Exhibit 4.1
RIGHTS AGREEMENT
dated as of August 14, 2001
by and between
TOO, INC.
and
EQUISERVE TRUST COMPANY, N.A.
as Rights Agent
TABLE OF CONTENTS
Page
Section 1. Certain Definitions....................................................... 2
Section 2. Appointment of Rights Agent............................................... 7
Section 3. Issuance of Right Certificates............................................ 7
Section 4. Form of Right Certificates................................................ 9
Section 5. Countersignature and Registration......................................... 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates................... 10
Section 7. Exercise of Rights........................................................ 10
Section 8. Cancellation and Destruction of Right Certificates........................ 12
Section 9. Reservation and Availability of Capital Stock............................. 13
Section 10. Securities Record Date.................................................... 13
Section 11. Adjustment of Exercise Price, Number of Shares Issuable
Upon Exercise of Rights or Number of Rights............................... 14
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
Issuable Upon Exercise of Rights.......................................... 19
Section 13. Consolidation, Merger, or Sale or Transfer of
Assets or Earning Power................................................... 19
Section 14. Fractional Rights and Fractional Shares................................... 21
Section 15. Rights of Action.......................................................... 22
Section 16. Agreement of Right Holders................................................ 23
Section 17. Right Holder and Right Certificate Holder
Not Deemed a Stockholder.................................................. 23
Section 18. Concerning the Rights Agent............................................... 23
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Section 19. Merger or Consolidation or Change of Name of Rights Agent............ 24
Section 20. Duties of Rights Agent............................................... 25
Section 21. Change of Rights Agent............................................... 26
Section 22. Issuance of New Right Certificates................................... 27
Section 23. Redemption of Rights................................................. 27
Section 24. Exchange of Rights................................................... 28
Section 25. Notice of Certain Events............................................. 29
Section 26. Notices.............................................................. 30
Section 27. Supplements and Amendments........................................... 30
Section 28 Certain Covenants.................................................... 31
Section 29. Successors........................................................... 31
Section 30. Benefits of this Agreement........................................... 31
Section 31. Severability......................................................... 32
Section 32. Governing Law........................................................ 32
Section 33. Counterparts......................................................... 32
Section 34. Descriptive Headings................................................. 32
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TABLE OF EXHIBITS
Exhibit A Form of Certificate of Designations
Exhibit B Form of Right Certificate
Exhibit C Form of Summary of the Rights
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RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is made and entered into as of August
14, 2001, by and between Too, Inc., a Delaware corporation (the "Company"), and
EquiServe Trust Company, N.A. (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred stock purchase right (a "Right")
for each Common Share (as hereinafter defined) of the Company, which
dividend is payable on August 28, 2001 (the "Record Date"), to the
holders of record of Common Shares as of the Close of Business (as
hereinafter defined) on such date;
WHEREAS, the Board of Directors of the Company has further authorized
and directed the issuance of one (subject to adjustment of such number
as provided in this Agreement) Right for (A) each Common Share that
shall be issued by the Company at any time after the Record Date and
prior to the earliest of the date of the first Section 11(a)(ii)
Event, the date of the first Section 13(a) Event, the Redemption Date
or the Expiration Date (as such terms are hereinafter defined), and
(B) each Common Share that shall be issued by the Company at any time
on or after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date pursuant to the
exercise of conversion rights, exchange rights, rights (other than
Rights), warrants or options that shall have been issued or granted
prior to the earlier of the date of the first Section 11(a)(ii) Event
or the date of the first Section 13(a) Event, unless the Board of
Directors shall provide otherwise at the time of the issuance or grant
of such conversion rights, exchange rights, rights (other than
Rights), warrants or options; and
WHEREAS, in connection with the matters referred to herein, the
Company desires to appoint the Rights Agent to act on behalf of the
Company for the benefit of the holders of Rights, and the Rights Agent
is willing so to act.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements set forth herein, and for the benefit of the holders
of Rights, the parties hereto hereby agree as follows:
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Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in
effect on the date hereof.
(b) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "Beneficially Own":
(i) any securities that such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Rule 13d-3 promulgated
under the Exchange Act, in each case as in effect on the date hereof;
(ii) any securities that such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether such right is
exercisable immediately, or only after the passage of time, compliance with
regulatory requirements, the fulfillment of a condition, or otherwise)
pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise, provided that a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own, securities
tendered pursuant to a tender offer 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;
(iii) any securities that such Person or any of such Person's
Affiliates or Associates has the right to vote, alone or in concert with
others, pursuant to any agreement, arrangement or understanding, provided
that a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (A) arises solely from a revocable
proxy given to such Person or any of such Person's Affiliates or Associates
in response to a public proxy solicitation made pursuant to and in
accordance with the applicable rules and regulations of the Exchange Act,
and (B) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report);
(iv) any securities that are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (other than
voting pursuant to a revocable proxy as described in the proviso to Section
1(b)(iii) hereof) or disposing of any securities of the Company; and
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(v) on any day on or after the Distribution Date, all Rights that
prior to such date were represented by certificates for Common Shares that
such Person Beneficially Owns on such day.
Notwithstanding anything to the contrary in this Section 1(b), a Person engaged
in business as an underwriter of securities shall not be deemed 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 40 days after the date of such acquisition.
(c) "Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions in the State of Ohio are authorized or
obligated by law or executive order to close.
(d) "Close of Business" on any given date shall mean 5:00 o'clock p.m.,
Columbus, Ohio time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 o'clock p.m., Columbus, Ohio time, on the next
succeeding Business Day.
(e) "Closing Price" of a stock or other security on any day shall be the
last sale price, regular way, per share of such stock or unit of such other
security on such day 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 such stock or other security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such stock or other security is listed or admitted
to trading or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, the last quoted sale 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 such stock or other security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker that makes a market in such stock or other security
and that is selected by the Board of Directors of the Company.
(f) "Common Share" shall mean one share of the Common Stock, par value
$.01 per share, of the Company, unless used with reference to a Person other
than the Company, in which case it shall mean one share of the class of capital
stock (or equity interest) of such other Person having the greatest voting power
per share or, if such Person is a Subsidiary of another Person, of the Person
that ultimately controls such Person.
(g) "Common Share Equivalent" shall have the meaning ascribed to it in
Section 11(a)(iii) hereof.
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(h) "Current Market Price" per share of a stock or unit of any other
security on any date shall mean the average of the daily Closing Prices of such
stock or other security for the 30 consecutive Trading Days through and
including the Trading Day immediately preceding the date in question; provided,
however, that if any event shall have caused the Closing Price on any Trading
Day during such 30-day period not to be fully comparable with the Closing Price
on the date in question (or, if no Closing Price is available on the date in
question, on the Trading Day immediately preceding the date in question), then
each such noncomparable Closing Price so used shall be appropriately adjusted by
the Board of Directors of the Company in order to make the Closing Price on each
Trading Day during the period used for the determination of the Current Market
Price fully comparable with the Closing Price on such date in question (or, if
applicable, the immediately preceding Trading Day). "Current Market Price" per
share of any stock or unit of such other security that is not publicly held or
so listed or traded, and "Current Market Price" of any other property, shall
mean the fair value per share of such stock or unit of such other security, or
the fair value of such other property, respectively, as determined in good faith
by the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors shall in good
faith determine appropriate, which determination shall be described in a
statement filed by the Company with the Rights Agent.
(i) "Distribution Date" shall have the meaning ascribed to it in Section
3 hereof.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "Exchange Ratio" shall have the meaning ascribed to it in Section
24(a) hereof.
(l) "Exempt Person" shall mean the Company, any wholly-owned Subsidiary
of the Company, any employee benefit plan of the Company or of a Subsidiary of
the Company, and any Person holding Voting Shares for or pursuant to the terms
of any such employee benefit plan.
(m) "Exercise Price" shall have the meaning ascribed to it in Section
7(c) hereof.
(n) "Expiration Date" shall mean August 14, 2011, unless the
Distribution Date shall occur on or prior to such date and the Rights shall have
separated from the Common Shares pursuant to the terms of this Agreement, in
which case "Expiration Date" shall mean the date which is the tenth anniversary
of the Distribution Date.
(o) "Person" shall mean any individual, firm, partnership, corporation,
association, group (as such term is used in Rule 13d-5 promulgated under the
Exchange Act as in effect on the date hereof) or other entity, and shall include
any successor (by merger or otherwise) of such entity.
(p) "Preferred Share" shall mean one share of the Series A Junior
Participating Cumulative Preferred Stock, par value $0.01 per share, of the
Company, which shall have the
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rights and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit A.
(q) "Preferred Share Equivalents" shall have the meaning ascribed to it
in Section 11(b) hereof.
(r) "Record Date" shall have the meaning ascribed to it in the recitals
hereto.
(s) "Redemption Date" shall mean the date of the action of the Board of
Directors of the Company authorizing and directing the redemption of the Rights
pursuant to Section 23(a) hereof or the exchange of the Rights pursuant to
Section 24(a) hereof.
(t) "Redemption Price" shall have the meaning ascribed to it in Section
23(a) hereof.
(u) "Right" shall have the meaning ascribed to it in the recitals
hereto.
(v) "Rights Agent" shall have the meaning ascribed to it in the recitals
hereto.
(w) "Section 11(a)(ii) Event" shall have the meaning ascribed to it in
Section 11(a)(ii) hereof.
(x) "Section 13(a) Event" shall have the meaning ascribed to it in
Section 13(a) hereof.
(y) "Securities Act" shall mean the Securities Act of 1933, as amended.
(z) "Subsidiary" of any Person shall mean any corporation or other
Person of which equity securities or equity interests representing a majority of
the voting power are owned, directly or indirectly, or which is effectively
controlled, by such Person.
(aa) "Surviving Person" shall have the meaning ascribed to it in Section
13(a) hereof.
