RIGHTS AGREEMENT
Rights Agreement, dated as of April 30, 1999 (the "Agreement"), between CBL
& Associates Properties, Inc., a Delaware corporation (the "Company"), and
BankBoston, N.A., a national banking association (the "Rights Agent").
WHEREAS, on April 30, 1999 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend of one
Right for each share of Common Stock (as defined herein) of the Company
outstanding at the Close of Business (as defined herein) on the Record Date (as
defined herein), and has authorized the issuance of one Right with respect to
each share of Common Stock of the Company issued between the Record Date
(whether originally issued or delivered from the Company's treasury) and the
Distribution Date (as hereinafter defined), each Right initially representing
the right to purchase one ten-thousandth of a share of Series 1999 Junior
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences and
Rights attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, (iv) any Person
or entity holding shares of Common Stock for or pursuant to the terms of any
such plan to the extent, and only to the extent, of such shares so held, or (v)
any member of the Lebovitz Group. Notwithstanding the foregoing, (i) no Person
shall become an "Acquiring Person" as the result of an acquisition of shares of
Common Stock by the Company which, by reducing the number of shares of Common
Stock outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 15% or more of the shares of Common Stock
of the Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional shares of Common Stock of the Company, then such Person shall be
deemed to be an "Acquiring Person" if such Person is then the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding; and (ii) if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of Common Stock
so that such Person would no longer be an "Acquiring Person," then such Person
shall not be deemed an "Acquiring
Person" for any purposes of this Agreement unless and until such Person shall
again become an "Acquiring Person." The term "outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then issued and outstanding which such Person
would be deemed to beneficially own hereunder.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
(c) "Agreement" shall mean this Rights Agreement as originally executed or
as it may from time to time be supplemented or amended pursuant to the
applicable provisions hereof.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, 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, other
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange; or
(B) securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights
were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act, and
(B) is not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
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(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing), for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (d)) or
disposing of any voting securities of the Company; provided, however, that
nothing in this paragraph (d) shall 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 a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
Notwithstanding the foregoing, a Person shall not be deemed the
"Beneficial Owner" of any shares of Common Stock issuable upon exchange of
such Person's Beneficial Ownership of units of limited partnership interest
of the Operating Partnership.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York or the state in which
the principal office of the Rights Agent is located are authorized or obligated
by law or executive order to close.
(g) "Certificate of Incorporation" shall mean the Company's Amended and
Restated Certificate of Incorporation, as amended.
(h) "Close of Business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is not a Business Day,
it shall mean 5:00 P.M., Eastern time, on the next succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par value $.01 per share,
of the Company, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the class of capital stock with the
greatest aggregate voting power, or the class of equity securities or other
equity interests having power to control or direct the management, of such
Person.
(j) "Company" shall mean CBL & Associates Properties, Inc., a Delaware
corporation.
(k) "Distribution Date" shall mean the earlier of (i) the Close of Business
on the tenth day after the Stock Acquisition Date (or, if the tenth day after
the Stock Acquisition Date occurs before the Record Date, the Close of Business
on the Record Date), or (ii) the Close of Business on the tenth Business Day
(or, if such tenth Business Day occurs before the Record Date, the Close of
Business on the Record Date), or such specified or unspecified later date on or
after the Record Date as may be determined by action of the Board prior to such
time as any person becomes an Acquiring Person, after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company or any employee benefit plan of the Company or of any Subsidiary of the
Company or any Person or entity holding shares of
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Common Stock for or pursuant to the terms of any such plan or any member of the
Lebovitz Group) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(m) "Exchange Date" shall have the meaning set forth in Section 7(a)
hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(p) "Lebovitz Group" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and members of his
family.
(q) "Operating Partnership" shall mean CBL & Associates Limited
Partnership, a Delaware limited partnership.
(r) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(s) "Preferred Stock" shall mean the Series 1999 Junior Participating
Preferred Stock, par value $.01 per share, of the Company.
(t) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(u) "Purchase Price" shall have the meaning set forth in Section 4(a) and
11(a)(ii) hereof.
(v) "Record Date" shall mean the Close of Business on May 14, 1999.
(w) "Redemption Period" shall have the meaning set forth in Section 23(a)
hereof.
(x) "Rights Agent" shall mean BankBoston, N.A., a national banking
association.
(y) "Rights Certificate" shall have the meaning set forth in Section 3
hereof.
(z) "Rights Dividend Declaration Date" shall mean the Close of Business on
April 30, 1999.
(aa) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
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(bb) "Section 13 Event" shall mean any event described in clause (x), (y)
or (z) of Section 13(a) hereof.
(cc) "Securities Act" shall mean the Securities Act of 1933, as amended.
(dd) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
(ee) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interests is owned, directly or indirectly, by such Person, or is
otherwise controlled by such Person.
(ff) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the shares of Common
Stock) in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable, upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions or any
such Co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) As promptly as practicable following the Record Date, the Company will
send or deliver a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
to each record holder of shares of Common Stock as of the Close of Business on
the Record Date at the address of such holder shown on the records of the
Company. With respect to certificates for shares of Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for the shares of Common Stock and the registered holders of
the shares of Common Stock shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier Expiration Date),
the transfer of any certificate representing shares of Common Stock in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby.
