EXHIBIT 4.1
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▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
THE BANK OF NEW YORK
Rights Agent
RIGHTS AGREEMENT
Dated as of July 10, 1998
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . . .4
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . . . .4
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . .5
Section 5. Countersignature and Registration. . . . . . . . . . . . . . . .6
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. .7
Section 8. Cancellation of Right Certificates . . . . . . . . . . . . . . .8
Section 9. Status and Availability of Preferred Stock . . . . . . . . . . .8
Section 10. Preferred Stock Record Date. . . . . . . . . . . . . . . . . . .9
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 12. Certificate of Adjustment. . . . . . . . . . . . . . . . . . . 16
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . . 17
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . 17
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . 18
Section 17. Right Certificate Holder Not Deemed a Stockholder. . . . . . . 18
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . . 19
Section 19. Merger or Consolidation or Change of Name of Rights Agent. . . 19
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . 19
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . 21
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . 22
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . 24
Section 26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . 25
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . 25
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . 26
Section 34. Administration . . . . . . . . . . . . . . . . . . . . . . . . 26
EXHIBIT A -- Form of Certificate of Designation of Series H Preferred Stock
EXHIBIT B -- Form of Right Certificate
EXHIBIT C -- Form of Summary of Rights
RIGHTS AGREEMENT
This Rights Agreement dated as of July 10, 1998, between ▇▇▇▇▇▇ &
Noble, Inc., a Delaware corporation (the "Company"), and The Bank of New York
(the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one right (a "Right") for each Common Share of the Company
outstanding at the Close of Business on July 21, 1998 (the "Record Date"),
each Right representing the right to purchase, upon the terms and subject to
the conditions set forth herein, one four-hundredth of a share of the
Company's Series H Preferred Stock, $.001 par value per share (the "Preferred
Stock"), having the rights, powers and preferences set forth in the form of
Certificate of Designation attached as Exhibit A hereto. The Board has
further authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (each capitalized term as hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, without the prior approval
of the Board of Directors of the Company, shall after the date hereof become
the Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or any Subsidiary
of the Company, (iv) any entity holding Common Shares for or pursuant to the
terms of any such plan, (v) any Person (an "Excluded Person") who would as of
the Close of Business on the date hereof be deemed to be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph,
unless and until such Excluded Person, without the prior approval of the
Board of Directors of the Company, shall after the date hereof acquire in one
or more transactions, other than upon the exercise of any options granted
prior to or after the date hereof to such Excluded Person under the Company's
1996 Incentive Plan, 1991 Employee Incentive Plan or any other employee
benefit plan of the Company, additional Common Shares aggregating 5% or more
of the Common Shares of the Company then outstanding, and (vi) any Person who
is an immediate family member of an Excluded Person and any trust for the
benefit of such immediate family member or such Excluded Person, which Person
or trust acquires from such Excluded Person Common Shares (such Common
Shares, "Excluded Shares") and any executor or trustee for the estate of an
Excluded Person, unless and until such Person, trust or executor, together
with all Affiliates and Associates of such Person, trust or executor, shall
become the Beneficial Owner of 15% or more of the Common Shares not including
Excluded Shares. Notwithstanding the foregoing, (i) no Person shall become
an "Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 15% or more of the
Common Shares of the Company then outstanding by reason of share purchases by
the Company and, without the prior approval of the Board of Directors of the
Company, shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an "Acquiring Person," (ii) no Person shall
become an "Acquiring Person" as a result of the acquisition from time to time
of all of his, her or its Common Shares in a merger, consolidation or other
combination of the Company with or into another Person if such merger,
consolidation or other combination was approved by the Board of Directors of
the Company, provided, however, that if after any such acquisition of Common
Shares such Person, without the prior approval of the Board of Directors of
the Company, shall acquire in one or more transactions additional Common
Shares aggregating 5% or more of the Common Shares of the Company then
outstanding and after such acquisition, such Person, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 15% or
more of the Common Shares of the Company then outstanding, then as of the
date of the acquisition of such additional Common Shares aggregating 5% or
more, such Person shall be deemed to be an "Acquiring Person" for any purpose
of this Agreement, (iii) if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph, has become
such inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph, then such Person shall not be deemed to have become an "Acquiring
Person" for any purposes of this Agreement, and (iv) any Excluded Person who
after the Close of Business on the date hereof becomes the beneficial Owner
of less than 15% of the Common Shares of the Company then outstanding shall
cease to be an Excluded Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona
fide public offering of securities), written or otherwise, or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed to be the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made pursuant to,
and in accordance with, the applicable rules and regulations promulgated
under the Exchange Act by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), written or otherwise, for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to section (B) of
the immediately preceding paragraph (ii)) or disposing of any securities of
the Company or with respect to any of the matters relating to the Company
referred to in Item 4 of Schedule 13D under the Exchange Act.
Notwithstanding anything in this definition of "beneficial
ownership" to the contrary, the phrase "then outstanding," when used with
reference to a Person's beneficial ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
"Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $.001 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.
"Distribution Date" shall have the meaning set forth in Section 3
hereof.
"equivalent preferred stock" shall have the meaning set forth in
Section 11(b).
"Exchange Ratio" shall have the meaning set forth in Section 24(a).