(bb) "Trading Day" shall mean, as to any stock or other security, a day
on which the principal national securities exchange on which such stock or other
security is listed or admitted to trading is open for the transaction of
business or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(cc) "Unavailable Adjustment Shares" has the meaning ascribed to it in
Section 11(a)(iii) hereof.
(dd) "Voting Share" shall mean (i) a Common Share of the Company and (ii)
any other share of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Shares in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up.
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References in this Agreement to a percentage or portion of the outstanding
Voting Shares shall be deemed a reference to the percentage or portion of the
total votes entitled to be cast by the holders of the outstanding Voting Shares.
(ee) "15% Ownership Date" shall mean the first date after the declaration
by the Board of Directors referred to in the first recital hereto 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 a 15% Stockholder containing the facts by virtue of which a Person
has become a 15% Stockholder.
(ff) "15% Stockholder" shall mean any Person that, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of such
number of Voting Shares of the Company as constitutes a percentage of the then
outstanding Voting Shares that is equal to or greater than 15%; provided,
however, that the term "15% Stockholder" shall not include: (i) an Exempt
Person; (ii) any Person that, together with all Affiliates and Associates of
such Person, became the Beneficial Owner of 15% or more of the Voting Shares of
the Company on or prior to August 14, 2001 ("Existing Owner"), unless and until
such Existing Owner, after August 14, 2001, becomes the Beneficial Owner of
additional Voting Shares representing 1% or more of the Voting Shares or, after
first becoming the Beneficial Owner of less than 15% of the Voting Shares, again
becomes the owner of 15% or more of the Voting Shares; or (iii) any Person if
such Person would not otherwise be a 15% Stockholder but for a reduction in the
number of outstanding Voting Shares resulting from a stock repurchase program or
other similar plan of the Company or from a self-tender offer of the Company,
which plan or tender offer commenced on or after the date hereof, provided,
however, that the term "15% Stockholder" shall include such Person from and
after the first date upon which (A) such Person, since the date of the
commencement of such plan or tender offer, shall have acquired Beneficial
Ownership of, in the aggregate, a number of Voting Shares of the Company equal
to 1% or more of the Voting Shares of the Company then outstanding and (B) such
Person, together with all Affiliates and Associates of such Person, shall
Beneficially Own 15% or more of the Voting Shares of the Company then
outstanding. In calculating the percentage of the outstanding Voting Shares
that are Beneficially Owned by a Person for purposes of this subsection (ff),
Voting Shares that are Beneficially Owned by such Person shall be deemed
outstanding, and Voting Shares that are not Beneficially Owned by such Person
and that are subject to issuance upon the exercise or conversion of outstanding
conversion rights, exchange rights, rights (other than Rights), warrants or
options shall not be deemed outstanding. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person that
would otherwise be a 15% Stockholder pursuant to the foregoing provisions of
this Section 1(ff) and Section 1(b) hereof has become such inadvertently, and
such Person (a) promptly notifies the Board of Directors of such status and (b)
as promptly as practicable thereafter, either divests of a sufficient number of
Voting Shares so that such Person would no longer be a 15% Stockholder, or
causes any other circumstance, such as the existence of an agreement respecting
Voting Shares, to be eliminated such that such Person would no longer be a 15%
Stockholder as defined pursuant to this Section 1(ff) and 1(b), then such Person
shall not be deemed to be a 15% stockholder for any purposes of this Agreement.
Any determination made by the Board of Directors of the Company as to
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whether any Person is or is not a 15% Stockholder shall be conclusive and
binding upon all holders of Rights.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable, upon ten days' prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) "Distribution Date" shall mean the date, after the date hereof, that
is the earliest of (i) the tenth Business Day (or such later day as shall be
designated by the Board of Directors of the Company) following the date of the
commencement of, or the first public announcement of the intent of any Person,
other than an Exempt Person, to commence, a tender offer or exchange offer, the
consummation of which would cause any Person to become a 15% Stockholder, (ii)
the date of the first Section 11(a)(ii) Event or (iii) the date of the first
Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be represented by
certificates for Common Shares (all of which certificates for Common Shares
shall be deemed to be Right Certificates) and not by separate Right
Certificates, (ii) the record holder of the Common Shares represented by each of
such certificates shall be the record holder of the Rights represented thereby
and (iii) the Rights shall be transferable only in connection with the transfer
of Common Shares. Until the earliest of the Distribution Date, the Redemption
Date or the Expiration Date, the surrender for transfer of such certificates for
Common Shares shall also constitute the surrender for transfer of the Rights
represented thereby.
(c) As soon as practicable after the Distribution Date, and after
notification by the Company, the Rights Agent shall send, at the Company's
expense, by first-class, postage-prepaid mail to each record holder of Common
Shares, as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate
substantially in the form of Exhibit B hereto representing one Right for each
Common Share so held. From and after the Distribution Date, the Rights shall be
represented solely by such Right Certificates and may only be transferred by the
transfer of such Right Certificates, and the holders of such Right Certificates,
as listed in the records of the Company or any transfer agent or registrar for
such Rights, shall be the record holders of such Rights.
(d) As soon as practicable after the Record Date, the Company shall send
a copy of a Summary of the Rights in substantially the form attached hereto as
Exhibit C by first-class, postage-prepaid mail to each record holder of Common
Shares as of the Close of Business on the Record Date at the address of such
holder shown on the records of the Company.
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(e) Certificates for Common Shares issued at any time after the Record
Date and prior to the earliest of the Distribution Date, the Redemption Date or
the Expiration Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also represents Rights that entitle the holder hereof to
certain rights as set forth in a Rights Agreement dated as of August 14,
2001 by and between the Corporation and EquiServe Trust Company, N.A., as
Rights Agent (the "Rights Agreement"), the terms and conditions of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Corporation.
Under certain circumstances specified in the Rights Agreement, such Rights
will be represented by separate certificates and will no longer be
represented by this certificate. Under certain circumstances specified in
the Rights Agreement, Rights beneficially owned by certain persons may
become null and void. The Corporation will mail to the record holder of
this certificate a copy of the Rights Agreement without charge promptly
following receipt of a written request therefor.
(f) Certificates for Common Shares issued at any time on or after the
Distribution Date and prior to the earlier of the Redemption Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate does not represent any Right issued pursuant to the terms
of a Rights Agreement dated as of August 14, 2001 by and between the
Corporation and EquiServe Trust Company, N.A., as Rights Agent.
(g) In the event that at any time on or after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Expiration Date, the
Company shall issue any Common Shares pursuant to the exercise of conversion
rights, exchange rights, rights (other than Rights), warrants or options that
shall have been issued or granted prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event, then,
unless the Board of Directors of the Company shall have provided otherwise at
the time of the issuance or grant of such conversion rights, exchange rights,
rights (other than Rights), warrants or options, the Rights Agent shall, as soon
as practicable after the date of such event, send by first-class, postage-
prepaid mail to the record holder of such Common Shares, at the address of such
holder as shown on the records of the Company, a Right Certificate substantially
in the form of Exhibit B hereto representing one Right for each Common Share so
issued.
(h) Notwithstanding the foregoing provisions of this Section 3, the
Rights Agent shall not send any Right Certificate to any 15% Stockholder or any
of its Affiliates or Associates or to any Person if the Rights held by such
Person are Beneficially Owned by a 15% Stockholder or
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any of its Affiliates or Associates. Any determination made by the Board of
Directors of the Company as to whether any Common Shares are or were
Beneficially Owned at any time by a 15% Stockholder or an Affiliate or Associate
of a 15% Stockholder shall be conclusive and binding upon all holders of Rights.
Section 4. Form of Right Certificates.
The Right Certificates and the form of assignment, including certificate,
and the form of election to purchase, including certificate, printed on the
reverse thereof, when, as and if issued, shall be substantially the same as
Exhibit B hereto, and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange upon which the Rights or the securities of the Company issuable upon
exercise of the Rights may from time to time be listed, or to conform to usage.
Subject to Section 22 hereof, Right Certificates, whenever issued, that are
issued in respect of Common Shares that were issued and outstanding as of the
Close of Business on the Distribution Date, shall be dated as of the
Distribution Date.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its President or any
Vice President, either manually or by facsimile signature, and may have affixed
thereto the Company's seal or a facsimile thereof attested by its Secretary or
any Assistant Secretary, either manually or by facsimile signature. The Right
Certificates shall be countersigned by an authorized signatory of the Rights
Agent (which need not be the same authorized signatory for all of the Right
Certificates) 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 Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by an authorized
signatory of the Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such Right Certificates
had not ceased to be such officer of the Company. Any Right Certificate may be
signed on behalf of the Company by any person who at the actual date of such
execution shall be a proper officer of the Company to sign such Right
Certificate, even though such person was not such an officer at the date of the
execution of this Agreement.
(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept at its offices in Jersey City, New Jersey, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of Right
Certificates, the number of Rights represented on its face by each Right
Certificate and the date of each Right Certificate.
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Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and so long as
the Rights represented thereby remain outstanding, any one or more Right
Certificates may be transferred, split up, combined or exchanged for one or more
Right Certificates representing the same aggregate number of Rights as the Right
Certificates surrendered. Any registered holder desiring to transfer, split up,
combine or exchange one or more Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent with the form of assignment, including certificate, on the
reverse side thereof completed and duly executed, with signature guaranteed and
such other and further documentation as the Rights Agent may reasonably request.
Thereupon, the Rights Agent shall countersign and deliver to the person entitled
thereto one or more Right Certificates, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security 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
such Right Certificate, if mutilated, along with signature guarantees and such
other and further documentation as the Rights Agent may reasonably request, the
Company shall issue and deliver to the Rights Agent for delivery to the record
holder of such Right Certificate a new Right Certificate of like tenor in lieu
of such lost, stolen, destroyed or mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in this Section 6, the
Rights Agent shall not countersign and deliver a Right Certificate to any Person
if such Right Certificate represents, or would represent when held by such
Person, Rights that had become or would become null and void pursuant to Section
7(d) hereof.
