y) "Right" has the meaning set forth in the Recitals to this
Agreement.
(z) "Right Certificates" means certificates evidencing the Rights,
in substantially the form attached as Exhibit A.
(aa) "Rights Agent" means ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, unless and until a successor Rights Agent has
become such pursuant to the terms of this Agreement,
whereupon, "Rights Agent" will mean such successor Rights
Agent.
(bb) "Securities Act" means the Securities Act of 1933, as amended.
(cc) "Share Acquisition Date" means the first date of public
announcement by the Company (by press release, filing made
with the Securities and Exchange Commission or otherwise) that
an Acquiring Person has become such.
(dd) "Subsidiary" when used with reference to any Person means any
corporation or other legal entity of which a majority of the
voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person;
provided, however, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any
corporation or other legal entity of which at least 20% of the
voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person.
(ee) "Trading Day" means any day on which the principal national
securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business
or, if the Common Shares are not listed or admitted to trading
on any national securities exchange, a Business Day.
(ff) "Triggering Event" means any Flip-in Event or Flip-over Event.
2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3, will also be, prior to the
Distribution Date, the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment and hereby certifies that it complies with the
requirements of the New York Stock Exchange governing transfer agents
and registrars. The Company may from time to time act as Co-Rights
Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable. Any actions that may be taken by the Rights Agent pursuant
to the terms of this Agreement may be taken by any such Co-Rights
Agent. To the extent that any Co-Rights Agent takes any action pursuant
to this Agreement, such Co-Rights Agent will be entitled to all of the
rights and protections of, and subject to all of the applicable duties
and obligations imposed upon, the Rights Agent pursuant to the terms of
this Agreement.
5
3. Issue of Right Certificates. (a) Until the Distribution Date,
(i) the Rights will be evidenced by the certificates representing
Common Shares registered in the names of the record holders thereof
(which certificates representing Common Shares will also be deemed to
be Right Certificates), (ii) the Rights will be transferable only in
connection with the transfer of the underlying Common Shares, and (iii)
the surrender for transfer of any certificates evidencing Common Shares
in respect of which Rights have been issued will also constitute the
transfer of the Rights associated with the Common Shares evidenced by
such certificates. On or as promptly as practicable after the Record
Date, the Company will send by first class, postage prepaid mail, to
each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the
Company as of such date, a copy of a Summary of Rights to Purchase
Preferred Stock in substantially the form attached as Exhibit B.
(b) Rights will be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or
exchange of any Right) issued or delivered by the Company
(whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of
the Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed
on, printed on, written on, or otherwise affixed to them the
following legend or such similar legend as the Company may
deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Common
Shares may from time to time be listed or quoted, or to
conform to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between ▇▇▇▇▇▇▇
International, Inc. and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association (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 ▇▇▇▇▇▇▇ International, Inc. The Rights
are not exercisable prior to the occurrence of certain events specified
in the Rights Agreement. Under certain circumstances, as set forth in
the Rights Agreement, such Rights may be redeemed, may be exchanged,
may expire, may be amended, or may be evidenced by separate
certificates and no longer be evidenced by this Certificate. ▇▇▇▇▇▇▇
International, Inc. will mail to the holder of this Certificate a copy
of the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under
certain circumstances as set forth in the Rights Agreement, Rights that
are or were beneficially owned by an Acquiring Person or any Affiliate
or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement) may become null and void.
(c) Any Right Certificate issued pursuant to this Section 3 that
represents Rights beneficially owned by an Acquiring Person or
any Associate or Affiliate thereof and any Right Certificate
issued at any time upon the transfer of any Rights to an
Acquiring Person or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate
and any Right Certificate issued pursuant
6
to Section 6 or 11 hereof upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in
this sentence, shall be subject to and contain the following
legend or such similar legend as the Company may deem
appropriate and as is not inconsistent with the provisions of
this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to
conform to usage:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was 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 become null and void in the circumstances
specified in Section 11(a)(ii) of the Rights Agreement.
(d) As promptly as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign and the Company will send or cause to be sent (and
the Rights Agent will, if requested, send), by first class,
insured, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the
Company, a Right Certificate evidencing one Right for each
Common Share so held, subject to adjustment as provided
herein. As of and after the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(e) In the event that the Company purchases or otherwise acquires
any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common
Shares will be deemed canceled and retired so that the Company
will not be entitled to exercise any Rights associated with
the Common Shares so purchased or acquired.
4. Form of Right Certificates. The Right Certificates (and the
form of election to purchase and the form of assignment to be printed
on the reverse thereof) will, when, as and if issued, be substantially
in the form attached as Exhibit A with such changes and 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 or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange or transaction reporting system on which the Rights may
from time to time be listed or quoted, or to conform to usage. Subject
to the provisions of Sections 11 and 22, the Right Certificates,
whenever issued, on their face will entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share as are
set forth therein at the Purchase Price set forth therein, but the
Purchase Price, the number and kind of securities issuable upon
exercise of each Right and the number of Rights outstanding will be
subject to adjustment as provided herein.
5. Countersignature and Registration. (a) The Right Certificates
will be executed on behalf of the Company by its Chairman of the Board,
its President or any Vice President,
7
either manually or by facsimile signature. The Right Certificates will
be countersigned manually by the Rights Agent and will not be valid for
any purpose unless so countersigned. In case any officer of the Company
who signed any of the Right Certificates ceases to be such officer of
the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the Person who signed
such Right Certificates had not ceased to be such officer of the
Company; and 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, is 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 officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the principal office of the Rights Agent
designated for such purpose and at such other offices as may
be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or any transaction reporting
system on which the Rights may from time to time be listed or
quoted, books for registration and transfer of the Right
Certificates issued hereunder. Such books will show the names
and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of each of the
Right Certificates.
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(d) and 14, at any time
after the Close of Business on the Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates
representing exercisable Rights may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case
may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine
or exchange any such Right Certificate or Rights Certificates must make
such request in a writing delivered to the Rights Agent and must
surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of
the Rights Agent designated for such purpose. Thereupon or as promptly
as practicable thereafter, subject to the provisions of Sections 7(d)
and 14, the Company will prepare, execute and deliver to the Rights
Agent, and the Rights Agent will countersign and deliver, a Right
Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(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
8
reasonably satisfactory to them, and, if requested by the
Company, 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 prepare, execute and deliver a
new Right Certificate of like tenor to the Rights Agent and
the Rights Agent will countersign and deliver such new Right
Certificate to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the Distribution Date and prior to the
Expiration Date, upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly executed, to
the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment in cash, in lawful
money of the United States of America by certified check or bank draft
payable to the order of the Company, equal to the sum of (i) the
exercise price for the total number of securities as to which such
surrendered Rights are exercised and (ii) an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with the provisions of Section 9(d).