(b) Rights shall be issued in respect of all shares of Common Stock issued
(whether originally issued or from the Company's treasury and including, without
limitation, shares of Common Stock issued upon exchange of common units of the
Operating Partnership) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Rights shall also be issued to the
extent provided in Section 22 in respect of all shares of
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Common Stock which are issued (whether originally issued or from the Company's
treasury) after the Distribution Date and prior to the Expiration Date.
Certificates representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend (in addition to any
other legends that may be required):
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between CBL & Associates
Properties, Inc. (the "Company") and BankBoston, N.A. (the "Rights Agent")
dated as of April 30, 1999 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy
of the Rights Agreement as in effect on the date of mailing without charge
after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void. The Rights
shall not be exercisable, and shall be void so long as held, by a holder in
any jurisdiction where the requisite qualification of the issuance to such
holder, or the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the shares of Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of shares
of Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any such certificate shall also constitute the transfer of
the Rights associated with the shares of Common Stock represented thereby.
(c) Until the Distribution Date (i) the Rights will be evidenced (subject
to the provisions of paragraph (a) of this Section 3) by the certificates for
shares of Common Stock registered in the names of the holders thereof (which
certificates for shares of Common Stock shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (ii) the Rights will
be transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company).
(d) As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, postage prepaid mail, to each record holder of shares
of Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Rights
Certificate, in substantially the form of Exhibit C hereto, evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make necessary and
appropriate rounding adjustments (in accordance with
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Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall be substantially the same
as Exhibit C hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law 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. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to purchase such number of one
ten-thousandths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per one ten-thousandth of a
share, the "Purchase Price"), but the amount and type of securities purchasable
upon exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(d) or Section 22
hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person; (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such; or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the directors of the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section
7(e) of such Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Vice Chairman, President, Chief Financial Officer or
any Executive or Senior Vice President either manually or by facsimile
signature, and have affixed thereto the
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Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights 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 Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of one ten-thousandths of a share of Preferred Stock (or following
a Triggering Event, Common Stock, other securities, cash, or other assets, as
the case may be) as the Rights Certificate or 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
Rights Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the person
entitled thereto a Rights Certificate or 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 Rights Certificates.
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(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 Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed, or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Sections 7(e) and 7(g) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the office or offices of the Rights Agent designated for such purpose, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request, together with payment of the aggregate
Purchase Price with respect to the total number of one ten-thousandth of a share
of Preferred Stock (or shares of Common Stock, other securities, cash or other
assets, as the case may be) as to which the Rights are exercised, at or prior to
the earliest of (i) the Close of Business on April 29, 2009 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the time at which such Rights are exchanged (the
"Exchange Date") as provided in Section 24 hereof or (iv) the time at which the
Rights expire pursuant to Section 13(d) hereof (the earliest of (i), (ii), (iii)
and (iv) being herein referred to as the "Expiration Date").
(b) Each Right shall entitle the registered holder thereof to purchase one
ten-thousandth of a share of Preferred Stock, and the Purchase Price for each
one ten-thousandth of a share of Preferred Stock pursuant to the exercise of a
Right shall initially be $100.00, and shall be subject to adjustment from time
to time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one ten-thousandth of a share of Preferred Stock (or shares of Common
Stock, other securities, cash or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax in cash, or by
certified check, cashier's check or bank draft payable to the order of the
Company, the Rights Agent shall, subject to Section 18(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one ten-thousandths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the
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total number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one ten-thousandths of a share
of Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary to comply with such request, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder and (iv) after receipt thereof, promptly
deliver such cash, if any, to or upon the order of the registered holder of such
Rights Certificate. In the event that the Company is obligated to issue other
securities (including shares of Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which a majority of the
directors of the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability to
any holder of Rights Certificates or 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.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
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such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
(g) Notwithstanding anything in this Agreement to the contrary, in the
event that Rights become exercisable for shares of Common Stock, no right shall
be exercisable by the holder thereof for a number of shares of Common Stock in
excess of the maximum number of shares of Common Stock that could be acquired by
the holder of such Right without violating any provision of Article IV of the
Certificate of Incorporation (or any successor provision or document) relating
to limitations on the ownership of shares of Common Stock. Any shares of Common
Stock purportedly acquired upon exercise of a Right shall, to the extent that
such acquisition violates any provision of Article IV of the Certificate of
Incorporation (or any successor provision or document), be deemed shares of
Excess Stock (as that term is defined in the Certificate of Incorporation or any
successor document), and the Person exercising such Right shall be subject to
all of the remedies and other provisions of such Article IV (or any successor
provision or document) governing shares of Excess Stock. Nothing herein shall be
deemed to limit the application of the Certificate of Incorporation or the
authority of the Board of Directors thereunder.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock (and
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, shares of Common Stock
and/or other securities) that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) In the event the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other
securities) issuable upon the exercise of Rights become listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares
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reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, or
as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act with respect to the shares
of Common Stock or other securities purchasable upon exercise of the Rights on
an appropriate form, (ii) cause such registration statement to become effective
as soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the 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 ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. In addition, if the
Company shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been declared effective.