Section 7. Exercise of Rights.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other provisions of
this Agreement, at any time after the Close of Business on the Distribution Date
and prior to the Close of Business on the earlier of the Redemption Date or the
Expiration Date, the registered holder of any Right Certificate may exercise the
Rights represented thereby in whole or in part upon surrender of such Right
Certificate, with the form of election to purchase, including certificate, on
the reverse side thereof completed and duly executed, with signature guaranteed,
to the Rights Agent at the office or agency of the Rights Agent in Jersey City,
New Jersey, along with a
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signature guarantee and such other and further documentation as the Rights Agent
may reasonably request, together with payment of the Exercise Price for each
Right exercised. Upon the exercise of an exercisable Right and payment of the
Exercise Price in accordance with the provisions of this Agreement, the holder
of such Right shall be entitled to receive, subject to adjustment as provided
herein, one one-hundredth of a Preferred Share (or, following the occurrence of
a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares, other
securities, cash and/or other property in accordance with the provisions of this
Agreement).
(c) The Exercise Price for the exercise of each Right shall initially be
$115 (One Hundred Fifteen Dollars) and shall be payable in lawful money of the
United States of America in accordance with Section 7(f) hereof. The Exercise
Price and the number of Preferred Shares (or, following the occurrence of a
Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares, cash and/or
other property in accordance with the provisions of this Agreement) to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 7(e), 11 and 13 hereof and the other provisions of
this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, from and
after the earlier of the date of the first Section 11(a)(ii) Event or the date
of the first Section 13(a) Event, any Rights that are or were Beneficially Owned
by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at any
time on or after the Distribution Date shall be null and void, and for all
purposes of this Agreement such Rights shall thereafter be deemed not to be
outstanding, and any holder of such Rights (whether or not such holder is a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder) shall thereafter
have no right to exercise such Rights.
(e) Prior to the Distribution Date, if the Board of Directors of the
Company shall have determined that such action adequately protects the interests
of the holders of Rights, the Company may, in its discretion, substitute for all
or any portion of the Preferred Shares that would otherwise be issuable (after
the Close of Business on the Distribution Date) upon the exercise of each Right
and payment of the Exercise Price, (i) cash, (ii) other equity securities of the
Company, (iii) debt securities of the Company, (iv) other property or (v) any
combination of the foregoing, in each case having an aggregate Current Market
Price equal to the aggregate Current Market Price of the Preferred Shares for
which substitution is made. Subject to Section 7(d) hereof, in the event that
the Company takes any action pursuant to this Section 7(e), such action shall
apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase, including certificate, completed and duly
executed, with signature guaranteed, accompanied by payment of the Exercise
Price for each Right to be exercised and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check or cashier's check payable
to the order of the Company, the Rights Agent shall thereupon promptly (i)
requisition from the transfer agent of the Preferred Shares (or, following the
occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares,
other securities, cash and/or other property in
11
accordance with the provisions of this Agreement), certificates for the number
of Preferred Shares (or such other securities) to be purchased, and the Company
hereby irrevocably authorizes such transfer agent to comply with all such
requests, and/or, as provided in Section 14 hereof, requisition from the
depositary agent described therein depositary receipts representing such number
of one-hundredths of a Preferred Share (or such other securities) as are to be
purchased (in which case certificates for the Preferred Shares (or such other
securities) represented by such receipts shall be deposited by the transfer
agent with such depositary agent) and the Company hereby directs such depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional
Preferred Shares (or such other securities) in accordance with Section 14
hereof, (iii) after receipt of such certificates, depositary receipts or cash,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt thereof, deliver such cash
to or upon the order of the registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be suspended for such period as shall
reasonably be necessary for the Company to register under the Securities Act and
any applicable securities law of any jurisdiction the Preferred Shares to be
issued pursuant to the exercise of the Rights; provided, however, that nothing
contained in this Section 7 shall relieve the Company of its obligations under
Section 9(c) hereof.
(h) In case the registered holder of any Right Certificate shall
exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
12
Section 9. Reservation and Availability of Capital Stock.
(a) Subject to Section 7(e) hereof, the Company shall cause to be
reserved and kept available out of its authorized and unissued equity securities
(or out of its authorized and issued equity securities held in its treasury),
the number of such equity securities that will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise of the
Rights are listed on any national securities exchange, the Company shall use its
best efforts, from and after such time as the Rights become exercisable, to
cause all such securities issued or reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon exercise of
the Rights, the Company shall use its best efforts, from and after the
Distribution Date, to register such securities under the Securities Act and any
applicable securities laws and to keep such registration effective until the
earlier of the Redemption Date or the Expiration Date.
(d) The Company shall take all such action as may be necessary to ensure
that all securities delivered upon exercise of the Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable securities.
(e) The Company shall pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates or of any securities upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of a Right Certificate to
a Person other than, or the issuance or delivery of a certificate for securities
in respect of a name other than that of, the registered holder of the Right
Certificate representing Rights surrendered for exercise, or to issue or deliver
any certificate for securities upon the exercise of any Right until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(f) With respect to the Common Shares and/or other securities issuable
pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants shall be
applicable only upon and following the occurrence of a Section 11(a)(ii) Event.
Section 10. Securities Record Date.
Each person in whose name any certificate for securities of the Company is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the securities represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
representing such Rights was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such
13
surrender and payment is a date upon which the securities transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such securities on, and such certificate shall be dated, the next succeeding
Business Day on which the securities transfer books of the Company are open.
Section 11. Adjustment of Exercise Price, Number of Shares Issuable Upon
Exercise of Rights or Number of Rights.
The Exercise Price, the number and kind of securities that may be purchased
upon exercise of a Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the
Close of Business on the Record Date and prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date (A) declare or
pay any dividend on the Preferred Shares payable in Preferred Shares or
Voting Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares
or (D) issue Preferred Shares or Voting Shares in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, and upon each such event, the number and kind of
Preferred Shares or other securities issuable upon the exercise of a Right
on the date of such event shall be proportionately adjusted so that the
holder of any Right exercised on or after such date shall be entitled to
receive, upon the exercise thereof and payment of the Exercise Price, the
aggregate number and kind of Preferred Shares or other securities or other
property, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when such Right was
exercisable and the transfer books of the Company were open, such holder
would have owned upon such exercise and would have been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs that 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) In the event (a "Section 11(a)(ii) Event") that a 15%
Ownership Date shall have occurred and neither the Redemption Date nor the
Expiration Date shall have occurred prior to the tenth Business Day
following such 15% Ownership Date, then, and effective as of the end of
such tenth Business Day, proper provision shall be made so that except as
provided in Section 7(d) hereof, each holder of a Right shall thereafter
have the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement and payment of the then current Exercise Price, in
lieu of the securities or other property otherwise purchasable upon such
exercise, such number of Common Shares of the Company as shall equal the
result obtained by multiplying the then current Exercise Price by the then
number of one-hundredths of a Preferred Share for which a Right was
exercisable (or, if the Distribution Date shall not have occurred prior to
the date of such
14
Section 11(a)(ii) Event, the number of one-hundredths of a Preferred Share
for which a Right would have been exercisable if the Distribution Date had
occurred on the Business Day immediately preceding the date of such Section
11(a)(ii) Event) immediately prior to such Section 11(a)(ii) Event, and
dividing that product by 50% of the Current Market Price (determined
pursuant to Section 11(d) hereof) of a Common Share on the date of
occurrence of the relevant Section 11(a)(ii) Event (such number of shares
being hereinafter referred to as the "Adjustment Shares"). Successive
adjustments shall be made pursuant to this paragraph each time a Section
11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii) Event the
aggregate number of Common Shares that are authorized by the Company's
Restated Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is less than
the aggregate number of Adjustment Shares thereafter issuable upon the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof
(the excess of such number of Adjustment Shares over and above such number
of Common Shares being hereinafter referred to as the "Unavailable
Adjustment Shares"), then, and upon each such event, the Company shall
substitute for the pro rata portion of the Unavailable Adjustment Shares
that would otherwise be issuable thereafter upon the exercise of each Right
and payment of the Exercise Price, (A) cash, (B) other equity securities of
the Company (including, without limitation, shares of preferred stock of
the Company or units of such shares having the same Current Market Price as
one Common Share (a "Common Share Equivalent")), (C) debt securities of the
Company, (D) other property or (E) any combination of the foregoing, in
each case having an aggregate Current Market Price equal to the aggregate
Current Market Price of the Unavailable Adjustment Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 11(a)(iii), such action
shall apply uniformly to all outstanding Rights.
(b) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, fix a record date prior to the
earlier of the Redemption Date or the Expiration Date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
initially to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("Preferred
Share Equivalents")) or securities convertible into Preferred Shares or
Preferred Share Equivalents, at a price per Preferred Share or Preferred Share
Equivalent (or having a conversion price per share, if a security convertible
into Preferred Shares or Preferred Share Equivalents) less than the Current
Market Price per Preferred Share on such record date, then, and upon each such
event, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be equal to the sum of
the number of Preferred Shares outstanding on such record date plus the number
of Preferred Shares that the aggregate offering price of the total number of
Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the
aggregate initial conversion price of the convertible securities to be so
offered) would purchase at such Current Market Price, and the
15
denominator of which shall be equal to the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred Shares
and/or Preferred Share Equivalents to be offered for subscription or purchase
(or into which the convertible securities to be so offered are initially
convertible); provided, however, that if such rights, options or warrants are
not exercisable immediately upon issuance but become exercisable only upon the
occurrence of a specified event or the passage of a specified period of time,
then the adjustment to the Exercise Price shall be made and become effective
only upon the occurrence of such event or such passage of time, and such
adjustment shall be made as if the record date for the issuance of such rights,
options or warrants had been the business day immediately preceding the date
upon which such rights, options or warrants became exercisable. Preferred Shares
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment to the Exercise Price
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 Exercise Price shall
be adjusted to be the Exercise Price that would then be in effect if such record
date had not been fixed.