(b) Upon receipt of a Right Certificate representing exercisable
Rights with the form of election to purchase duly executed,
accompanied by payment as described above, the Rights Agent
will promptly (i) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is
the transfer agent) certificates representing the number of
one one-hundredths of a Preferred Share to be purchased (and
the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests), or, if the
Company elects to deposit Preferred Shares issuable upon
exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred
Share as are to be purchased (and the Company hereby
irrevocably authorizes and directs such depositary agent to
comply with all such requests), (ii) after receipt of such
certificates (or depositary receipts, as the case may be),
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, (iii)
when appropriate, requisition from the Company or any transfer
agent therefor (or make available, if the Rights Agent is the
transfer agent) certificates representing the number of
equivalent common shares to be issued in lieu of the issuance
of Common Shares in accordance with the provisions of Section
11(a)(iii), (iv) when appropriate, after receipt of such
certificates, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder, (v) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of the issuance of
fractional shares in accordance with the provisions of Section
14 or in lieu of the issuance of Common Shares in accordance
with the provisions of Section 11(a)(iii), (vi) when
appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate, and
(vii) when
9
appropriate, deliver any due ▇▇▇▇ or other instrument provided
to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by
Section 11(l).
(c) In case the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, the
Company will prepare, execute and deliver a new Right
Certificate evidencing Rights equivalent to the Rights
remaining unexercised and the Rights Agent will countersign
and deliver such new Right Certificate to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will be obligated to
undertake any action with respect to any purported transfer,
split up, combination or exchange of any Right Certificate
pursuant to Section 6 or exercise of a Right Certificate as
set forth in this Section 7 unless the registered holder of
such Right Certificate has (i) completed and signed the
certificate following the form of assignment or the form of
election to purchase, as applicable, set forth on the reverse
side of the Right Certificate surrendered for such transfer,
split up, combination, exchange or exercise and (ii) provided
such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company may reasonably request.
8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange will, if surrendered to the Company or to
any of its stock transfer agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights
Agent, will be canceled by it, and no Right Certificates will be issued
in lieu thereof except as expressly permitted by the provisions of this
Agreement. The Company will deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent will so cancel and
retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will
deliver all canceled Right Certificates to the Company, or will, at the
written request of the Company, destroy such canceled Right
Certificates, and in such case will deliver a certificate of
destruction thereof to the Company.
9. Company Covenants Concerning Securities and Rights. The
Company covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred
Shares held in its treasury, a number of Preferred Shares that
will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.
(b) So long as the Preferred Shares (and, following the occurrence
of a Triggering Event, Common Shares and/or other securities)
issuable upon the exercise of the Rights may be listed on a
national securities exchange, or quoted on Nasdaq, it
10
will use its reasonable best efforts to cause, from and after
such time as the Rights become exercisable, all securities
reserved for issuance upon the exercise of Rights to be listed
on such exchange, or quoted on Nasdaq, upon official notice of
issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities)
delivered upon exercise of Rights, at the time of delivery of
the certificates for such securities, will be (subject to
payment of the Purchase Price) duly authorized, validly
issued, fully paid and nonassessable securities.
(d) It will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates and of any
certificates representing securities issued upon the exercise
of Rights; provided, however, that the Company will not be
required to pay any transfer tax or charge that may be payable
in respect of any transfer or delivery of Right Certificates
to a Person other than, or the issuance or delivery of
certificates or depositary receipts representing securities
issued upon the exercise of Rights in a name other than that
of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or deliver any
certificates or depositary receipts representing securities
issued upon the exercise of any Rights until any such tax or
charge has been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
(e) It will use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the Share
Acquisition Date and the Distribution Date, 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
120 days after the date set forth in clause (i) of the first
sentence of this Section 9(e), the exercisability of the
Rights in order to prepare and file such registration
statement and to permit it to become effective. Upon any such
suspension, the Company will issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In
addition, if the Company determines that a registration
statement should be filed under the Securities Act or any
state securities laws following the Distribution Date, the
Company may temporarily suspend the exercisability of the
Rights in each relevant jurisdiction until such time as a
registration statement has been declared effective and, upon
any such suspension,
11
the Company will 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 anything in
this Agreement to the contrary, the Rights will not be
exercisable in any jurisdiction if the requisite registration
or qualification in such jurisdiction has not been effected or
the exercise of the Rights is not permitted under applicable
law.
(f) Notwithstanding anything in this Agreement to the contrary,
after the later of the Share Acquisition Date and the
Distribution Date, it will not 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 eliminate or
otherwise diminish the benefits intended to be afforded by the
Rights.
(g) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Section
11, 13, 14 or 24 it will make all arrangements necessary so
that such other securities and/or cash are available for
distribution by the Rights Agent, if and when appropriate.
10. Record Date. Each Person in whose name any certificate
representing Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights
will for all purposes be deemed to have become the holder of record of
the Preferred Shares (or Common Shares and/or other securities, as the
case may be) represented thereby on, and such certificate will be
dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the transfer
books of the Company for the Preferred Shares (or Common Shares and/or
other securities, as the case may be) are closed, such Person will be
deemed to have become the record holder of such securities on, and such
certificate will be dated, the next succeeding Business Day on which
the transfer books of the Company for the Preferred Shares (or Common
Shares and/or other securities, as the case may be) are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right
Certificate will not be entitled to any rights of a holder of any
security for which the Rights are or may become exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions, or to exercise any preemptive rights, and will not be
entitled to receive any notice of any proceedings of the Company,
except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Securities or
Number of Rights. The Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event that the Company at any time after the
Record Date (A) declares a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivides the outstanding Preferred Shares, (C)
combines the outstanding Preferred Shares into a smaller number of
Preferred Shares, or (D) issues any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection
12
with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination
or reclassification and/or the number and/or kind of shares of capital
stock issuable on such date upon exercise of a Right, will be
proportionately adjusted so that the holder of any Right exercised
after such time is entitled to receive upon payment of the Purchase
Price then in effect the aggregate number and kind of shares of capital
stock that, if such Right had been exercised immediately prior to such
date and at a time when the transfer books of the Company for the
Preferred Shares were open, the holder of such Right would have owned
upon such exercise (and, in the case of a reclassification, would have
retained after giving effect to such reclassification) and would have
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in this Section
11(a)(i) will be in addition to, and will be made prior to, any
adjustment required pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or
Associate of any Acquiring Person, directly or indirectly, (1)
merges into the Company or otherwise combines with the Company
and the Company is the continuing or surviving corporation of
such merger or combination (other than in a transaction
subject to Section 13), (2) merges or otherwise combines with
any Subsidiary of the Company, (3) in one or more transactions
(otherwise than in connection with the exercise, exchange or
conversion of securities exercisable or exchangeable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries) transfers cash, securities
or any other property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of
any class of capital stock of the Company or any of its
Subsidiaries or for securities exercisable or exchangeable for
or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries, or otherwise obtains
from the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or securities
exercisable or exchangeable for or convertible into shares of
any class of capital stock of the Company or any of its
Subsidiaries (otherwise than as part of a pro rata
distribution to all holders of shares of any class of capital
stock of the Company, or any of its Subsidiaries), (4) sells,
purchases, leases, exchanges, mortgages, pledges, transfers or
otherwise disposes (in one or more transactions) to, from,
with or of, as the case may be, the Company or any of its
Subsidiaries (otherwise than in a transaction subject to
Section 13), any property, including securities, on terms and
conditions less favorable to the Company than the Company
would be able to obtain in an arm's-length transaction with an
unaffiliated third party, (5)
13
receives any compensation from the Company or any of its
Subsidiaries other than compensation as a director or a
regular full-time employee, in either case at rates consistent
with the Company's (or its Subsidiaries') past practices, or
(6) receives the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantage provided by the Company or any
of its Subsidiaries; or
(C) during such time as there is an Acquiring Person,
there is any reclassification of securities of the Company
(including any reverse stock split), or any recapitalization
of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries, or any other transaction or
series of transactions involving the Company or any of its
Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person), other than a transaction
subject to Section 13, that has the effect, directly or
indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries, or of
securities exercisable or exchangeable for or convertible into
equity securities of the Company or any of its Subsidiaries,
of which an Acquiring Person, or any Affiliate or Associate of
any Acquiring Person, is the Beneficial Owner;
then, and in each such case, from and after the latest of the
Distribution Date, the Share Acquisition Date and the date of the
occurrence of such Flip-in Event, proper provision will be made so that
each holder of a Right, except as provided below, will thereafter have
the right to receive, upon exercise thereof in accordance with the
terms of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the occurrence of such
Flip-in Event (or, if any other Flip-in Event shall have previously
occurred, the product of the then-current Purchase Price multiplied by
the number of one one-hundredths of a Preferred Share for which a Right
was exercisable immediately prior to the date of the first occurrence
of a Flip-in Event), in lieu of Preferred Shares, such number of Common
Shares as equals the result obtained by (x) multiplying the
then-current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
the date of the occurrence of such Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, multiplying the
then-current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
the date of the first occurrence of a Flip-in Event), and dividing that
product by (y) 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11(d)) on the date of the
occurrence of such Flip-in Event. Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (A) any
Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (B) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the occurrence
of a Flip-in Event, or (C) a transferee of
14
any Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the occurrence of a Flip-in
Event pursuant to either (1) a transfer from an Acquiring Person to
holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer that the Directors of the Company
have determined is part of a plan, arrangement or understanding that
has the purpose or effect of avoiding the provisions of this Section
11(a)(ii), and subsequent transferees of any of such Persons, will be
void without any further action and any holder of such Rights will
thereafter have no rights whatsoever with respect to such Rights under
any provision of this Agreement. The Company will use all reasonable
efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but will have no liability to any holder of Right
Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. Upon the occurrence of a Flip-in
Event, no Right Certificate that represents Rights that are or have
become void pursuant to the provisions of this Section 11(a)(ii) will
thereafter be issued pursuant to Section 3 or Section 6, and any Right
Certificate delivered to the Rights Agent that represents Rights that
are or have become void pursuant to the provisions of this Section
11(a)(ii) will be canceled. Upon the occurrence of a Flip-over Event,
any Rights that shall not have been previously exercised pursuant to
this Section 11(a)(ii) shall thereafter be exercisable (to the extent
they have not become void pursuant to this Section 11(a)(ii)) only
pursuant to Section 13 and not pursuant to this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are
not sufficient Common Shares authorized but unissued
or issued but not outstanding to permit the issuance
of all the Common Shares issuable in accordance with
Section 11(a)(ii) upon the exercise of a Right, the
Board of Directors of the Company will use its best
efforts promptly to authorize and, subject to the
provisions of Section 9(e), make available for
issuance additional Common Shares or other equity
securities of the Company having equivalent voting
rights and an equivalent value (as determined in good
faith by the Board of Directors of the Company) to
the Common Shares (for purposes of this Section
11(a)(iii), "equivalent common shares"). In the event
that equivalent common shares are so authorized, upon
the exercise of a Right in accordance with the
provisions of Section 7, the registered holder will
be entitled to receive (A) Common Shares, to the
extent any are available, and (B) a number of
equivalent common shares, which the Board of
Directors of the Company has determined in good faith
to have a value equivalent to the excess of (x) the
aggregate current per share market value on the date
of the occurrence of the most recent Flip-in Event of
all the Common Shares issuable in accordance with
Section 11(a)(ii) upon the exercise of a Right (the
"Exercise Value") over (y) the aggregate current per
share market value on the date of the occurrence of
the most recent Flip-in Event of any Common Shares
available for issuance upon the exercise of such
Right; provided, however,
15
that if at any time after 30 calendar days after the
latest of the Share Acquisition Date, the
Distribution Date and the date of the occurrence of
the most recent Flip-in Event, there are not
sufficient Common Shares and/or equivalent common
shares available for issuance upon the exercise of a
Right, then the Company will be obligated to deliver,
upon the surrender of such Right and without
requiring payment of the Purchase Price, Common
Shares (to the extent available), equivalent common
shares (to the extent available) and then cash (to
the extent permitted by applicable law and any
agreements or instruments to which the Company is a
party in effect immediately prior to the Share
Acquisition Date), which securities and cash have an
aggregate value equal to the excess of (1) the
Exercise Value over (2) the product of the
then-current Purchase Price multiplied by the number
of one one-hundredths of a Preferred Share for which
a Right was exercisable immediately prior to the date
of the occurrence of the most recent Flip-in Event
(or, if any other Flip-in Event shall have previously
occurred, the product of the then-current Purchase
Price multiplied by the number of one one-hundredths
of a Preferred Share for which a Right would have
been exercisable immediately prior to the date of the
occurrence of such Flip-in Event if no other Flip-in
Event had previously occurred). To the extent that
any legal or contractual restrictions prevent the
Company from paying the full amount of cash payable
in accordance with the foregoing sentence, the
Company will pay to holders of the Rights as to which
such payments are being made all amounts that are not
then restricted on a pro rata basis and will continue
to make payments on a pro rata basis as promptly as
funds become available until the full amount due to
each such Rights holder has been paid.
(b) In the event that the Company fixes a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or securities having equivalent
rights, privileges and preferences as the Preferred Shares
(for purposes of this Section 11(b), "equivalent preferred
shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the current per share
market price of the Preferred Shares (determined pursuant to
Section 11(d)) on such record date, the Purchase Price to be
in effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which is the
number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
per share market price and the denominator of which is the
number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription
16
or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration
part or all of which is in a form other than cash, the value
of such consideration will be as determined in good faith by
the Board of Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the
Company will not be deemed outstanding for the purpose of any
such computation. Such adjustment will be made successively
whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the
Purchase Price will be adjusted to be the Purchase Price that
would then be in effect if such record date had not been
fixed.
(c) In the event that the Company fixes a record date for the
making of a distribution to all holders of Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash
(other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or
subscription rights, options or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in
effect after such record date will be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which is the
current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d)) on such record date or,
if earlier, the date on which Preferred Shares begin to trade
on an ex-dividend or when issued basis for such distribution,
less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent) of the
portion of the evidences of indebtedness, cash, assets or
stock so to be distributed or of such subscription rights,
options or warrants applicable to one Preferred Share, and the
denominator of which is such current per share market price of
the Preferred Shares; provided, however, that in no event
shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock issuable upon exercise of one Right. Such
adjustments will be made successively whenever such a record
date is fixed; and in the event that such distribution is not
so made, the Purchase Price will again be adjusted to be the
Purchase Price that would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of Common Shares on any date will be
deemed to be the average of the daily closing prices per share of such
Common Shares for the 30 consecutive Trading Days immediately prior to
such date; provided, however, that in the event that the current per
share market price of the Common Shares is determined during a period
following the announcement by the issuer of such Common Shares of (A) a
dividend or distribution on such Common Shares payable in such Common
Shares or securities convertible into such Common Shares (other than
the Rights) or (B) any subdivision, combination or
17
reclassification of such Common Shares, and prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price will be appropriately adjusted to take into account
ex-dividend trading or to reflect the current per share market price
per Common Share equivalent. The closing price for each day will 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 Common Shares are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system
then in use, or, if on any such date the Common Shares are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Common Shares selected by the Board of Directors of the Company. If
the Common Shares are not publicly held or not so listed or traded, or
are not the subject of available bid and asked quotes, "current per
share market price" will mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the Rights
Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred
Shares will be determined in the same manner as set
forth above for Common Shares in Section 11(d)(i),
other than the last sentence thereof. If the current
per share market price of the Preferred Shares cannot
be determined in the manner provided above, the
"current per share market price" of the Preferred
Shares will be conclusively deemed to be an amount
equal to the current per share market price of the
Common Shares multiplied by one hundred (as such
number may be appropriately adjusted to reflect
events such as stock splits, stock dividends,
recapitalizations or similar transactions relating to
the Common Shares occurring after the date of this
Agreement). If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or
traded, or the subject of available bid and asked
quotes, "current per share market price" of the
Preferred Shares will mean the fair value per share
as determined in good faith by the Board of Directors
of the Company, whose determination will be described
in a statement filed with the Rights Agent. For all
purposes of this Agreement, the current per share
market price of one one-hundredth of a Preferred
Share will be equal to the current per share market
price of one Preferred Share divided by one hundred.