Upon any suspension of exercisability of Rights referred to in this Section
9(c), the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable and shall be void so long as held by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Rights in such jurisdiction shall not
have been obtained or be obtainable, or the exercise thereof shall not be
permitted under applicable law or a registration statement shall not have been
declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all one ten-thousandths of a share of Preferred
Stock (and, following the occurrence of a Triggering Event, shares of Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
non-assessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any certificates for a number of one ten-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case
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may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of certificates for a number of one ten-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) in
a name other than that of, the registered holder of the Rights Certificate
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of one ten-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other
than that of the registered holder upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date.
Each Person in whose name any certificate for a number of one
ten-thousandths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of such fractional
shares of Preferred Stock (or Common Stock and/or other securities, as the case
may be) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities as the case
may be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.
The Purchase Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a distribution on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of shares
or (D) issue any other shares of its capital stock in a reclassification of
the shares of Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving entity), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such distribution or of the effective date of
such subdivision, combination or reclassification, and the number and kind
of shares of Preferred Stock or of capital stock in the Company issuable on
such date, as the case may be, shall be proportionately adjusted so that
the holder of any Right
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exercised after such time shall be entitled to receive, upon payment of the
aggregate adjusted Purchase Price then in effect necessary to exercise a
Right in full, the aggregate number and kind of shares of Preferred Stock
or of capital stock in the Company, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when
the shares of Preferred Stock (or shares of capital stock, as the case may
be) transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such distribution,
subdivision, combination, or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of this Agreement, in the event
that any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company,
or any Person or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan or any member of the Lebovitz
Group), alone or together with its Affiliates and Associates, shall, at any
time after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring Person
is a transaction set forth in Section 13(a) hereof, proper provision shall
be made so that promptly following the Redemption Period (as defined in
Section 23(a)), each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof and payment of an amount equal to the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of a
number of one ten-thousandths of a share of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of one
ten-thousandths of a share of Preferred Stock for which a Right was or
would have been exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, whether or not such Right was then exercisable,
and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement except to the extent set forth in
Section 13 hereof) by 50% of the current market price per share of Common
Stock (determined pursuant to Section 11(d) hereof) on the date of such
first occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock which is
authorized by the Certificate of Incorporation but not outstanding, or
reserved for issuance for purposes other than upon exercise of the Rights,
is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Board shall, to the
extent permitted by applicable law and by material agreements then in
effect to which the Company is a party, (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess, the "Spread"),
and (B) with respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for some or all of the Adjustment Shares,
upon exercise of a Right and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) shares of Common Stock or
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other equity securities of the Company (including, without limitation,
shares of Preferred Stock or units of shares of Preferred Stock which the
Board has deemed to have the same value as shares of Common Stock) (such
shares or units of Preferred Stock being herein called "common stock
equivalents"), (4) debt securities of the Company, (5) other assets or (6)
any combination of the foregoing, having an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price),
where such aggregate value has been determined by the Board based upon the
advice of an investment banking firm selected by the Board; provided,
however, if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent available) and
then, if necessary, cash, which shares of Common Stock and/or cash have an
aggregate value equal to the Spread.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of shares of Preferred Stock entitling them
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase shares of Preferred Stock (or shares having
the same rights, privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into shares of
Preferred Stock or equivalent preferred stock at a price per share of Preferred
Stock or per share of "equivalent preferred stock" (or having a conversion price
per share of Preferred Stock, if a security convertible into shares of Preferred
Stock or equivalent preferred stock) less than the current per share market
price of the shares of Preferred Stock (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or equivalent preferred stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights and shall be conclusive for all purposes. Shares
of Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
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(c) In case the Company shall fix a record date for a distribution to all
holders of shares of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving entity) of evidences of indebtedness, cash (other than a regular
quarterly cash distribution out of the earnings of the Company), assets (other
than a distribution payable in shares of Preferred Stock, but including any
distribution payable in capital stock other than shares of Preferred Stock), or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current per share market
price of the Preferred Stock (as defined in Section 11(d)) on such record date,
less the fair market value (as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator of which
shall be such current per share market price of the Preferred Stock. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereof), the "current
market price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of Common Stock for the
thirty (30) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price" per share
of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of Common Stock for the ten (10) consecutive
Trading Days immediately following such date; provided, however, that in
the event that the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (i) a dividend or distribution on such shares of Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (ii) any
subdivision, combination or reclassification of such shares of Common
Stock, and the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, shall
not have occurred prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above, then, and
in each such case, the "current market price" shall be appropriately
adjusted to take into account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or
-16-
admitted to trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("Nasdaq") or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker making a market in the shares of Common Stock selected by the Board.
If on any such date no market maker is making a market in the shares of
Common Stock, the fair value of such shares on such date as determined in
good faith by the Board shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open for the
transaction of business, or, if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange, the term
"Trading Day" shall mean a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of New York are not authorized
or obligated by law or executive order to close. If the Common Stock is not
publicly held or not listed or traded, "current market price" shall mean
the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market
price" per share of Preferred Stock shall be conclusively deemed to be an
amount equal to 10,000 (as such number may be appropriately adjusted for
such events as share splits, share distributions and recapitalizations with
respect to the Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of the Common Stock. If
neither the shares of Common Stock nor the shares of Preferred Stock are
publicly held or so listed or traded, "current market price" per share of
Preferred Stock shall mean the fair value per share as determined in good
faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For
all purposes of this Agreement, the "current market price" of one
ten-thousandth of a share of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided by 10,000.