(c) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of securities or assets (other than a
distribution of securities for which an adjustment is required under Section
11(a)(i) or (b) hereof or a regular quarterly cash dividend), then the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be equal to the excess of the Current
Market Price per Preferred Share on such record date over and above the fair
market value of the portion of the securities or assets to be so distributed
with respect to one Preferred Share, and the denominator of which shall be equal
to such Current Market Price per Preferred Share. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such a
distribution is not so made, the Exercise Price shall be adjusted to be the
Exercise Price that would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation under this Section 11, if the
Preferred Shares are not publicly held or traded, the "Current Market Price" per
Preferred Share shall be conclusively deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Exercise
Price; provided, however, that any adjustments that by reason of this Section
11(e) are not required to be made shall be cumulated and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one-hundredth of a Common Share or other
share or one-ten thousandth of a Preferred Share, as the case may be.
16
(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any securities of the Company other than Preferred Shares, the number of such
other securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Preferred Shares contained in this
Section 11, and the other provisions of this Agreement with respect to Preferred
Shares shall apply on like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths of a
Preferred Share 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) below, upon each adjustment of the Exercise Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter represent
the right to purchase, at the adjusted Exercise Price, that number of one-
hundredths of a Preferred Share (calculated to the nearest one-ten thousandth of
a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of the
Exercise Price, to adjust the number of Rights instead of making any adjustment
in the number of Preferred Shares purchasable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one one-hundredth of a Right) obtained by
dividing the Exercise Price in effect immediately prior to the adjustment of the
Exercise Price by the Exercise Price in effect immediately after such adjustment
of the Exercise Price. The Company shall make a public announcement of its
election to adjust the number of Rights pursuant to this Section 11(i),
indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. Such record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if separate Right
Certificates have been issued, it shall be at least 10 days after the date of
such public announcement. If separate Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
representing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment or, at the option of
the Company, cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of such adjustment, and upon surrender thereof if required by the Company,
new Right Certificates representing all
17
the Rights to which such holders shall be entitled after such adjustment. Right
Certificates to be so distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the Company, the
adjusted Exercise Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or the
number of one-hundredths of a Preferred Share issuable upon the exercise of one
Right, the Right Certificates theretofore and thereafter issued may continue to
express the Exercise Price per one one-hundredth of a Preferred Share and the
number of Preferred Shares issuable upon the exercise of one Right that were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Exercise Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Exercise 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 of the
number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due ββββ or other appropriate
instrument representing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such further adjustments in the number of one-
hundredths of a Preferred Share that may be purchased upon exercise of one
Right, and such further adjustments in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any Preferred Shares at less than the Current Market Price thereof,
(iii) issuance wholly for cash of Preferred Shares or securities that by their
terms are convertible into or exchangeable for Preferred Shares, (iv) dividends
on Preferred Shares payable in Preferred Shares or (v) issuance of rights,
options or warrants referred to Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earliest
of the date of the first Section
18
11(a)(ii) Event, the date of the first Section 13(a) Event, the Redemption Date
or the Expiration Date, (i) pay any dividend on the Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the
outstanding Common Shares into a smaller number of Common Shares or (iv) issue
Common Shares in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and upon each such
event, the Exercise Price to be in effect after such event shall be determined
by multiplying the Exercise Price in effect immediately prior to such event by a
fraction, the numerator of which shall be equal to the number of Common Shares
outstanding immediately prior to such event and the denominator of which shall
be equal to the number of Common Shares outstanding immediately after such
event. Successive adjustments shall be made pursuant to this Section 11(n) each
time such a dividend is paid or such a subdivision, combination or
reclassification is effected. If an event occurs that would require an
adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(n) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares Issuable
Upon Exercise of Rights.
Whenever an adjustment is made as provided in Section 11 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts giving rise to such adjustment, (b) file with
the Rights Agent and with each transfer agent for the securities issuable upon
exercise of the Rights a copy of such certificate and (c) mail a brief summary
thereof to each holder of Rights in accordance with Section 25 hereof.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or to give such notice shall not affect the validity or the force
and effect of such adjustment. Any adjustment to be made pursuant to Sections
11 or 13 hereof shall be effective as of the date of the event giving rise to
such adjustment.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or Earning
Power.
(a) In the event (a "Section 13(a) Event") that, at any time on or
after the 15% Ownership Date and prior to the earlier of the Redemption Date or
the Expiration Date, (1) the Company shall, directly or indirectly, consolidate
with or merge with and into any other Person and the Company shall not be the
continuing or surviving corporation in such consolidation or merger, (2) any
Person shall, directly or indirectly, consolidate with or merge with and into
the Company and the Company shall be the continuing or surviving corporation in
such merger and, in connection with such merger, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities of any
Person or cash or any other property, or (3) the Company and/or any one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer,
in one or more transactions (other than transactions in the ordinary course of
business), 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 one or more of its wholly owned
Subsidiaries (such Persons, together with the
19
Persons described in clauses (1) and (2) above shall be collectively referred to
in this Section 13 as the "Surviving Person"), then, and in each such case,
proper provision shall be made so that:
(i) except as provided in Section 7(d) hereof, each holder of a
Right shall thereafter have the right to receive, upon the exercise thereof
in accordance with the terms of this Agreement and payment of the then
current Exercise Price, in lieu of the securities or other property
otherwise purchasable upon such exercise, such number of validly authorized
and issued, fully paid and nonassessable Common Shares of the Surviving
Person as shall be equal to a fraction, the numerator of which is the
product of the then current Exercise Price multiplied by the number of one-
hundredths of a Preferred Share purchasable upon the exercise of one Right
immediately prior to the first Section 13(a) Event (or, if the Distribution
Date shall not have occurred prior to the date of such Section 13(a) Event,
the number of one-hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the Business Day
immediately preceding the date of such Section 13(a) Event, or, if a
Section 11(a)(ii) Event has occurred prior to such Section 13(a) Event, the
product of the number of one-hundredths of a Preferred Share purchasable
upon the exercise of a Right (or, if the Distribution Date shall not have
occurred prior to the date of such Section 11(a)(ii) Event, the number of
one-hundredths of a Preferred Share that would have been so purchasable if
the Distribution Date had occurred on the Business Day immediately
preceding the date of such Section 11(a)(ii) Event) immediately prior to
such Section 11(a)(ii) Event, multiplied by the Exercise Price in effect
immediately prior to such Section 11(a)(ii) Event), and the denominator of
which is 50% of the Current Market Price per Common Share of the Surviving
Person on the date of consummation of such Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term, "Company," shall thereafter be deemed to refer to the
Surviving Person; and
(iv) the Surviving Person shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as
may be necessary to ensure that the provisions hereof shall thereafter be
applicable to its Common Shares thereafter deliverable upon the exercise of
Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is the sale
or transfer in one or more transactions of assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole), but less than 100% thereof, then each Person acquiring all
or a portion thereof shall assume the obligations of the Company as to a
fraction of each of the Rights equal to the fraction of the assets of the
Company and its Subsidiaries (taken as a whole) acquired by such Person, and the
obligations of the
20
Company as to the remaining fraction of each of the Rights shall continue to be
the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless prior
thereto the Company and the Surviving Person shall have executed and delivered
to the Rights Agent a supplemental agreement confirming that such Surviving
Person shall, upon consummation of such Section 13(a) Event, assume this
Agreement in accordance with Section 13 hereof, that all rights of first refusal
or preemptive rights in respect of the issuance of Common Shares of such
Surviving Person upon exercise of outstanding Rights have been waived and that
such Section 13(a) Event shall not result in a default by such Surviving Person
under this Agreement, and further providing that, as soon as practicable after
the date of consummation of such Section 13(a) Event, such Surviving Person
shall:
(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, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing, use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date,
and similarly comply with all applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the Common Shares of the Surviving Person purchasable upon
exercise of the Rights on a national securities exchange, or use its best
efforts to cause the Rights and such Common Shares to meet the eligibility
requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for such Surviving Person that comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.
(d) In the event that at any time after the occurrence of a Section
11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant
to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described in Section 13(a)
hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.
(e) The provisions of this Section 13 shall apply to each successive
merger, consolidation, sale or other transfer constituting a Section 13(a)
Event.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates that represent fractional Rights. If the
Company shall determine not to issue
21
such fractional Rights, the Company shall pay to the registered holders of the
Right Certificates with respect to which such fractional Rights would otherwise
be issuable, at the time such fractional Rights would otherwise have been issued
as provided herein, an amount in cash equal to the same fraction of the Current
Market Price of a whole Right on the Business Day immediately prior to the date
upon which such fractional Rights would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares (other than fractions that are integral multiples of
one one-hundredth of a Preferred Share) upon exercise of Rights, or to
distribute certificates that represent fractional Common Shares or Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-hundredth of a Preferred Share may, at the election of the Company, be
represented by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
Preferred Shares. If the Company shall determine not to issue fractional Common
Shares or Preferred Shares (or depositary receipts in lieu of Preferred Shares),
the Company shall pay to the registered holders of Right Certificates with
respect to which such fractional Common Shares or Preferred Shares would
otherwise be issuable, at the time such Rights are exercised as provided herein,
an amount in cash equal to the same fraction of the Current Market Price of a
whole Common Share or Preferred Share, as the case may be. For purposes of this
Section 14(b), the Current Market Price of a whole Common Share or Preferred
Share shall be the Closing Price per share for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
Common Shares or Preferred Shares upon exercise of such 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 given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates and certificates for
Common Shares representing Rights, and any registered holder of any Right
Certificate or of such certificate for Common Shares, without the consent of the
Rights Agent or of the holder of any other Right Certificate or any other
certificate for Common Shares may, in such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights represented by such Right Certificate
or by such certificate for Common Shares in the manner provided in such
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance,
22
and injunctive relief against actual or threatened violations, of the
obligations of any Person under this Agreement.