(e) Except as set forth below, no adjustment in the Purchase Price
will be required unless such adjustment would require an
increase or decrease of at least 1% in
18
such price; provided, however, that any adjustments that by
reason of this Section 11(e) are not required to be made will
be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 will be
made to the nearest cent or to the nearest one one-millionth
of a Preferred Share or one ten-thousandth of a Common Share
or other security, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required
by this Section 11 will be made no later than the earlier of
(i) three years from the date of the transaction that requires
such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised becomes
entitled to receive any securities of the Company other than
Preferred Shares, thereafter the number and/or kind of such
other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Preferred Shares (and the Purchase Price in
respect thereof) contained in this Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares (and the Purchase Price in respect thereof)
will apply on like terms to any such other securities (and the
Purchase Price in respect thereof).
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder will evidence
the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share issuable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price
pursuant to Section 11(b) or Section 11(c), each Right
outstanding immediately prior to the making of such adjustment
will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of
a Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths of a Preferred Share issuable
upon exercise of a Right immediately prior to such adjustment
of the Purchase Price 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
substitution for any adjustment in the number of one
one-hundredths of a Preferred Share issuable upon the exercise
of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights will be exercisable for the
number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the
number of Rights will become that number of Rights (calculated
to the nearest one ten-thousandth)
19
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 will 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. Such 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, will be at
least 10 calendar 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 will, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to the provisions of Section 14, the
additional Rights to which such holders are entitled as a
result of such adjustment, or, at the option of the Company,
will 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
are entitled after such adjustment. Right Certificates so to
be distributed will 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 will be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Without respect to any adjustment or change in the Purchase
Price and/or the number and/or kind of securities issuable
upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number and kind of securities that were
expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares or below the
then par value, if any, of any other securities of the Company
issuable upon exercise of the Rights, the Company will take
any corporate action that may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares or such
other securities, as the case may be, at such adjusted
Purchase Price.
(l) In any case in which this Section 11 otherwise requires 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 Preferred Shares or other securities of the Company,
if any, issuable upon such exercise over and above the number
of Preferred Shares or other securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however,
that the Company delivers to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's
20
right to receive such additional Preferred Shares or other
securities upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Agreement to the contrary,
the Company will 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 in its
good faith judgment the Board of Directors of the Company
determines to be advisable in order that any (i) consolidation
or subdivision of the Preferred Shares, (ii) issuance wholly
for cash of Preferred Shares at less than the current per
share market price therefor, (iii) issuance wholly for cash of
Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, (iv)
stock dividends, or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Shares is not taxable to
such stockholders.
(n) Notwithstanding anything in this Agreement to the contrary, in
the event that the Company at any time after the Record Date
prior to the Distribution Date (i) pays a dividend on the
outstanding Common Shares payable in Common Shares, (ii)
subdivides the outstanding Common Shares, (iii) combines the
outstanding Common Shares into a smaller number of shares, or
(iv) issues any shares of its capital stock in a
reclassification of the outstanding Common Shares (including
any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, will be proportionately
adjusted so that the number of Rights thereafter associated
with each Common Share following any such event equals the
result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a
fraction the numerator of which is the total number of Common
Shares outstanding immediately prior to the occurrence of the
event and the denominator of which is the total number of
Common Shares outstanding immediately following the occurrence
of such event. The adjustments provided for in this Section
11(n) will be made successively whenever such a dividend is
paid or such a subdivision, combination or reclassification is
effected.
12. Certificate of Adjusted Purchase Price or Number of
Securities. Whenever an adjustment is made as provided in Section 11 or
Section 13, the Company will promptly (a) prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Preferred Shares and the Common Shares a copy of such
certificate, and (c) if such adjustment is made after the Distribution
Date, mail a brief summary of such adjustment to each holder of a Right
Certificate in accordance with Section 26.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) In the event that:
21
(i) at any time after a Person has become an Acquiring
Person, the Company consolidates with, or merges with
or into, any other Person and the Company is not the
continuing or surviving corporation of such
consolidation or merger; or
(ii) at any time after a Person has become an Acquiring
Person, any Person consolidates with the Company, or
merges with or into the Company, and the Company is
the continuing or surviving corporation of such
merger or consolidation and, in connection with such
merger or consolidation, all or part of the Common
Shares is changed into or exchanged for stock or
other securities of any other Person or cash or any
other property; or
(iii) at any time after a Person has become an Acquiring
Person, the Company, directly or indirectly, sells or
otherwise transfers (or one or more of its
Subsidiaries sells or otherwise transfers), in one or
more transactions, assets or earning power (including
without limitation securities creating any obligation
on the part of the Company and/or any of its
Subsidiaries) representing in the aggregate more than
50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any Person or
Persons other than the Company or one or more of its
wholly owned Subsidiaries;
then, and in each such case, proper provision will be made so that from and
after the latest of the Share Acquisition Date, the Distribution Date and the
date of the occurrence of such Flip-over Event (A) each holder of a Right,
except as provided in Section 11(a), thereafter has the right to receive, upon
the exercise thereof in accordance with the terms of this Agreement at an
exercise price per Right equal to the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the Share Acquisition Date, such
number of duly authorized, validly issued, fully paid, nonassessable and freely
tradeable Common Shares of the Issuer, free and clear of any liens, encumbrances
and other adverse claims and not subject to any rights of call or first refusal,
as equals the result obtained by (x) multiplying the then-current Purchase Price
by the number of one one-hundredths of a Preferred Share for which a Right is
exercisable immediately prior to the Share Acquisition Date and dividing that
product by (y) 50% of the current per share market price of the Common Shares of
the Issuer (determined pursuant to Section 11(d)), on the date of the occurrence
of such Flip-over Event; (B) the Issuer will thereafter be liable for, and will
assume, by virtue of the occurrence of such Flip-over Event, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term "Company"
will thereafter be deemed to refer to the Issuer; and (D) the Issuer will take
such steps (including without limitation the reservation of a sufficient number
of its Common Shares to permit the exercise of all outstanding Rights) in
connection with such consummation as may be necessary to assure that the
provisions hereof are thereafter applicable, as nearly as reasonably may be
possible, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" means (i) in the
case of any Flip-over Event described in Sections 13(a)(i) or
(ii) above, the Person that is the continuing, surviving,
resulting or acquiring Person (including the Company as
22
the continuing or surviving corporation of a transaction
described in Section 13(a)(ii) above), and (ii) in the case of
any Flip-over Event described in Section 13(a)(iii) above, the
Person that is the party receiving the greatest portion of the
assets or earning power (including without limitation
securities creating any obligation on the part of the Company
and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however, that, in any
such case, (A) if (1) no class of equity security of such
Person is, at the time of such merger, consolidation or
transaction and has been continuously over the preceding
12-month period, registered pursuant to Section 12 of the
Exchange Act, and (2) such Person is a Subsidiary, directly or
indirectly, of another Person, a class of equity security of
which is and has been so registered, the term "Issuer" means
such other Person; and (B) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, a
class of equity security of two or more of which are and have
been so registered, the term "Issuer" means whichever of such
Persons is the issuer of the equity security having the
greatest aggregate market value. Notwithstanding the
foregoing, if the Issuer in any of the Flip-over Events listed
above is not a corporation or other legal entity having
outstanding equity securities, then, and in each such case,
(x) if the Issuer is directly or indirectly wholly owned by a
corporation or other legal entity having outstanding equity
securities, then all references to Common Shares of the Issuer
will be deemed to be references to the Common Shares of the
corporation or other legal entity having outstanding equity
securities that ultimately controls the Issuer, and (y) if
there is no such corporation or other legal entity having
outstanding equity securities, (I) proper provision will be
made so that the Issuer creates or otherwise makes available
for purposes of the exercise of the Rights in accordance with
the terms of this Agreement, a kind or kinds of security or
securities having a fair market value at least equal to the
economic value of the Common Shares that each holder of a
Right would have been entitled to receive if the Issuer had
been a corporation or other legal entity having outstanding
equity securities; and (II) all other provisions of this
Agreement will apply to the issuer of such securities as if
such securities were Common Shares.