(e) Anything herein to the contrary notwithstanding (other than the last
sentence of this Section 11(e)), no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least one percent (1%) in such price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be. Notwithstanding
the first sentence of this Section 11(e), an
-17-
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock in the Company other than shares
of Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the shares
of Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one ten-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one ten-thousandths of
a share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one ten-thousandths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one ten-thousandths of a share of Preferred Stock issuable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one ten-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional
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Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one ten-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one ten-thousandth of a
share and the number of one ten-thousandths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of one
ten-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue such number of fully paid and non-assessable one ten-thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of one ten-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one ten-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board in its good faith judgment shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) share distributions or (v)
issuance of rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its shares of Preferred Stock
shall not be taxable to such stockholders.
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(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 27 hereof, 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 diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a distribution on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Stock
and the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully protected in
relying on any
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such certificate and on any adjustment therein contained and shall not be deemed
to have knowledge of any adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) Subject to Section 23 of this Agreement, in the event that, following
the Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving entity of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving entity of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell, mortgage or otherwise transfer (or one or more of its Subsidiaries
shall sell, mortgage or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)
hereof), then, and in each such case (except as may be contemplated by Section
13(d) hereof), proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall, upon the expiration of
the Redemption Period (as defined in Section 23(a)), thereafter have the right
to receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly authorized
and issued, fully paid, non-assessable and freely tradable shares of Common
Stock of the Principal Party (as such term is hereinafter defined), not subject
to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one ten-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such one ten-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and (2) dividing that product (which product, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the current
market price per share of Common Stock (determined pursuant to Section 11(d)(i)
hereof) of such Principal Party on the date of consummation of such Section 13
Event (or the fair market value on such date or other securities or property of
the Principal Party, as provided for herein); (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof (other
than Sections 11(a)(ii) and 11(a)(iii)) shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
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sufficient number of shares of Common Stock) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) and Section 11(a)(iii)
hereof shall be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and have not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which are and have been so registered,
"Principal Party" shall refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of Common
Stock which have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any such Section 13 Event, the Principal Party
will:
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act;
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(iii) use its best efforts to obtain any necessary regulatory
approvals in respect of the securities purchasable upon exercise of
outstanding Rights; and
(iv) use its best efforts, if such shares of Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or admit
to trading (or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on the New York Stock Exchange or
such securities exchange, or, if the securities of the Principal Party
purchasable upon exercise of the Rights shall not be listed or admitted to
trading on the New York Stock Exchange or a national securities exchange,
to cause the Rights and the securities purchasable upon exercise of the
Rights to be reported by such other system then in use.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the contrary, upon
consummation of any merger or other acquisition transaction involving the
Company pursuant to a merger or other acquisition agreement between the Company
and any Person (or one or more of such Person's Affiliates or Associates) which
agreement has been approved by the Board prior to any Person becoming an
Acquiring Person, this Agreement and all Rights hereunder shall expire.
(e) In case the Person which is to be party to a transaction referred to in
this Section 13 has any provision in any of its authorized securities or in its
charter or by-laws or other agreement or instrument governing its affairs, which
provision would have the effect of (i) causing such Person to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Person at less
than the then current market price per share thereof (as defined in Section
11(d) hereof), or to issue securities exercisable for, or convertible into,
Common Stock of such Person at less than such then current market price (other
than to holders of Rights pursuant to this Section 13) or (ii) providing for any
special payment, tax or similar provisions in connection with the issuance of
Common Stock of such Person pursuant to the provisions of this Section 13; then,
in such event, the Company hereby agrees with each holder of the Rights that it
shall not consummate any such transaction unless prior thereto the Company and
such Person shall have executed and delivered to the Rights Agent a supplemental
agreement providing that such provision in question shall have been cancelled,
waived or amended or that the authorized securities shall be redeemed so that it
will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights except
prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be
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paid to the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of the whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and low asked prices, regular way, in either case as reported by 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, or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board. If on any such date no such market maker is making
a market in the Rights the fair value of the Rights on such date as determined
in good faith by the Board shall be used. In the event the Rights are listed or
admitted to trading on a national securities exchange, the closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the high bid and low asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to the national securities exchange on which the
Rights are listed or admitted to trading.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one ten-thousandth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one ten-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised, as herein provided, an amount in cash equal to the
same fraction of the current market value of one ten-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one ten-thousandth of a share of Preferred Stock shall be one ten-thousandth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the events specified in Section 11
giving rise to the right to receive shares of Common Stock, common stock
equivalents or other securities upon the exercise of a Right, the Company shall
not be required to issue fractions of shares of Common Stock, common stock
equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock, common stock
equivalents or other securities. In lieu of fractional shares of Common Stock,
common stock equivalents or other securities, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised,
as herein provided, an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock, common stock equivalents or other
securities. For purposes of this Section 14(c), the current market value of one
share of Common Stock shall be the closing price of one share of Common Stock
(as
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determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly waives
the right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action.
All rights of action in respect of this Agreement, except the rights of
action vested in the Rights Agent pursuant to Section 18 and Section 20 hereof,
are vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations hereunder of any Person subject to this Agreement.