Section 16. Agreement of Right Holders.
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be represented by
certificates for Common Shares registered in the name of the holders of such
Common Shares (which certificates for Common Shares shall also constitute Right
Certificates), and each such Right shall be transferable only in connection with
the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates shall only be
transferable on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate is registered as the absolute owner thereof and
of the Rights represented thereby (notwithstanding any notations of ownership or
writing on the Right Certificate by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Holder and Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right or Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
securities of the Company that may at any time be issuable upon the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, in each case until such Right or the
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent the compensation agreed
to in writing by the Company and the Rights Agent for all services rendered by
it hereunder, as well as its reasonable out-of-pocket expenses. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross
23
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including, without limitation, the costs
and expenses of defending against any claim of liability arising under 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 in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares 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 and executed by the proper person or persons, or otherwise upon the
advice of its counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. If, at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in such Right Certificates, and
in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed, and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in such Right Certificates and in this Agreement.
24
Section 20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations expressly imposed by
this Agreement (and no implied duties or obligations shall be read into this
Agreement against the Rights Agent) upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance of the Rights, 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 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 one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the 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 suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person 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 Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent is serving as an administrative agent and
accordingly, shall not be under any responsibility in respect of the legality or
validity of any of the provisions of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including any Rights becoming null
and void pursuant to Section 7(d) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
7, 11, 13 and 23 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of Rights represented by Right Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares or other securities to be issued pursuant to
this Agreement
25
or any Right Certificate, or as to whether any Preferred Shares or Common Shares
or other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the 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 or for any delay in acting while awaiting instructions.
(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 the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other 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 that reasonable care was exercised in the
selection thereof.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice in writing mailed to
the Company. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares and Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting as such, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit such holder's Right Certificate
for inspection by the Company), then the Company shall become the Rights Agent
and the
26
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of Ohio (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 Ohio), in good standing, that is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. 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 of this
Agreement and so that the successor Rights Agent may appropriately act as Rights
Agent hereunder. 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 Shares and Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Right
Certificates to the contrary, the Company may, at its option (subject to Section
4 hereof), issue new Right Certificates in such form as may be approved by the
Board of Directors in order to reflect any adjustment or change in the Exercise
Price and the number or kind or class of shares or other securities or property
purchasable upon exercise of the Rights in accordance with the provisions of
this Agreement.
Section 23. Redemption of Rights.
(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration
Date, the Board of Directors of the Company may, at its option, authorize and
direct the redemption of all, but not less than all, of the then outstanding
Rights at a redemption price of $0.001 per Right, as such redemption price shall
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Redemption Price"), and the
Company shall so redeem the Rights.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing and directing the redemption of the Rights pursuant to subsection
(a) of this Section 23, or at such time and date thereafter as it may specify,
and without any further action and without any notice, the right to exercise
Rights shall terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within 10 Business Days after the
27
date of such action, the Company shall give notice of such redemption to the
holders of Rights by mailing such notice to all holders of Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, if
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice that is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives such notice, but
neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of such redemption. Each such notice of Redemption
shall state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may, directly
or indirectly, redeem, acquire or purchase for value any Rights in any manner
other than that specifically set forth in Section 24 hereof or in this Section
23, and other than in connection with the purchase of Common Shares prior to the
earlier of the date of the first Section 11(a)(ii) Event or the date of the
first Section 13(a) Event.
(c) The Company may, at its option, pay the Redemption Price in cash,
Common Shares, Preferred Shares, other equity securities of the Company, debt
securities of the Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the Redemption Date
equal to the Redemption Price.
Section 24. Exchange of Rights.
(a) At any time after the 15% Ownership Date and prior to the first date
thereafter upon which a 15% Stockholder, together with all Affiliates and
Associates of such 15% Stockholder, shall be the Beneficial Owner of 50% or more
of the Voting Shares then outstanding, the Board of Directors of the Company
may, at its option, except as provided in Section 7(d) hereof, authorize and
direct the exchange of all, but not less than all, of the then outstanding
Rights for Common Shares at an exchange ratio (the "Exchange Ratio") equal to
one Common Share per Right on such date.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing and directing the exchange of the Rights pursuant to subsection (a)
of this Section 24, or at such time and date thereafter as it may specify, and
without any further action and without any notice, the right to exercise Rights
shall terminate and the only right thereafter of the holders of Rights shall be
to receive a number of Common Shares equal to the Exchange Ratio. Within 10
Business Days after the date of such action, the Company shall give notice of
such exchange to the holders of Rights by mailing such notice to all holders of
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, if prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives such
notice, but neither the failure to give any such notice nor any defect therein
shall affect the legality or validity of such exchange. Each such notice of
exchange shall state the method by which the Rights will be exchanged for Common
Shares. Neither the Company nor any of its Affiliates or Associates may,
directly or indirectly, redeem, acquire or purchase for value any Rights in any
manner other than (i) as specifically set forth in Section 23 hereof, (ii) as
specifically set forth in this Section 24 or (iii) in connection with the
purchase of Common
28
Shares prior to the earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute (i) cash, (ii) other equity securities of the Company
(including, but not limited to, Common Share Equivalents), (iii) debt securities
of the Company, (iv) other property or (v) any combination of the foregoing for
the Common Shares exchangeable for Rights, as appropriately adjusted. Subject
to Section 7(d) hereof, in the event that the Company takes any action pursuant
to this Section 24, such action shall apply uniformly to all outstanding Rights.
Section 25. Notice of Certain Events.
(a) In the event that the Company shall propose (i) to declare or pay any
dividend payable on or make any distribution with respect to its Common Shares
or Preferred Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Common Shares or Preferred Shares options, rights or
warrants to subscribe for or to purchase any additional shares thereof or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Common Shares or Preferred Shares (other than
a reclassification involving only the subdivision of outstanding shares), (iv)
to effect any consolidation or merger with or into, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then and in each such case, the Company shall give to
each holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of such proposed action, that shall specify the
record date for the purpose of such dividend or distribution, or the date upon
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 record of the Common Shares or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the Common Shares or Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares or Preferred Shares, whichever date
shall be the earlier. The failure to give the notice required by this Section
25 or any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) Upon the occurrence of each Section 11(a)(ii) Event and each Section
13(a) Event, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event, specifying the
event and the consequences of the event to holders of Rights under Sections 11
and 13 hereof.
29
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the 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:
Too, Inc.
ββββ βββββ ββββ
ββββββββ, ββββ βββββ
Attention: Chief Executive Officer
with a copy to:
ββββββ β. ββββββββ, Esq.
Porter, Wright, ββββββ & ββββββ LLP
ββ βββββ ββββ ββββββ
ββββββββ, ββ βββββ
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent 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) to the principal office of the
Rights Agent as follows:
EquiServe Trust Company, N.A.
βββ ββββββββββ ββββ.
βββββ ββββ
ββββββ ββββ, βββ ββββββ βββββ
Attention: Transfer Agent responsible for Too, Inc.
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments.
(a) The Board of Directors of the Company may, from time to time, before
and after the Distribution Date, without the approval of any holders of Rights,
supplement or amend any provision of this Agreement in any manner, whether or
not such supplement or amendment is adverse to any holder of Rights, and direct
the Rights Agent so to supplement or amend such provision, and the Rights Agent
shall so supplement or amend such provision; provided, however, that from and
after the earliest of (i) the date of the first Section 11(a)(ii) Event, (ii)
the
30
date of the first Section 13(a) Event, (iii) the Redemption Date or (iv) the
Expiration Date, this Agreement shall not be supplemented or amended in any
manner that would materially and adversely affect any holder of outstanding
Rights other than a 15% Stockholder or a Surviving Person.
(b) From and after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event and prior to the earlier of
the Redemption Date or the Expiration Date, the Company shall not effect any
amendment to the Certificate of Designations for the Preferred Shares that would
materially and adversely affect the rights, privileges or preferences of the
Preferred Shares without the prior approval of the holders of two-thirds or more
of the then outstanding Rights.
Section 28. Certain Covenants.
Subject to Section 27 hereof and the other provisions of this Agreement,
from and after the earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event and prior to the earlier of the
Redemption Date or the Expiration Date, the Company shall not (a) issue or sell,
or permit any Subsidiary to issue or sell, to a 15% Stockholder or a Surviving
Person, or any Affiliate or Associate of a 15% Stockholder or a Surviving
Person, or any Person holding Voting Shares of the Company that are Beneficially
Owned by a 15% Stockholder or a Surviving Person, (i) any rights, options,
warrants or convertible securities on terms similar to, or that materially
adversely affect the value of, the Rights or (ii) Preferred Shares, Common
Shares or shares of any other class of capital stock, if such sale is intended
to or would materially adversely affect the value of the Rights, or (b) take any
other action that is intended to or would materially adversely affect the value
of the Rights.
Section 29. 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 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, the registered holders of the Right
Certificates (other than those representing Rights that have become null and
void) and the certificates for Common Shares representing Rights (other than
those Rights that have become null and void) any legal or equitable right,
remedy or claim under this Agreement, and this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent, such registered holders
of Right Certificates and such certificates for Common Shares representing
Rights.
31
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.
Section 32. Governing Law.