(c) The Company will not consummate any Flip-over Event if, (i) at
the time of or immediately after such Flip-over Event, there
are or would be any rights, warrants, instruments or
securities outstanding or any agreements or arrangements in
effect that would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-over Event,
the stockholders of the Person who constitutes, or would
constitute, the Issuer for purposes of Section 13(a) shall
have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates, or (iii)
the form or nature of the organization of the Issuer would
preclude or limit the exercisability of the Rights. In
addition, the Company will not consummate any Flip-over Event
unless the Issuer has a sufficient number of authorized Common
Shares (or other securities as contemplated in Section 13(b)
above) that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior to such consummation the
Company and the Issuer have executed and delivered to the
23
Rights Agent a supplemental agreement providing for the terms
set forth in subsections (a) and (b) of this Section 13 and
further providing that as promptly as practicable after the
consummation of any Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under
the Securities Act with respect to the Rights and the
securities issuable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such
registration statement to (1) become effective as soon as
practicable after such filing and (2) remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(B) take all 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; and
(C) deliver to holders of the Rights historical
financial statements for the Issuer and each of its Affiliates
that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to
successive mergers or consolidations or sales or other
transfers. In the event that a Flip-over Event occurs at any
time after the occurrence of a Flip-in Event, except for
Rights that have become void pursuant to Section 11(a)(ii),
Rights that shall not have been previously exercised will
cease to be exercisable in the manner provided in Section
11(a)(ii) and will thereafter be exercisable in the manner
provided in Section 13(a).
14. Fractional Rights and Fractional Securities. (a) The Company
will not be required to issue fractions of Rights or to distribute
Right Certificates that evidence fractional Rights. In lieu of such
fractional Rights, the Company will pay as promptly as practicable to
the registered holders of the Right Certificates with regard to which
such fractional Rights otherwise would be issuable, an amount in cash
equal to the same fraction of the current market value of one Right.
For the purposes of this Section 14(a), the current market value of one
Right is the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights otherwise
would have been issuable. The closing price for any day is the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such
date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as
24
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If the Rights are
not publicly held or are not so listed or traded, or are not the
subject of available bid and asked quotes, the current market value of
one Right will mean the fair value thereof as determined in good faith
by the Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent.
(b) The Company will not be required to issue fractions of
Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates that
evidence fractional Preferred Shares (other than fractions
that are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary
receipts pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such
agreement provides that the holders of such depositary
receipts have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of
one one-hundredth of a Preferred Share, the Company may pay to
any Person to whom or which such fractional Preferred Shares
would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of one Preferred
Share. For purposes of this Section 14(b), the current market
value of one Preferred Share is the closing price of the
Preferred Shares (as determined in the same manner as set
forth for Common Shares in the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of
such exercise; provided, however, that if the closing price of
the Preferred Shares cannot be so determined, the closing
price of the Preferred Shares for such Trading Day will be
conclusively deemed to be an amount equal to the closing price
of the Common Shares (determined pursuant to the second
sentence of Section 11(d)(i)) for such Trading Day multiplied
by one hundred (as such number may be appropriately adjusted
to reflect events such as stock splits, stock dividends,
recapitalizations or similar transactions relating to the
Common Shares occurring after the date of this Agreement);
provided, further, however, that if neither the Common Shares
nor the Preferred Shares are publicly held or listed or
admitted to trading on any national securities exchange, or
the subject of available bid and asked quotes, the current
market value of one Preferred Share will mean the fair value
thereof as determined in good faith by the Board of Directors
of the Company, whose determination will be described in a
statement filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the Company
will not be required to issue fractions of Common Shares or
other securities issuable upon exercise or exchange of the
Rights or to distribute certificates that evidence any such
fractional securities. In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which
such fractional securities would otherwise be issuable an
amount in cash equal to the same fraction of the current
market value of one such security. For purposes of this
Section 14(c), the
25
current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the
closing price thereof (as determined in the same manner as set
forth for Common Shares in the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of
such exercise or exchange; provided, however, that if neither
the Common Shares nor any such other securities are publicly
held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked
quotes, the current market value of one Common Share or such
other security will mean the fair value thereof as determined
in good faith by the Board of Directors of the Company, whose
determination will mean the fair value thereof as will be
described in a statement filed with the Rights Agent.
15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of
any Right Certificate (or, prior to the Distribution Date, of the
Common Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution
Date, of the holder of any Common Shares), may in his own behalf and
for his own benefit enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive
relief against actual or threatened violations of the obligations of
any Person subject to this Agreement.
16. Agreement of Rights 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 evidenced
by the certificates representing Common Shares registered in
the names of the record holders thereof (which certificates
representing Common Shares will also be deemed to be Rights
Certificates) and are transferable only in connection with the
transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the
26
Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the
associated Common Share certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent will be affected
by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise
or exchange of a Right, except as otherwise provided in
Section 14.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent will 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, however, that the
Company will use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as
possible.
17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate will be entitled to vote, receive
dividends, or be deemed for any purpose the holder of Preferred Shares
or any other securities of the Company that may at any time be issuable
upon the exercise of the Rights represented thereby, nor will anything
contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of
Directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders
(except as provided in Section 25), 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 of this Agreement or exchanged pursuant to the
provisions of Section 24.
18. Concerning the Rights Agent. (a) The Company will pay to the
Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred
in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company will also
indemnify the Rights Agent for, and hold it harmless against, any loss,
liability, suit, action, proceeding or expense, incurred without
negligence, bad faith, or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.