Section 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 transferable only in
connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
offices of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate form of
assignment and the certificate contained therein duly completed and executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated certificate for shares of
Common Stock) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated certificate for shares of Common Stock
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be affected by any notice to the
contrary; and
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(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
government authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive distributions or be deemed for any purpose the holder of the number of
one ten-thousandths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. 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 Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking 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
person believed by the Rights Agent to be any one of the Chairman of the Board,
Vice Chairman, President, Chief Financial Officer, any Executive or Senior Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or
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suffered in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent is serving as an administrative agent and shall not be
under any responsibility in respect of the validity of any provision of this
Agreement or the execution and delivery of this Agreement (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 7(e) hereof) or any adjustment required under any of
the provisions hereof 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
Rights Certificates after actual notice of such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be any one of the Chairman of the Board,
Vice Chairman, President, the Chief Financial Officer, any Executive or Senior
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any
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such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instruction in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect, or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect, or misconduct; provided, however, the Rights Agent was not negligent in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
(l) The Rights Agent undertakes only the express duties and obligations
imposed on it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent.
Section 19. Compensation and Indemnification of the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent, its officers, employees, agents and directors for,
and to hold each of them harmless against, any loss, liability, or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for any action taken or omitted by the Rights Agent or such
other indemnified party in connection with the acceptance and administration of
this Agreement and the exercise of its duties hereunder, including the costs and
expenses of defending against any claim of liability in the premises. The
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indemnity provided for hereunder shall survive the expiration of the Rights and
the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement or the exercise of its duties hereunder in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons or otherwise upon the advice of counsel as set
forth in Section 18 hereof.
(c) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage
and regardless of the form of the action unless such loss or damage results from
the gross negligence, bad faith or willful misconduct of the Rights Agent.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights 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 Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights 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 Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at any such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 21. Change of Rights Agent.
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The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then the
Company shall become the Rights Agent until a successor Rights Agent has been
appointed, and any registered holder of any Rights Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of New York (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of New York), in good standing, having a principal
office in the State of New York which is authorized under such laws to exercise
corporate trust power and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, subject to Section 4 hereof, issue
new Rights Certificates evidencing Rights in such form as may be approved by the
Board to reflect any adjustment or change in the Purchase Price and the number
or kind of class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date (other than upon exercise of a Right) and prior
to the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee
-30-
plan or arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Company may (by a resolution of the Board), at its option, at any
time during the period commencing on the Rights Dividend Declaration Date and
ending on the earlier of (i) the Close of Business on the tenth day following
the Stock Acquisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date), as such period may be extended or shortened in the
discretion of the Board of Directors (the "Redemption Period") or (ii) the Final
Expiration Date, cause the Company to redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be appropriately adjusted to reflect any share split, share distribution or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that, if
the Board authorizes redemption of the Rights or a change in the Redemption
Period on or after the time a Person becomes an Acquiring Person, then such
authorization shall require the concurrence of at least two-thirds of the
Directors. If, following the occurrence of a Stock Acquisition Date and
following the expiration of the Company's right of redemption hereunder (i) a
Person who is an Acquiring Person shall have transferred or otherwise disposed
of a number of shares of Common Stock in one transaction or series of
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, (ii) there are no other Persons, immediately
following the occurrence of the event described in clause (i), who are Acquiring
Persons, and (iii) the Board, by a vote of at least two-thirds of the Directors,
shall so approve, then the Company's right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11(a)(ii) Event or a Section
13 Event until such time as the Company's right of redemption hereunder has
expired. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the current market price of the shares of
Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the redemption of the
Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so
-31-
held. Promptly after the action of the Board ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Company may (by a resolution of the Board), at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) or Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any share split, share
distribution or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii) or
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For
the purposes of this paragraph (d), the current market value of a whole share of
Common Stock shall
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be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in shares of capital stock of any class to
the holders of shares of Preferred Stock or to make any other distribution to
the holders of shares of Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company) or (ii) to offer
to the holders of shares of Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or shares of capital
stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its shares of Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock) or (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 transaction or a
series of related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate and to the Rights Agent, to the extent feasible
and in accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of shares
of Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of shares of
Preferred Stock for purposes of such action and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of shares of
Preferred Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to shares
of Preferred Stock shall be deemed thereafter to refer to shares of Common Stock
and/or, if appropriate, other securities.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
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CBL & Associates Properties, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o EquiServe Limited Partnership
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to any such holder at the address
of such holder as shown on the registry books of the Company.
-34-
Section 27. Supplements and Amendments.
Prior to the Distribution Date and subject to the penultimate sentence of
this Section 27, the Company may (by resolution of the Board), and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company may (by resolution of the
Board), and the Rights Agent shall at any time and from time to time, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of any such Person);
provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of any such Person). Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
number of one ten-thousandths of a share of Preferred Stock for which a Right is
exercisable or the Purchase Price, provided, however, that at any time prior to
the Distribution Date, the Company may amend this Agreement to increase the
Purchase Price. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board, etc.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i)
-35-
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject any director to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
shares of Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of shares of Common
Stock).
Section 31. Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would materially
and adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board.
Section 32. Governing Law.
This Agreement, each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with laws
of such State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts. It shall not
be necessary that the signature of or on behalf of each party appears on each
counterpart, but it shall be sufficient that the signature of or on behalf of
each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.