This Agreement and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such
state applicable to contracts made and performed entirely within such state;
provided, however that with respect solely to matters regarding the rights and
obligations of the Rights Agent hereunder, the laws of the State of New Jersey
shall govern.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each such
counterpart shall for all purposes be deemed to be an original and all such
counterparts shall together constitute but one and the same instrument.
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.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
Too, Inc.
By: /s/ βββββββ β. ββββββ
-------------------------
βββββββ β. ββββββ
Chairman, President and
Chief Executive Officer
EquiServe Trust Company, N.A.
as Rights Agent
By: /s/ ββββββ β. βββββββ
-----------------------------
Name: ββββββ β. βββββββ
---------------------------
Title: Managing Director
--------------------------
33
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING
CUMULATIVE PREFERRED STOCK,
$.01 Par Value
of
TOO, INC.
Pursuant to Section 151 of the
General Corporation
Law of the State of Delaware
A-1
CERTIFICATE
We, βββββββ β. ββββββ, Chairman, President and Chief Executive Officer, and
ββββ β. ββββββββββ, Secretary, of Too, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware, 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 of the Corporation, the Board
of Directors on August 14, 2001, adopted the following resolution creating a
series of 3,000,000 (Three Million) shares of Preferred Stock, par value $.01
per share, designated as Series A Junior Participating Cumulative Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Amended and
Restated 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 or restrictions thereof, are as follows:
Section 1. Designation and Amount. The shares of such series shall be
----------------------
designated as Series A Junior Participating Cumulative Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"), and the number of shares
constituting such series shall be 3,000,000 (Three Million).
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series A Preferred Stock, in preference to
the holders of shares of Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock") and of any other junior stock of the
Corporation that may be outstanding, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the tenth day of
January, April, July and October 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 the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (i) $.25 per
share ($1.00 per annum), or (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 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, or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding
A-2
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of
a share of Series A Preferred Stock. In the event that the Corporation
shall at any time declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then and in each such event, the amount to which the holder
of each share of Series A Preferred Stock was entitled immediately prior to
such event under clause (ii) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided,
however, 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 dividend of $.25 per share ($1.00 per annum) on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock,
unless the date of issue of such shares is prior to the record date 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
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which cases such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall cumulate but shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
A-3
Section 3. Voting Rights. The holders of shares of Series A Preferred
-------------
Stock shall have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes (and each one one-hundredth of a share of Series A Preferred
Stock shall entitle the holder thereof to one vote) on all matters
submitted to a vote of the stockholders of the Corporation. In the event
that the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then and in each such event, the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided in the Amended and Restated Certificate of
Incorporation of the Corporation or herein or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(c) In addition, the holders of shares of Series A Preferred Stock shall
have the following special voting rights:
(i) In the event that at any time dividends on Series A Preferred
Stock, whenever accrued and whether or not consecutive, shall not have
been paid or declared and a sum sufficient for the payment thereof set
aside, in an amount equivalent to six quarterly dividends on all shares
of Series A Preferred Stock at the time outstanding, then and in each
such event, the holders of shares of Series A Preferred Stock and each
other series of preferred stock now or hereafter issued that shall be
accorded such class voting right by the Board of Directors and that
shall have the right to elect one director (or, in the event any such
other series is entitled to a greater number of directors, such number
of directors, which shall be cumulative with and not in addition to the
director provided for herein, such director or directors being
hereinafter referred to as "Special Directors") as the result of a
prior or subsequent default in payment of dividends on such series
(each such other series being hereinafter called "Other Series of
Preferred Stock"), voting separately as a class without regard to
series,
A-4
shall be entitled to elect the Special Director at the next annual meeting
of stockholders of the Corporation, in addition to the directors to be
elected by the holders of all shares of the Corporation entitled to vote
for the election of directors, and the holders of all shares (including the
Series A Preferred Stock) otherwise entitled to vote for directors, voting
separately as a class, shall be entitled to elect the remaining members of
the Board of Directors, provided that the Series A Preferred Stock and each
Other Series of Preferred Stock, voting as a class, shall not have the
right to elect more than one Special Director (in addition to any Special
Director to which the holders of any Other Series of Preferred Stock are
then entitled). Such special voting right of the holders of shares of
Series A Preferred Stock may be exercised until all dividends in default on
the Series A Preferred Stock shall have been paid in full or declared and
funds sufficient therefor set aside, and when so paid or provided for, such
special voting right of the holders of shares of Series A Preferred Stock
shall cease, but subject always to the same provisions for the vesting of
such special voting rights in the event of any such future dividend default
or defaults.
(ii) At any time after such special voting rights shall have so vested in
the holders of shares of Series A Preferred Stock, the President or the
Secretary of the Corporation may, and upon the written request of the
holders of record of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock then outstanding
addressed to the Secretary at the principal executive office of the
Corporation shall, call a special meeting of the holders of shares of
Preferred Stock so entitled to vote, for the election of the Special
Directors to be elected by them as herein provided, to be held within 60
days after such call and at the place and upon the notice provided by law
and in the By-laws for the holding of meetings of stockholders; provided,
however, that the President or the Secretary shall not be required to call
such special meeting in the case of any such request received less than 90
days before the date fixed for any annual meeting of stockholders, and if
in such case such special meeting is not called or held, the holders of
shares of Preferred Stock so entitled to vote shall be entitled to exercise
the special voting rights provided in this paragraph at such annual
meeting. If any such special meeting required to be called as above
provided shall not be called by the President or the Secretary within 30
days after receipt of any such request, then the holders of record of 10%
or more in number of the shares of Series A Preferred Stock and each Other
Series of Preferred Stock then outstanding may designate in writing one of
their number to call such meeting, and the person so designated may, at the
expense of the Corporation, call such meeting to be held at the place and
upon the notice
A-5
given by such person, and for that sole purpose shall have access to the
stock books of the Corporation. No such special meeting and no adjournment
thereof shall be held on a date later than 60 days before the annual
meeting of stockholders. If, at any meeting so called or at any annual
meeting held while the holders of shares of Series A Preferred Stock have
the special voting rights provided for in this paragraph, the holders of
not less than 40% of the aggregate voting power of Series A Preferred Stock
and each Other Series of Preferred Stock then outstanding are present in
person or by proxy, which percentage shall be sufficient to constitute a
quorum for the election of additional directors as herein provided, the
then authorized number of directors of the Corporation shall be increased
by the number of Special Directors to be elected, as of the time of such
special meeting or the time of the first such annual meeting held while
such holders have special voting rights and such quorum is present, and the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting as a class, shall be entitled to elect the Special
Director or Directors so provided for. If the directors of the Corporation
are then divided into classes under provisions of the Amended and Restated
Certificate of Incorporation of the Corporation or the By-laws, the Special
Director or Directors shall belong to each class of directors in which a
vacancy is created as a result of such increase in the authorized number of
directors. If the foregoing expansion of the size of the Board of Directors
shall not be valid under applicable law, then the holders of shares of
Series A Preferred Stock and of each Other Series of Preferred Stock,
voting as a class, shall be entitled, at the meeting of stockholders at
which they would otherwise have voted, to elect a Special Director or
Directors to fill any then existing vacancies on the Board of Directors,
and shall additionally be entitled, at such meeting and each subsequent
meeting of stockholders at which directors are elected, to elect all of the
directors then being elected until by such class vote the appropriate
number of Special Directors has been so elected.
(iii) Upon the election at such meeting by the holders of shares of Series
A Preferred Stock and each Other Series of Preferred Stock, voting as a
class, of the Special Director or Directors they are entitled so to elect,
the persons so elected, together with such persons as may be directors or
as may have been elected as directors by the holders of all shares
(including Series A Preferred Stock) otherwise entitled to vote for
directors, shall constitute the duly elected directors of the Corporation.
Each Special Director so elected by holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock, voting as a class, shall
serve until the next annual meeting or until their respective successors
shall be elected and qualified, or if any such Special Director is a member
A-6
of a class of directors under provisions dividing the directors into
classes, each such Special Director shall serve until the annual meeting at
which the term of office of such Special Director's class shall expire or
until such Special Director's successor shall be elected and shall qualify,
and at each subsequent meeting of stockholders at which the directorship of
any Special Director is up for election, said special class voting rights
shall apply in the reelection of such Special Director or in the election
of such Special Director's successor; provided, however, that whenever the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock shall be divested of the special rights to elect one or
more Special Directors as above provided, the terms of office of all
persons elected as Special Directors, or elected to fill any vacancies
resulting from the death, resignation, or removal of Special Directors
shall forthwith terminate (and the number of directors shall be reduced
accordingly).
(iv) If, at any time after a special meeting of stockholders or an annual
meeting of stockholders at which the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a
class, have elected one or more Special Directors as provided above, and
while the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock shall be entitled so to elect one or more Special
Directors, the number of Special Directors who have been so elected (or who
by reason of one or more resignations, deaths or removals have succeeded
any Special Directors so elected) shall by reason of resignation, death or
removal be reduced the vacancy in the Special Directors may be filled by
any one or more remaining Special Director or Special Directors. In the
event that such election shall not occur within 30 days after such vacancy
arises, or in the event that there shall not be incumbent at least one
Special Director, the President or the Secretary of the Corporation may,
and upon the written request of the holders of record of 10% or more in
number of the shares of Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding addressed to the Secretary at the
principal office of the Corporation shall, call a special meeting of the
holders of shares of Series A Preferred Stock and each Other Series of
Preferred Stock so entitled to vote, for an election to fill such vacancy
or vacancies, to be held within 60 days after such call and at the place
and upon the notice provided by law and in the By-laws for the holding of
meetings of stockholders; provided, however, that the President or the
Secretary shall not be required to call such special meeting in the case of
any such request received less than 90 days before the date fixed for any
annual meeting of stockholders, and if in such case such special meeting is
not called, the holders of shares of Preferred Stock so entitled to vote
shall be entitled to fill such vacancy or vacancies at such annual meeting.