27
(b) The Rights Agent will be protected and will incur no liability
for or in respect of any action taken, suffered, or omitted by
it in connection with its administration of this Agreement in
reliance upon any Right Certificate or certificate evidencing
Preferred Shares or Common Shares or other securities of the
Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed, and,
where necessary, verified or acknowledged, by the proper
Person or Persons.
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 is a party, or any
corporation succeeding to the corporate trust business of the Rights
Agent or any successor Rights Agent, will 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. If at the
time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if 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 will have the full force
provided in the Right Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent changes and at
such time any of the Right Certificates have been
countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right
Certificates so countersigned; and if at that time any of the
Right Certificates have not 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 will have the full force provided in the
Right Certificates and in this Agreement.
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, will 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 will 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 deems it necessary or desirable that any fact
or matter be proved or established by
28
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the President, any Vice
President, the Secretary or the Treasurer of the Company and
delivered to the Rights Agent, and such certificate will be
full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will 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 will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof
by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor will it be responsible for any
breach by the Company of any covenant contained in this
Agreement or in any Right Certificate; nor will it be
responsible for any adjustment required under the provisions
of Sections 11 or 13 (including any adjustment that results in
Rights becoming void) or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such
adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any shares of stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of stock or other securities will,
when issued, be duly authorized, validly issued, fully paid
and nonassessable.
(f) The Company will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the
President, any Vice President, the Secretary or the Treasurer
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be
liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such
officer.
29
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein will
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 will not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment
thereof. The Rights Agent will not be under any duty or
responsibility to ensure compliance with any applicable
federal or state securities laws in connection with the
issuance, transfer or exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or
exchange, either (i) the certificate attached to the form of
assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, or (ii) any other actual or
suspected irregularity exists, the Rights Agent will not take
any further action with respect to such requested exercise,
transfer, split up, combination or exchange without first
consulting with the Company, and will thereafter take further
action with respect thereto only in accordance with the
Company's written instructions.
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 calendar days' notice in writing mailed to the
Company and to each transfer agent of the Preferred Shares or the
Common Shares by registered or certified mail, and 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 calendar 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 Preferred
Shares and the Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first class mail. If the
Rights Agent resigns or is removed or otherwise becomes incapable of
acting, the Company will appoint a successor to the Rights Agent. If
the Company fails to make such appointment within a period of 30
calendar 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 will, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, will be a corporation or
other legal entity organized and doing business under the laws of the
United States or of the State of New York (or of any other state of
30
the United States so long as such corporation is authorized to do
business as a banking institution in the State of New York), in good
standing, having a principal office in the State of New York, that is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million.
After appointment, the successor Rights Agent will 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 will 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 will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Preferred
Shares or the Common Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
will 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.
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 per share and
the number or kind of securities issuable upon exercise of the Rights
made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale by the Company of Common Shares
following the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold
pursuant to the exercise, exchange or conversion of securities (other
than Rights) issued prior to the Distribution Date that are exercisable
or exchangeable for, or convertible into Common Shares, and (b) may, in
any other case, if deemed necessary, appropriate or desirable by the
Board of Directors of the Company, issue Right Certificates
representing an equivalent number of Rights as would have been issued
in respect of such Common Shares if they had been issued or sold prior
to the Distribution Date, as appropriately adjusted as provided herein
as if they had been so issued or sold; provided, however, that (i) no
such Right Certificate will be issued if, and to the extent that, in
its good faith judgment the Board of Directors of the Company
determines that the issuance of such Right Certificate could have a
material adverse tax consequence to the Company or to the Person to
whom or which such Right Certificate otherwise would be issued and (ii)
no such Right Certificate will be issued if, and to the extent that,
appropriate adjustment otherwise has been made in lieu of the issuance
thereof.
23. Redemption. (a) Prior to the Expiration Date, the Board of
Directors of the Company may, at its option, redeem all but not less
than all of the then-outstanding Rights at the Redemption Price at any
time prior to the Close of Business on the later of (i) the
Distribution Date and (ii) Share Acquisition Date. Any such redemption
will be effective immediately upon the action of the Board of Directors
of the Company ordering the same, unless such action of the Board of
Directors of the Company expressly provides that such redemption will
be effective at a subsequent time or upon the
31
occurrence or nonoccurrence of one or more specified events (in which
case such redemption will be effective in accordance with the
provisions of such action of the Board of Directors of the Company).
(b) Immediately upon the effectiveness of the redemption of the
Rights as provided in Section 23(a), and without any further
action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of
the redemption of the Rights as provided in Section 23(a), the
Company will publicly announce such redemption and, within 10
calendar days thereafter, will give notice of such redemption
to the holders of the then-outstanding Rights by mailing such
notice to all such holders at their last addresses as they
appear upon the registry books of the Company; provided,
however, that the failure to give, or any defect in, any such
notice will not affect the validity of the redemption of the
Rights. Any notice that is mailed in the manner herein
provided will be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the
holders of Rights will state the method by which the payment
of the Redemption Price will be made. The Company may, at its
option, pay the Redemption Price in cash, Common Shares (based
upon the current per share market price of the Common Shares
(determined pursuant to Section 11(d)) at the time of
redemption), or any other form of consideration deemed
appropriate by the Board of Directors of the Company (based
upon the fair market value of such other consideration,
determined by the Board of Directors of the Company in good
faith) or any combination thereof. The Company may, at its
option, combine the payment of the Redemption Price with any
other payment being made concurrently to holders of Common
Shares and, to the extent that any such other payment is
discretionary, may reduce the amount thereof on account of the
concurrent payment of the Redemption Price. If legal or
contractual restrictions prevent the Company from paying the
Redemption Price (in the form of consideration deemed
appropriate by the Board of Directors) at the time of
redemption, the Company will pay the Redemption Price, without
interest, promptly after such time as the Company ceases to be
so prevented from paying the Redemption Price.
24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after the later of the Share Acquisition Date
and the Distribution Date, exchange all or part of the then-outstanding
and exercisable Rights (which will not include Rights that have become
void pursuant to the provisions of Section 11(a)(ii)) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Any such exchange
will be effective immediately upon the action of the Board of Directors
of the Company ordering the same, unless such action of the Board of
Directors of the Company expressly provides that such exchange will be
effective at a subsequent time or upon the occurrence or nonoccurrence
of one or more specified events (in which case such exchange will be
effective in accordance with the provisions of such action of the
32
Board of Directors of the Company). Notwithstanding the foregoing, the
Board of Directors of the Company will not be empowered to effect such
exchange at any time after any Person (other than the Company or any
Related Person), who or which, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more
of the then-outstanding Common Shares.