-36-
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
Section 35. OP Unit Conversion.
At any time, prior to the Expiration Date, from and after the earlier of
the Stock Acquisition Date or after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or of any Subsidiary of the Company or any
Person or entity holding shares of Common Stock for or pursuant to the terms of
any such plan or any member of the Lebovitz Group) is first published or sent or
given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such Person would become
an Acquiring Person, and before the Distribution Date, the Company covenants
that it shall elect, in accordance with the Second Amended and Restated
Agreement of Limited Partnership of the Operating Partnership, dated as of June
30, 1998, as it may be amended from time to time, to issues shares of Common
Stock, along with the associated Rights, to any Person who elects, in accordance
with the terms of such Partnership Agreement, to exchange common units of
limited partnership interest in the Operating Partnership (or in any other
limited partnership in which the Company or an Affiliate of the Company acts as
general partner).
-37-
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CBL & ASSOCIATES PROPERTIES,
INC.
Attest:
By: /s/ ▇▇▇▇ ▇. ▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------- ------------------------------
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice Chairman, Chief Chairman of the Board and
Financial Officer Chief Executive Officer
BANKBOSTON, N.A.
Attest:
By: /s/ ▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------- ------------------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
-38-
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions.................................................1
Section 2. Appointment of Rights Agent.........................................5
Section 3. Issue of Rights Certificates........................................5
Section 4. Form of Rights Certificates.........................................7
Section 5. Countersignature and Registration...................................7
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.............................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......9
Section 8. Cancellation and Destruction of Rights Certificates................11
Section 9. Reservation and Availability of Shares.............................11
Section 10. Preferred Stock Record Date.......................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights............................................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares........20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..................................................21
Section 14. Fractional Rights and Fractional Shares...........................23
Section 15. Rights of Action..................................................25
Section 16. Agreement of Rights Holders.......................................25
Section 17. Rights Certificate Holder Not Deemed a Stockholder................26
Section 18. Duties of Rights Agent............................................26
Section 19. Compensation and Indemnification of the Rights Agent..............28
Section 20. Merger or Consolidation or Change of Name of Rights Agent.........29
Section 21. Change of Rights Agent............................................30
Section 22. Issuance of New Rights Certificates...............................30
Section 23. Redemption........................................................31
Section 24. Exchange..........................................................32
Section 25. Notice of Certain Events..........................................33
Section 26. Notices...........................................................33
Section 27. Supplements and Amendments........................................35
Section 28. Successors........................................................35
Section 29. Determinations and Actions by the Board, etc......................35
Section 30. Benefits of this Agreement........................................36
Section 31. Severability......................................................36
Section 32. Governing Law.....................................................36
Section 33. Counterparts......................................................36
Section 34. Descriptive Headings..............................................37
Section 35. OP Unit Conversion................................................37
RIGHTS AGREEMENT
CBL & ASSOCIATES PROPERTIES, INC.
and
BANKBOSTON, N.A.
as Rights Agent
Dated as of April 30, 1999
Exhibit A
---------
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES 1999 JUNIOR PARTICIPATING PREFERRED STOCK
OF
CBL & ASSOCIATES PROPERTIES, INC.
Pursuant to Section 151 of the
Delaware General Corporation Law
We, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman of the Board and Chief Executive Officer,
and ▇▇▇▇ ▇. ▇▇▇, Vice Chairman, Chief Financial Officer and Secretary, of CBL &
Associates Properties, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Amended and Restated Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), of the said Corporation, the said Board of Directors on
April 30, 1999, adopted the following resolution creating a series of 6,000
shares of Preferred Stock designated as Series 1999 Junior Participating
Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Certificate of
Incorporation, a series of Preferred Stock of the Corporation be, and it hereby
is, created, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations and restrictions
thereof are as follows:
Section 1. Designation and Amount. The shares of such series of Preferred
Stock, par value $.01 per share, shall be designated as "Series 1999 Junior
Participating Preferred Stock" (the "Series 1999 Junior Participating Preferred
Stock"), and the number of shares constituting such series shall be 6,000. Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series 1999 Junior Participating Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into shares of Series 1999 Junior Participating Preferred Stock.
A-1
Section 2. Distributions.
(A) Subject to the prior and superior rights of the holders of any shares
of any series of Preferred Stock ranking prior and superior to the shares of
Series 1999 Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series 1999 Junior Participating Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly distributions payable in cash
on the 15th day of April, August, October and January in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after first issuance of
a share or fraction of a share of Series 1999 Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $100.00 or (b) subject to the provision for adjustment hereinafter set
forth, 10,000 times the aggregate per share amount of all cash dividends, and
10,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Common Stock, par value $.01 per share, of the Corporation ("Common Stock"), or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series 1999 Junior Participating Preferred Stock. In the event the
Corporation shall at any time after April 30, 1999 (the "Rights Dividend
Declaration Date") (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the amount to which holders of shares of Series 1999 Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend on the Series 1999 Junior
Participating Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a distribution of $100.00 per share on the
Series 1999 Junior Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series 1999 Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series 1999
Junior Participating Preferred Stock, unless the date of issue of such shares is
prior to the record date set for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series 1999 Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly
A-2
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the Series 1999
Junior Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series 1999 Junior Participating Preferred Stock
entitled to receive payment of a dividend declared thereon, which record date
shall be no more than thirty (30) days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series 1999 Junior
Participating Preferred tock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series 1999 Junior Participating Preferred Stock shall entitle the
holder thereof to 10,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Dividend Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per share to which
holders of shares of Series 1999 Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as set forth herein or as otherwise provided by law, the holders
of shares of Series 1999 Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise provided by law, holders of
Series 1999 Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series 1999 Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all such accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series 1999
Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of
capital stock
A-3
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to Series 1999 Junior Participating Preferred Stock; or
(ii) declare or pay dividends on, or make any other distributions on,
any shares of capital stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series 1999 Junior
Participating Preferred Stock, except dividends paid ratably on the Series
1999 Junior Participating Preferred Stock and all such parity stock on
which dividends are payable in proportion to the total amounts to which the
holders of all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for consideration shares
of capital stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series 1999 Junior
Participating Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series 1999 Junior Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series 1999 Junior Participating Preferred Stock, or any shares
of capital stock ranking on a parity with the Series 1999 Junior
Participating Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of capital stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner.