If
A-7
any such special meeting required to be called as above provided shall not
be called by the President or the Secretary within 30 days after receipt of
any such request, then the holders of record of 10% or more in number of
the shares of Series A Preferred Stock and each Other Series of Preferred
Stock then outstanding may designate in writing one of their number to call
such meeting, and the person so designated may, at the expense of the
Corporation, call such meeting to be held at the place and upon the notice
above provided, and for that purpose shall have access to the stock books
of the Corporation; no such special meeting and no adjournment thereof
shall be held on a date later than 60 days before the annual meeting of
stockholders.
(d) Nothing herein shall prevent the directors or stockholders from taking any
action to increase the number of authorized shares of Series A Preferred Stock,
or increasing the number of authorized shares of Preferred Stock of the same
class as the Series A Preferred Stock or the number of authorized shares of
Common Stock, or changing the par value of the Common Stock or Preferred Stock,
or issuing options, warrants or rights to any class of stock of the Corporation
as authorized by the Amended and Restated Certificate of Incorporation of the
Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote as set forth in the Amended and
Restated Certificate of Incorporation of the Corporation or herein or by law)
for taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(a) Whenever any dividends or other distributions payable on the Series A
Preferred Stock as provided in Section 2 hereof are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not, directly or indirectly:
(i) declare or pay dividends on, or make any other distributions with
respect to, any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on, or make any other distributions with
respect to, any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
A-8
Stock, except dividends paid ratably on shares of the Series A Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series A
Preferred Stock, or any shares of stock ranking on a parity with the Series
A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of 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, directly or indirectly, any
shares of 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 A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock, without designation as to series, and may be reissued as part
of any series of preferred stock created by resolution or resolutions of the
Board of Directors (including Series A Preferred Stock), subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made to:
(a) the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A Preferred
Stock shall have
A-9
received the greater of (i) $1.00 per share ($.01 per one one-hundredth of
a share), plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, or (ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate
amount to be distributed per share to holders of shares of Common Stock; or
(b) the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
In the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then and in each such event, the aggregate amount to
which the holder of each share of Series A Preferred Stock was entitled
immediately prior to such event under the proviso in clause (a) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the event that 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, or otherwise changed, then and in
each such event, the shares of Series A 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 100 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 that the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then and in each such event, the amount
set forth in the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
-------------
not be redeemable. Notwithstanding the foregoing, the Corporation may acquire
shares of Series A
A-10
Preferred Stock in any other manner permitted by law, the Amended and Restated
Certificate of Incorporation of the Corporation or herein.
Section 9. Rank. Unless otherwise provided in the Amended and Restated
----
Certificate of Incorporation of the Corporation or a Certificate of Designations
relating to a subsequent series of preferred stock of the Corporation, the
Series A Preferred Stock shall rank junior to all other series of the
Corporation's preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up, and senior to
the Common Stock of the Corporation.
Section 10. Amendment. The Amended and Restated Certificate of
---------
Incorporation of the Corporation shall not be amended in any manner that would
materially and adversely alter or change the powers, preferences or special
rights of the Series A Preferred Stock without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single series.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in
-----------------
fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) that shall entitle the holder thereof, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of shares of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 14th day of
August, 2001.
βββββββ β. ββββββ
Attest: _______________________________________
βββββββ β. ββββββ
ββββ β. ββββββββββ Chairman, President and Chief Executive
Officer
_______________________________
ββββ β. ββββββββββ
Secretary
A-11
Exhibit B
FORM OF
RIGHT CERTIFICATE
Certificate No. R-___________ Rights
NOT EXERCISABLE AFTER AUGUST 14, 2011, OR EARLIER IF REDEEMED OR EXCHANGED. THE
RIGHTS ARE SUBJECT TO EXPIRATION, REDEMPTION AND EXCHANGE ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
TOO, INC.
This certifies that ______________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms and conditions of a Rights Agreement
(the "Rights Agreement") dated as of August 14, 2001, by and between Too, Inc.,
a Delaware corporation (the "Company"), and EquiServe Trust Company, N.A. (the
"Rights Agent"), to purchase from the Company at any time prior to the earlier
of the Redemption Date (as such term is defined in the Rights Agreement) or 5:00
o'clock p.m., Columbus, Ohio time, on the Expiration Date (August 14, 2011),
unless the Distribution Date (as defined in the Rights Agreement) shall have
occurred on or prior to such date and the Rights shall have separated from the
Common Shares, in which case the Expiration Date is the date that is the tenth
anniversary of the Distribution Date), at the office or agency of the Rights
Agent in Jersey City, New Jersey, or at the office of its successor as Rights
Agent, one one-hundredth of a fully paid and nonassessable share of Series A
Junior Participating Cumulative Preferred Stock, par value $.01 per share, of
the Company (a "Preferred Share") or, in certain circumstances, other securities
or other property, at a purchase price of $115 (One Hundred Fifteen Dollars) per
one one-hundredth of a Preferred Share (the "Exercise Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase,
including Certificate, on the reverse side hereof completed and duly executed,
with signature guaranteed.
B-1
The number of Rights represented by this Right Certificate and the Exercise
Price set forth above are the number of Rights and the Exercise Price as of
August 14, 2001, based upon the Preferred Shares as constituted on such date. As
provided in the Rights Agreement, the Exercise Price and the number of Preferred
Shares or other securities or other property that may be purchased upon the
exercise of the Rights represented by this Right Certificate are subject to
modification and adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights, limitations
of rights, obligations, duties and immunities of the Rights Agent, the Company
and the holders of Right Certificates. This Right Certificate is subject to all
the terms and conditions of the Rights Agreement, which terms and conditions are
hereby incorporated herein by reference and made a part hereof. Copies of the
Rights Agreement are on file at the principal executive offices of the Company
and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
presentation and surrender at the above-mentioned offices of the Rights Agent,
with the Form of Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a like aggregate
number of Preferred Shares or, in certain circumstances, other securities or
other property, as the Rights represented by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive, upon the surrender hereof with the Form of Election to Purchase,
including Certificate, on the reverse side hereof completed and duly executed,
with signature guaranteed, another Right Certificate or Right Certificates for
the number of whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights represented by this Right Certificate may be
redeemed by the Company, at its option, at a redemption price of $0.001 per
Right or, upon the occurrence of certain events, the Company, at its option, may
exchange such Rights for fully paid and nonassessable shares of Common Stock,
par value $.01 per share, of the Company at an exchange ratio, per Right, of
that number of Common Shares (as defined in the Rights Agreement) which, as of
the date of the Board of Directors' action, has a Current Market Price (as
defined in the Rights Agreement) equal to the difference between the Exercise
Price and the Current Market Price of the Common Shares which each holder of a
Right would have a right to receive upon the exercise of a Right on such date.
No fractional securities shall be issued upon the exercise of any Right or
Rights represented hereby (other than fractions of Preferred Shares that are
integral multiples of one one-hundredth of a Preferred Share, that may, at the
option of the Company, be represented by depository receipts), but in lieu
thereof, a cash payment shall be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or other securities of the
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Company that may at any time be issuable on the exercise hereof, nor shall
anything contained 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, until the Right or Rights represented by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _____ __, 2001.
Attest: Too, Inc.
By:___________________________ By:_________________________________
Name: ββββ β. ββββββββββ Name: βββββββ β. ββββββ
Title: Secretary Title: President and Chief Executive
Officer
Countersigned:
EquiServe Trust Company, N.A.
By:__________________________
Name:________________________
Title:_______________________
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer any
or all of the Rights represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_________________________________________________ (Name, address and social
security or other identifying number of transferee)
______________________________________(____________________) of the Rights
represented by this Right Certificate, together with all right, title and
interest in and to said Rights, and hereby irrevocably constitutes and appoints
____________________________ attorney to transfer said Rights on the books of
Too, Inc. with full power of substitution.
Dated:______________________ _____________________________
(Signature)
Signature Guaranteed:
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise any
or all of the Rights represented by this Right Certificate)
To TOO, INC.:
The undersigned hereby irrevocably elects to exercise __________________________
(_____________) of the Rights represented by this Right Certificate to purchase
the following:
(Check one of the following boxes)
[_] The Preferred Shares or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section 7(c) of the
Rights Agreement.
[_] The shares of the Common Stock, par value $.01 per share, of the
Company, or other securities or property issuable upon the exercise of
said number of Rights pursuant to Section 11(a)(ii) of the Rights
Agreement.
[_] The securities issuable upon the exercise of said number of Rights
pursuant to Section 13(a) of the Rights Agreement.
The undersigned hereby requests that any such property and a certificate for any
such securities be issued in the name of and delivered to:
___________________________________________
(Name, address and social security or other identifying number of issuee)
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The undersigned hereby further requests that if said number of Rights shall not
be all the Rights represented by this Right Certificate, a new Right Certificate
for the remaining balance of such Rights be issued in the name of and delivered
to: _____________________________________
(Name, address and social security or other identifying number of issuee)
Dated:________________________ ______________________________
(Signature)
Signature Guaranteed:
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this Right
Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement).
Dated:_______________________ _____________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate, if
applicable, must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
In the event that the foregoing Certificate is not duly executed, with signature
guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any property or certificate for securities upon
the exercise of this Right Certificate or issue any new Right Certificate for
any remaining balance of unexercised Rights represented by this Right
Certificate.
B-5
EXHIBIT C
TOO, INC.
FORM OF
SUMMARY OF THE RIGHTS
On August 14, 2001, the Board of Directors of Too, Inc. (the "Company")
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of common stock, par value $.01 per share, of the
Company (the "Common Shares"). The dividend is payable on August 28, 2001 (the
"Record Date") to the holders of record of Common Shares as of the close of
business on such date.