(b) Immediately upon the effectiveness of the exchange of any
Rights as provided in Section 24(a), and without any further
action and without any notice, the right to exercise such
Rights will terminate and the only right with respect to such
Rights thereafter of the holder of such Rights will be to
receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange
Ratio. Promptly after the effectiveness of the exchange of any
Rights as provided in Section 24(a), the Company will publicly
announce such exchange and, within 10 calendar days
thereafter, will give notice of such exchange to all of the
holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent; provided,
however, that the failure to give, or any defect in, such
notice will not affect the validity of such exchange. Any
notice that is mailed in the manner herein provided will be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights that will be exchanged. Any partial exchange will be
effected pro rata based on the number of Rights (other than
Rights that have become void pursuant to the provisions of
Section 11(a)(ii)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute for any Common Share exchangeable
for a Right (i) equivalent common shares (as such term is used
in Section 11(a)(iii)), (ii) cash, (iii) debt securities of
the Company, (iv) other assets, or (v) any combination of the
foregoing, in any event having an aggregate value, as
determined in good faith by the Board of Directors of the
Company (whose determination will be described in a statement
filed with the Rights Agent), equal to the current market
value of one Common Share (determined pursuant to Section
11(d)) on the Trading Day immediately preceding the date of
the effectiveness of the exchange pursuant to this Section 24.
25. Notice of Certain Events. (a) If, after the Distribution Date,
the Company proposes (i) to pay any dividend payable in stock of any
class to the holders of Preferred Shares or to make any other
distribution to the holders of Preferred Shares (other than a regular
periodic cash dividend), (ii) to offer to the holders of Preferred
Shares rights, options or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv)
to effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of
assets or earning power (including, without limitation, securities
creating any obligation on the
33
part of the Company and/or any of its Subsidiaries) representing more
than 50% of the assets and earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons other
than the Company or one or more of its wholly owned Subsidiaries, (v)
to effect the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or
reclassification of the Common Shares then, in each such case, the
Company will give to each holder of a Right Certificate, to the extent
feasible and in accordance with Section 26, a notice of such proposed
action, which specifies the record date for the purposes of such stock
dividend, distribution or offering of rights, options or warrants, or
the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of the Common Shares
and/or Preferred Shares, if any such date is to be fixed, and such
notice will be so given, in the case of any action covered by clause
(i) or (ii) above, at least 10 calendar days prior to the record date
for determining holders of the Preferred Shares for purposes of such
action, and, in the case of any such other action, at least 10 calendar
days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares
and/or Preferred Shares, whichever is the earlier.
(b) In case any Triggering Event occurs, then, in any such case,
the Company will as soon as practicable thereafter give to the
Rights Agent and each holder of a Right Certificate, in
accordance with Section 26, a notice of the occurrence of such
event, which specifies the event and the consequences of the
event to holders of Rights.
26. Notices. (a) Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company will be sufficiently given or made if
sent by first class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
▇▇▇▇▇▇▇ International, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent will be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
▇▇▇▇▇ Fargo Bank Minnesota, National Association
Corporate Trust
Sixth and Marquette
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Administrator
34
(c) 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, if prior the Distribution Date, to the
holder of any certificate evidencing Common Shares) will be
sufficiently given or made if sent by first class mail,
postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
27. Supplements and Amendments. Prior to the time at which the
Rights cease to be redeemable pursuant to Section 23, and subject to
the last sentence of this Section 27, the Company may in its sole and
absolute discretion, and the Rights Agent will if the Company so
directs, supplement or amend any provision of this Agreement in any
respect without the approval of any holders of Rights or Common Shares.
From and after the time at which the Rights cease to be redeemable
pursuant to Section 23, and subject to the last sentence of this
Section 27, the Company may, and the Rights Agent will if the Company
so directs, supplement or amend this Agreement without the approval of
any holders of Rights or Common Shares in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to
supplement or amend the provisions hereunder in any manner that the
Company may deem desirable; provided that no such supplement or
amendment shall adversely affect the interests of the holders of Rights
as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), and no such supplement or amendment shall cause
the Rights again to become redeemable or cause this Agreement again to
become supplementable or amendable otherwise than in accordance with
the provisions of this sentence. Without limiting the generality or
effect of the foregoing, this Agreement may be supplemented or amended
to provide for such voting powers for the Rights and such procedures
for the exercise thereof, if any, as the Board of Directors of the
Company may determine to be appropriate. Upon the delivery of a
certificate from an officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of
this Section 27, the Rights Agent will execute such supplement or
amendment; provided, however, that the failure or refusal of the Rights
Agent to execute such supplement or amendment will not affect the
validity of any supplement or amendment adopted by the Board of
Directors of the Company, any of which will be effective in accordance
with the terms thereof. Notwithstanding anything in this Agreement to
the contrary, no supplement or amendment may be made that decreases the
stated Redemption Price to an amount less than $.01 per Right.
28. Successors; Certain Covenants. All the covenants and
provisions of this Agreement by or for the benefit of the Company or
the Rights Agent will be binding on and inure to the benefit of their
respective successors and assigns hereunder.
29. Benefits of This Agreement. Nothing in this Agreement will 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 Common Shares) any legal or equitable
right, remedy or claim under this Agreement. This Agreement will be for
the sole and exclusive benefit of the Company, the Rights Agent, and
the registered holders of the Right Certificates (or prior to the
Distribution Date, the Common Shares).
35
30. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder will be deemed to be a contract made under
the internal substantive laws of the State of Delaware and for all
purposes will be governed by and construed in accordance with the
internal substantive laws of such State applicable to contracts to be
made and performed entirely within such State.
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 will
remain in full force and effect and will in no way be affected,
impaired or invalidated; provided, however, that nothing contained in
this Section 31 will affect the ability of the Company under the
provisions of Section 27 to supplement or amend this Agreement to
replace such invalid, void or unenforceable term, provision, covenant
or restriction with a legal, valid and enforceable term, provision,
covenant or restriction.
32. Descriptive Headings, Etc. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will
not control or affect the meaning or construction of any of the
provisions hereof. Unless otherwise expressly provided, references
herein to Articles, Sections and Exhibits are to Articles, Sections and
Exhibits of or to this Agreement.
33. Determinations and Actions by the Board. For all purposes of
this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares
of which any Person is the Beneficial Owner, will be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the
Company will have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to
the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement,
including without limitation the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement
(including any determination as to whether particular Rights shall have
become void). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, any
omission with respect to any of the foregoing) that are done or made by
the Board of Directors of the Company in good faith will (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 to any liability to any Person, including
without limitation the Rights Agent and the holders of the Rights.
34. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be
deemed to be an original, and all such counterparts will together
constitute but one and the same instrument.
36
[SIGNATURES ON NEXT PAGE]
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By: ___________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and General
Counsel
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By: ___________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
38
EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. R-____________ __________ Rights
NOT EXERCISABLE AFTER JULY 3, 2013 (SUBJECT TO POSSIBLE EXTENSION AT THE OPTION
OF THE BOARD OF DIRECTORS OF THE COMPANY) OR EARLIER IF REDEEMED, EXCHANGED OR
AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
Right Certificate
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of June 23, 2003 (the "Rights Agreement"), between
▇▇▇▇▇▇▇ International, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇
Fargo Bank Minnesota, National Association (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on the
Expiration Date (as such term is defined in the Rights Agreement) at the
principal office or offices of the Rights Agent designated for such purpose, one
one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $75.00 per one one-hundredth of
a Preferred Share (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase and related
Certificate duly executed. If this Right Certificate is exercised in part, the
holder will be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
The number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share that may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of the date of the Rights Agreement, based on the Preferred
Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the
number and/or kind of securities issuable upon the exercise of the Rights
evidenced by this Right Certificate are subject to adjustment upon the
occurrence of certain events.