Section 5. Reacquired Shares. Any shares of Series 1999 Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of shares of
capital stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series 1999 Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series 1999 Junior
Participating Preferred Stock shall have received $1,000,000 per share, plus any
unpaid
A-4
dividends and distributions payable thereon, whether or not declared, to the
date of such payment (the "Series 1999 Liquidation Preference"). Following the
payment of the full amount of the Series 1999 Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series 1999
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series 1999
Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock
distributions and recapitalizations with respect to the Common Stock) (such
number in clause (ii) immediately above being referred to as the "Adjustment
Number"). Following the payment of the full amount of the Series 1999
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series 1999 Junior Participating Preferred Stock and Common Stock,
respectively, holders of shares of Series 1999 Junior Participating Preferred
Stock and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to one (1) with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series 1999 Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series 1999 Junior Participating Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
stock in proportion to their respective liquidation preferences. In the event,
however, that there are sufficient assets available to permit payment in full of
the Common Adjustment, then such remaining assets shall be distributed ratably
to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Dividend Declaration Date (i) declare any distribution on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series 1999 Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 10,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Dividend Declaration Date (i) declare any distribution on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, then in
A-5
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series 1999 Junior Participating Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series 1999 Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. Notwithstanding anything contained herein to the
contrary, the Series 1999 Junior Participating Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets in liquidation, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Corporation's Certificate of Incorporation shall
not be further amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series 1999 Junior Participating
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least a majority of the outstanding shares of Series 1999
Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series 1999 Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends and other distributions, participate in dividends and other
distributions, and to have the benefit of all other rights of holders of Series
1999 Junior Participating Preferred Stock.
Section 12. Restrictions on Ownership and Transfer. The beneficial
ownership and transfer of the Series 1999 Junior Participating Preferred Stock
shall in all respects be subject to the applicable provisions of Article IV of
the Certificate of Incorporation.
A-6
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 30th day of
April 1999.
CBL & ASSOCIATES PROPERTIES, INC.
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
------------------------------
▇▇▇▇ ▇. ▇▇▇
Vice Chairman, Chief Financial
Officer and Secretary
A-7
Exhibit B
---------
Summary Of Rights
To Purchase Shares Of
Series 1999 Junior Participating Preferred Stock
On April 30, 1999, the Board of Directors of CBL & Associates Properties,
Inc. (the "Company") declared a distribution of one right ("Right") for each
outstanding share of Common Stock, par value $.01 per share ("Common Stock"), of
the Company. The distribution is payable to stockholders of record at the close
of business on May 14, 1999. Each Right, when exercisable, entitles the
registered holder to purchase from the Company one ten-thousandth of a share of
Series 1999 Junior Participating Preferred Stock, par value $.01 per share
("Preferred Stock"), at a price of $100.00 per one ten-thousandth of a shares of
Preferred Stock (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and BankBoston, N.A., as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate certificates evidencing
the Rights will be distributed. The Rights will separate from the shares of
Common Stock and a distribution of Rights Certificates (as defined below) will
occur upon the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (other than ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and his family and employee benefit plans established by the
Company) (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date") or (ii) 10 business days (or such later date as
the Company's Board of Directors may determine) following the commencement of a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person of 15% or more of the outstanding shares of
Common Stock (the earlier of such dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
certificates representing shares of Common Stock, and will be transferred with
and only with the certificates representing shares of Common Stock, (ii) new
certificates for shares of Common Stock issued after May 14, 1999 upon transfer
or new issuance of the shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for shares of Common Stock outstanding will also
constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on April 29, 2009, unless earlier redeemed or exchanged
by the Company as described below. The Rights will not be exercisable by a
holder in any jurisdiction where the requisite qualification to the issuance to
such holder, or the exercise by such holder, of the Rights has not been obtained
or is not obtainable.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the shares of
B-1
Common Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will evidence the Rights.