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement"), dated as of August
14, 2001, by and between the Company and EquiServe Trust Company, N.A. as Rights
Agent (the "Rights Agent").
1. Common Share Certificates Representing Rights
Until the Distribution Date (as defined in Section 2 below), (a) the Rights
shall not be exercisable, (b) the Rights shall be attached to and trade only
together with the Common Shares and (c) the stock certificates representing
Common Shares shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. Distribution Date
The "Distribution Date" is the earliest of:
(a) the tenth business day following the date of the first public
announcement that any person (other than the Company or certain related
entities, and with certain additional exceptions) has become the beneficial
owner of 15% or more of the then outstanding Common Shares (such person is
a "15% Stockholder" and the date of such public announcement is the "15%
Ownership Date");
(b) the tenth business day (or such later day as shall be designated
by the Board of Directors) following the date of the commencement of, or
the announcement of an intention to make, a tender offer or exchange offer,
the consummation of which would cause any person to become a 15%
Stockholder; or
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(c) the first date, on or after the 15% Ownership Date, upon which the
Company is acquired in a merger or other business combination in which the
Company is not the surviving corporation or in which the outstanding Common
Shares are changed into or exchanged for stock or assets of another person,
or upon which 50% or more of the Company's consolidated assets or earning
power are sold (other than in transactions in the ordinary course of
business).
In calculating the percentage of outstanding Common Shares that are
beneficially owned by any person, such person shall be deemed to beneficially
own any Common Shares issuable upon the exercise, exchange or conversion of any
options, warrants or other securities beneficially owned by such person;
provided, however, that such Common Shares issuable upon such exercise shall not
be deemed outstanding for the purpose of calculating the percentage of Common
Shares that are beneficially owned by any other person. Notwithstanding the
foregoing, if any person is the beneficial owner of at least 15% of the
outstanding Common Shares as a result of any increase in the number of Common
Shares issuable upon the exercise, exchange or conversion of outstanding
securities, or any decrease in the number of outstanding Common Shares resulting
from any stock repurchase plan or self tender offer of the Company, then such
person shall not be deemed a "15% Stockholder" until such person thereafter
acquires beneficial ownership of, in the aggregate, a number of additional
Common Shares equal to 1% or more of the then outstanding Common Shares.
No person who was the beneficial owner of 15% or more of the outstanding
Common Shares on August 14, 2001, shall be deemed a 15% Stockholder for purposes
of the Rights unless and until such person shall have acquired beneficial
ownership of additional Common Shares amounting to 1% or more of the total
Common Shares outstanding, or such person, after having reduced its beneficial
ownership to less than 15% after August 14, 2001, shall thereafter increase its
beneficial ownership to 15% or more of the outstanding Common Shares.
Upon the close of business of the Distribution Date, the Rights shall
separate from the Common Shares, Right certificates shall be issued, and the
Rights shall become exercisable to purchase Preferred Shares as described in
Section 5 below.
3. Issuance of Right Certificates
As soon as practicable following the Distribution Date, separate
certificates representing only Rights shall be mailed to the holders of record
of Common Shares as of the close of business on the Distribution Date, and such
separate Right certificates alone shall represent such Rights from and after the
Distribution Date.
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4. Expiration of Rights
The Rights shall expire on August 14, 2011, unless earlier redeemed or
exchanged, unless the Distribution Date has previously occurred and the Rights
have separated from the Common Shares, in which case the Rights will remain
outstanding for ten years.
5. Exercise of Rights
Unless the Rights have expired or been redeemed or exchanged, they may be
exercised, at the option of the holders, pursuant to paragraphs (a), (b) or (c)
below. No Right may be exercised more than once or pursuant to more than one of
such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by a 15%
Stockholder or that was attached to a Common Share that is subject to an option
beneficially owned by a 15% Stockholder shall be void.
(a) Right to Purchase Preferred Shares.
From and after the close of business on the Distribution Date, each
Right (other than a Right that has become void) shall be exercisable to
purchase one one-hundredth of a share of Series A Junior Participating
Cumulative Preferred Stock, par value $.01 per share, of the Company (the
"Preferred Shares"), at an exercise price of $115 (One Hundred Fifteen
Dollars) (the "Exercise Price"). Prior to the Distribution Date, the
Company may substitute for all or any portion of the Preferred Shares that
would otherwise be issuable upon exercise of the Rights, cash, assets or
other securities having the same aggregate value as such Preferred Shares.
The Preferred Shares are non-redeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock, are
subordinate to any other series of the Company's preferred stock whether
issue before or after the issuance of the Preferred Shares. The Preferred
Shares may not be issued except upon exercise of Rights. The holder of a
Preferred Share is entitled to receive when, as and if declared, the
greater of (i) a preferential annual dividend of $1.00 per Preferred Share
($.01 per one one-hundredth of a Preferred Share); or (ii) cash and non-
cash dividends in an amount equal to 100 times the dividends declared on
each Common Share. In the event of liquidation, the holders of Preferred
Shares shall be entitled to receive a liquidation payment in an amount
equal to the greater of (1) $1.00 per Preferred Share ($.01 per one one-
hundredth of a Preferred Share), plus all accrued and unpaid dividends and
distributions on the Preferred Shares, or (2) an amount equal to 100 times
the aggregate amount to be distributed per Common Share. Each Preferred
Share has 100 votes, voting together with the Common Shares. In the event
of any merger, consolidation or other transaction in which Common Shares
are exchanged, the holder of a Preferred Share shall be entitled to receive
100 times the amount received per Common Share. The rights of the
Preferred Shares as to dividends, voting and liquidation preferences are
protected by antidilution provisions. It is
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anticipated that the value of one one-hundredth of a Preferred Share should
approximate the value of one Common Share.
(b) Right to Purchase Common Shares of the Company (Flip-in-Right).
From and after the close of business on the tenth business day
following the 15% Ownership Date, each Right (other than a Right that has
become void) shall be exercisable to purchase, at the Exercise Price
(initially $115), Common Shares with a market value equal to two times the
Exercise Price. If the Company does not have sufficient Common Shares
available for all Rights to be exercised, the Company shall substitute for
all or any portion of the Common Shares that would otherwise be issuable
upon the exercise of the Rights, cash, assets or other securities having
the same aggregate value as such Common Shares.
(c) Right to Purchase Common Stock of a Successor Corporation (Flip-
Over-Right).
If, on or after the 15% Ownership Date, (i) the Company is acquired in
a merger or other business combination in which the Company is not the
surviving corporation, (ii) the Company is the surviving corporation in a
merger or other business combination in which all or part of the
outstanding Common Shares are changed into or exchanged for stock or assets
of another person or (iii) 50% or more of the Company's consolidated assets
or earning power are sold (other than in transactions in the ordinary
course of business), then each Right (other than a Right that has become
void) shall thereafter be exercisable to purchase, at the Exercise Price
(initially $115), shares of common stock of the surviving corporation or
purchaser, respectively, with an aggregate market value equal to two times
the Exercise Price.
6. Adjustments to Prevent Dilution
The Exercise Price, the number of outstanding Rights and the number of
Preferred Shares or Common Shares issuable upon exercise of the Rights are
subject to adjustment from time to time as set forth in the Rights Agreement in
order to prevent dilution. With certain exceptions, no adjustment in the
Exercise Price shall be required until cumulative adjustments require an
adjustment of at least 1%.
7. Cash Paid Instead of Issuing Fractional Securities
No fractional securities shall be issued upon exercise of a Right (other
than fractions of Preferred Shares that are integral multiples of one one-
hundredth of a Preferred Share and that may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
shall be made based on the market price of such securities on the last trading
date prior to the date of exercise.
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8. Redemption
At any time prior to the earlier of (a) the tenth business day (or such
later day as shall be designated by the Board of Directors) following the date
of the commencement of, or the announcement of an intention to make, a tender
offer or exchange offer, the consummation of which would cause any person to
become a 15% Stockholder, (b) the tenth business day after the 15% Ownership
Date or (c) the first event of the type giving rise to exercise rights under
Section 5(c) above, the Board of Directors may, at its option, direct the
Company to redeem the Rights in whole, but not in part, at a price of $.001 per
Right (the "Redemption Price"), and the Company shall so redeem the Rights.
Immediately upon such action by the Board of Directors (the date of such action
is the "Redemption Date"), the right of the holders of Rights thereafter shall
be to receive the Redemption Price.
9. Exchange
At any time after the 15% Ownership Date and prior to the first date
thereafter upon which a 15% Stockholder shall be the beneficial owner of 50% or
more of the outstanding Common Shares, the Board of Directors may, at its
option, direct the Company to exchange all, but not less than all, of the then
outstanding Rights (other than a Right that has become void) for Common Shares
at an exchange ratio equal to one Common Share per Right on such date (the
"Exchange Ratio"), and the Company shall so exchange the Rights. Immediately
upon such action by the Board of Directors, the right to exercise Rights shall
terminate and the only right of the holders of Rights thereafter shall be to
receive a number of Common Shares equal to the Exchange Ratio.
10. No Stockholder Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, shall have no
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Shares), including, without limitation, the right
to vote or to receive dividends.
11. Amendment of Rights Agreement
The Board of Directors may, from time to time, without the approval of any
holder of Rights, direct the Company and the Rights Agent to supplement or amend
any provision of the Rights Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights, and the Company and
the Rights Agent shall so supplement or amend such provision; provided, however,
that from and after the earliest of (a) the tenth business day (or such later
day as shall be designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person to become a 15%
Stockholder, (b) the 15% Ownership Date, (c) the first event of the type giving
rise to exercise rights under Section
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5(c) above, or (d) the Redemption Date, the Rights Agreement shall not be
supplemented or amended in any manner that would materially and adversely affect
any holder of outstanding Rights other than a 15% Stockholder.
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