A-1
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 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 the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and can
be obtained from the Company without charge upon written request therefor. Terms
used herein with initial capital letters and not defined herein are used herein
with the meanings ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a
Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (ii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-in Event pursuant to
either (a) a transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (b) a transfer
that the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding that has the purpose or effect of avoiding certain
provisions of the Rights Agreement, and subsequent transferees of any of such
Persons, will be void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such Rights under any
provision of the Rights Agreement. From and after the occurrence of a Flip-in
Event, no Right Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights Agreement, and any
Right Certificate delivered to the Rights Agent that represents Rights that are
or have become void pursuant to the provisions of the Rights Agreement will be
canceled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as
the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred Shares
(other than fractions that are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other securities, the Company may make a cash payment, as provided in the
Rights Agreement.
A-2
No holder of this Right Certificate, as such, will be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company that may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor will
anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate have been exercised in accordance with the
provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ________, ____.
ATTEST: ▇▇▇▇▇▇▇ INTERNATIONAL, INC.
_________________________________ By: _____________________________
Name:
Title:
Countersigned:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By: ____________________________
Authorized Signature
A-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name 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: ____________, ____
___________________________________
Signature
Signature Guaranteed:
A-4
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such 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: _____________, ____
___________________________________
Signature
A-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To ▇▇▇▇▇▇▇ International, Inc.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Right Certificate to purchase the one one-hundredths of a
Preferred Share or other securities issuable upon the exercise of such 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 is not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:
Please insert social security
or other identifying number: ___________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: _____________, ____
___________________________________
Signature
Signature Guaranteed:
A-6
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 Person (as such terms are
defined pursuant to 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: _____________, ____
___________________________________
Signature
NOTICE
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO
PURCHASE AND IN THE RELATED CERTIFICATES 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.
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE PROGRAM) PURSUANT TO RULE 17Ad-15
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
Pursuant to the confirmation order entered by the United States
Bankruptcy Court for the Western District of New York in Jointly Administered
Case Nos. 01-14099K through 01-14104K approving the Third Amended Joint Plan of
Reorganization, dated January 23, 2003, the Board of Directors of ▇▇▇▇▇▇▇
International, Inc. adopted a rights plan and will effect a distribution of one
preferred share purchase right for each outstanding share of ▇▇▇▇▇▇▇
International, Inc.'s Common Stock, par value $0.01 per share. The distribution
is payable on the day that is ten days after the effective date of the Third
Amended Joint Plan of Reorganization. The terms of the rights and the rights
plan are set forth in a Rights Agreement, dated as of June 23, 2003, by and
between ▇▇▇▇▇▇▇ International, Inc. and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as rights agent.
Our Board adopted the rights plan to protect our stockholders from
coercive takeover practices or takeover bids that are inconsistent with their
best interests. In general terms, the rights plan imposes a significant penalty
upon any person or group that acquires 15% or more of our outstanding common
stock (or, in the case of a person or group that acquired 15% or more of our
outstanding common stock solely as a result of distributions made pursuant to
the bankruptcy plan on account of certain allowed unsecured claims, an
additional 1% or more of our outstanding common stock) without the prior
approval of our Board. A person or group that acquires a percentage of our
common stock in excess of the applicable threshold is called an "acquiring
person." Any rights held by an acquiring person are void and may not be
exercised.
This summary of rights provides a general description of the rights
plan. Because it is only a summary, this description should be read together
with the entire rights plan, which we incorporate in this summary by reference.
Upon written request, we will provide a copy of the rights plan free of charge
to any stockholder.
THE RIGHTS. We will effect a distribution of one right per each outstanding
share of our common stock on July 3, 2003. If the rights become exercisable,
each right would allow its holder to purchase from us one one-hundredth of a
share of our Series A Junior Participating Preferred Stock for a purchase price
of $75.00. Each fractional share of preferred stock would give the stockholder
approximately the same dividend, voting and liquidation rights as does one share
of our common stock. Prior to exercise, however, a right does not give its
holder any dividend, voting or liquidation rights.
EXERCISABILITY. The rights will not be exercisable until the earlier of:
- 10 days after a public announcement by ▇▇▇▇▇▇▇ International, Inc. that
a person or group has become an acquiring person; and
- 10 business days (or a later date determined by our Board) after a
person or group begins a tender or exchange offer that, if completed,
would result in that person or group becoming an acquiring person.
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We refer to the date that the rights become exercisable as the "distribution
date." Until the distribution date, our common stock certificates will also
evidence the rights and will contain a notation to that effect. Any transfer of
shares of common stock prior to the distribution date will constitute a transfer
of the associated rights. After the distribution date, the rights will separate
from the common stock and be evidenced by rights certificates, which we will
mail to all holders of rights that have not become void.
FLIP-IN EVENT. After the distribution date, if a person or group
already is or becomes an acquiring person, all holders of rights, except the
acquiring person, may exercise their rights upon payment of the purchase price
to purchase shares of our common stock (or other securities or assets as
determined by the Board) with a market value of two times the purchase price.
FLIP-OVER EVENT. After the distribution date, if a flip-in event has
already occurred and ▇▇▇▇▇▇▇ International, Inc. is acquired in a merger or
similar transaction, all holders of rights except the acquiring person may
exercise their rights upon payment of the purchase price, to purchase shares of
the acquiring corporation with a market value of two times the purchase price of
the rights.
Rights may be exercised to purchase our preferred shares only after the
distribution date occurs and prior to the occurrence of a flip-in event as
described above. A distribution date resulting from the commencement of a tender
offer or exchange offer described in the second bullet point above could precede
the occurrence of a flip-in event, in which case the rights could be exercised
to purchase our preferred shares. A distribution date resulting from any
occurrence described in the first bullet point above would necessarily follow
the occurrence of a flip-in event, in which case the rights could be exercised
to purchase shares of common stock or other securities as described above.
EXPIRATION. The rights will expire on July 3, 2013.
REDEMPTION. Our Board may redeem all (but not less than all) of the rights for a
redemption price of $0.01 per right at any time before the later of the
distribution date and the date of the first public announcement or disclosure by
▇▇▇▇▇▇▇ International, Inc. that a person or group has become an acquiring
person. Once the rights are redeemed, the right to exercise rights will
terminate, and the only right of the holders of rights will be to receive the
redemption price. The redemption price will be adjusted if we declare a stock
split or issue a stock dividend on our common stock.
EXCHANGE. After the later of the distribution date and the date of the first
public announcement by ▇▇▇▇▇▇▇ International, Inc. that a person or group has
become an acquiring person, but before an acquiring person owns 50% or more of
our outstanding common stock, our Board may exchange each right (other than
rights that have become void) for one share of common stock or an equivalent
security.
ANTI-DILUTION PROVISIONS. Our Board may adjust the purchase price of the
preferred shares, the number of preferred shares issuable and the number of
outstanding rights to prevent dilution that may occur as a result of certain
events, including among others, a stock dividend, a stock split or
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a reclassification of the preferred shares or our common stock. No adjustments
to the purchase price of less than 1% will be made.
AMENDMENTS. Before the time rights cease to be redeemable, our Board may amend
or supplement the rights plan without the consent of the holders of the rights,
except that no amendment may decrease the redemption price below $0.01 per
right. At any time thereafter, our Board may amend or supplement the rights plan
only to cure an ambiguity, to alter time period provisions, to correct
inconsistent provisions or to make any additional changes to the rights plan,
but only to the extent that those changes do not impair or adversely affect any
rights holder and do not result in the rights again becoming redeemable.
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