Except as otherwise determined by the Board of Directors, only shares of Common
Stock issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or more of
the then outstanding shares of Common Stock, each holder of a Right will, after
the end of a redemption period referred to below, have the right to exercise the
Right by purchasing, for an amount equal to the Purchase Price, shares of Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price. For example, at a
Purchase Price of $100 per Right, each Right not owned by an Acquiring Person
(or by certain related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $200 worth of shares of Common
Stock (or other consideration, as noted above) for $100. Assuming that the
shares of Common Stock had a per share value of $25 at such time, the holder of
each valid Right would be entitled to purchase eight shares of Common Stock for
$100. Notwithstanding any of the foregoing, following the occurrence of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving entity (other than a merger which follows
an offer described in the preceding paragraph), or (ii) 50% or more of the
assets or earning power of the Company and its subsidiaries, including CBL &
Associates Limited Partnership, is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth above) shall,
after the expiration of the redemption period referred to below, have the right
to receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right (e.g., common stock of the
acquiring company having a value of $200 for the $100 Purchase Price).
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, the Board of Directors of the Company may exchange
the Rights for shares of Common Stock (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock per Right (subject to adjustment).
The Purchase Price payable, and the number of one ten-thousandths of a
share of Preferred Stock or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the Preferred
Stock or (iii) upon the dividend or distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding
B-2
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued (other than fractions
which are integral multiples of one ten-thousandth of a share of Preferred
Stock) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the date
of exercise.
In general, the Board of Directors of the Company may cause the Company to
redeem the Rights in whole, but not in part, at any time during the period
commencing on May 14, 1999, and ending on the tenth day following the Stock
Acquisition Date, as such period may be extended or shortened by the Board of
Directors (the "Redemption Period") at a price of $.01 per Right (payable in
cash, shares of Common Stock or other consideration deemed appropriate by the
Board of Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem the Rights will require the concurrence of at
least two-thirds of the Directors. After the Redemption Period has expired, the
Company's right of redemption may be reinstated (with the concurrence of at
least two-thirds of the Directors) if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company and there are no
other Acquiring Persons. Immediately upon the action of the Board of Directors
of the Company ordering redemption of the Rights, with, where required, the
concurrence of two-thirds of the Directors, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 redemption
price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be subject to federal taxation to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for shares of Common Stock (or other
consideration) of the Company or for common stock of the acquiring company as
set forth above.
Other than those provisions relating to the principal economic terms of the
Rights (other than an increase in the Purchase Price), any of the provisions of
the Rights Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board in order to cure any ambiguity,
defect or inconsistency or to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights Agreement;
provided however, no amendment to adjust the time period governing redemption
may be made at such time as the Rights are not redeemable.
* * *
B-3
Exhibit C
---------
[Form of Rights Certificate]
Certificate No. R-__________ __________ Rights
NOT EXERCISABLE AFTER THE CLOSE OF BUSINESS ON APRIL 29, 2009 OR EARLIER IF
REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]1 THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL
BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE
QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF
THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.
Rights Certificate
This certifies that ____________, or its 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 April 30, 1999 (the "Rights Agreement"), between CBL &
Associates Properties, Inc., a Delaware corporation (the "Company"), and
BankBoston, N.A., a national banking association (the "Rights Agent"), to
purchase from the Company at any time prior to the close of business on April
29, 2009 at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one ten-thousandth of a fully paid,
non-assessable share of the Series 1999 Junior Participating Preferred Stock,
par value $.01 per share ("Preferred Stock") of the Company, at a purchase price
of $100.00 per one ten-thousandth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of May 14,
--------
1 The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
1999, based on the Preferred Stock as constituted at such date, and are subject
to adjustment upon the happening of certain events as provided in the Rights
Agreement. The Company reserves the right to require prior to the occurrence of
a Triggering Event (as such term is defined in the Rights Agreement) that a
number of Rights be exercised so that only whole shares of Preferred Stock will
be issued.
From and after the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), the Rights evidenced by this Rights
Certificate beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
The Rights evidenced by this Rights Certificate shall not be exercisable,
and shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be
obtainable.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities, which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one ten-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
-2-
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 at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition Date (as such time
period may be changed in the discretion of the Board of Directors pursuant to
the Rights Agreement), and (ii) the Final Expiration Date (as defined in the
Rights Agreement). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of at least
two-thirds of the Directors. After the expiration of the redemption period, the
Company's right of redemption may be reinstated if an Acquiring Person reduces
his beneficial ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company, and
such reinstatement is approved by at least two-thirds of the Directors.
At any time after a person becomes an Acquiring Person, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such Acquiring Person which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one ten-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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 Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
-3-
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ______________ 19 __.
CBL & ASSOCIATES PROPERTIES, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Countersigned:
BANKBOSTON, N.A.
By:
------------------------------
Authorized Signature
-4-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________, ____
______________________________
[Signature]
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred 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, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: _________, ____
______________________________
[Signature]
Signature Guaranteed:
Notice
------
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires
to exercise Rights represented by the Rights Certificate.)
To CBL & Associates Properties, Inc.:
The undersigned hereby irrevocably elects to exercise Rights represented by
this Rights Certificate to purchase the shares of Preferred Stock issuable upon
the exercise of the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the Rights) and requests
that certificates for such shares be issued in the name of and delivered to:
________________________________________________________________________________
(Please print name and address
________________________________________________________________________________
Please insert social security or
other identifying number: __________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address
________________________________________________________________________________
Please insert social security or
other identifying number:
Dated: _________, ____
______________________________
[Signature]
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights 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 in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: _________, ____
______________________________
[Signature]
Signature Guaranteed:
Notice
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The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.