"Final Expiration Date" shall mean July 20, 2008.
"Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability partnership, business trust, limited
liability company, unincorporated association or other entity, and shall
include any successor (by merger or otherwise) of such entity.
"preferred stock equivalents" shall have the meaning set forth in
section 11(a)(iii)(B)(3).
"Purchase Price" shall have the meaning set forth in Section 7(b).
"Redemption Date" shall mean the date on which the Rights are
redeemed as provided in Section 23 hereof.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form of Exhibit B hereto.
"Shares Acquisition Date" shall mean the earlier of the date of (i)
the public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such or (ii) the public disclosure of facts by
the Company or an Acquiring Person indicating that an Acquiring Person has
become such.
"Spread" shall have the meaning set forth in Section
11(a)(iii)(A)(2) hereof.
"Subsidiary" of any Person shall mean any Person of which a
majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Summary of Rights" shall mean the Summary of Rights to Purchase
Shares of Preferred Stock in substantially the form of Exhibit C hereto.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Trigger Date Value" shall have the meaning set forth in Section
11(a)(iii)(A)(1) hereof.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable upon ten (10) days' prior written
notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such Co-Rights Agent. In the event the Company appoints one or more Co-
Rights Agents, the respective duties of the Rights Agents and any Co-Rights
Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Shares Acquisition Date or
(ii) the tenth Business Day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of any Person (other than any of the
Persons referred to in the preceding parenthetical) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming
the Beneficial Owner of Common Shares aggregating 15% or more of the then
outstanding Common Shares (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the Rights (and the right to receive
Right Certificates) will be transferable only in connection with the transfer
of Common Shares. The Company shall give the Rights Agent prompt written
notice of the Distribution Date. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the Close
of Business on the Distribution Date, at the address of such holder shown on
the records of the Company, a Right Certificate evidencing one Right for each
Common Share so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the Rights will
be evidenced by such certificates registered in the names of the holders
thereof together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date, the surrender for transfer of any certificate
for Common Shares outstanding on the Record Date shall also constitute the
transfer of the Rights associated with the Common Shares evidenced thereby.
Upon the request of the holder of any Common Shares or, after the
Distribution Date, the holder of any Right, the Company shall, at its
expense, provide a copy of the Summary of Rights.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) after the Record Date (or as soon as is
reasonably practicable), but prior to the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date, shall have impressed,
printed, stamped, written or otherwise affixed onto them the following
legend:
This certificate also evidences and entitles the holder
hereof to certain rights (the "Rights") as set forth in
the Rights Agreement between ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. and The
Bank of New York, dated as of July 10, 1998 (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference. A copy of the Rights Agreement is
on file at the principal executive offices of ▇▇▇▇▇▇ &
Noble, Inc. Under certain circumstances set forth in the
Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by
this certificate. ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request
therefor. As described in Section 11(a)(ii) of the
Rights Agreement, Rights beneficially owned by any Person
who becomes an Acquiring Person (as defined in the Rights
Agreement) and certain other Persons shall become null
and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented
by certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) 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 on
which the Rights may from time to time be listed, or to conform to usage.
The Right Certificates shall be in machine printable format. Subject to the
other provisions of this Agreement, the Right Certificates shall show the
date of countersignature and shall entitle the holders thereof to purchase
such number of one four-hundredths of a share of Preferred Stock as shall be
set forth therein at the Purchase Price, but the number of such shares and
the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman, any
of its Vice Chairmen, its Chief Executive Officer, its Chief Operating
Officer, its President, its Chief Financial Officer, any of its Vice
Presidents or its Treasurer, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or any Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent 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, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Right Certificates had
not ceased to be such officer of the Company; and any Right Certificate may
be signed on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its designated office, books for registration of the
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date or the Final Expiration Date,
any Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of one four-hundredths of a share of Preferred Stock as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
designated office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment by the holders of Right Certificates of a sum sufficient for
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate, if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate (other
than a holder whose Rights have become void pursuant to Section 11(a)(ii)
hereof or have been exchanged pursuant to Section 24 hereof), may exercise
the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at its designated office, together with payment of the Purchase Price
for each one four-hundredth of a share of Preferred Stock as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the Redemption Date, or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The purchase price for each one four-hundredth of a share
of Preferred Stock to be purchased upon the exercise of a Right shall
initially be $225 (the "Purchase Price"), shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and related
certification duly executed, accompanied by payment of the Purchase Price for
the number of shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by cash, certified check, cashier's check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the shares
of Preferred Stock certificates for the number of shares of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) requisition from any
depositary agent for the shares of Preferred Stock depositary receipts
representing such number of one four-hundredth of a share of Preferred Stock
as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
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 shares of Preferred Stock in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, deliver
such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate
following the form of election to purchase set forth on the reverse side of
the Right Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation 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 any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other 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.
Section 9. Status and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and non-assessable
shares.
(b) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or depositary
receipts for the shares of Preferred Stock in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts
for shares of Preferred Stock upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established
to the Company's reasonable satisfaction that no such tax is due.
(c) The Company covenants and agrees that it will cause to be
reserved and kept available, out of its authorized and unissued shares of
Preferred Stock, or any authorized and issued shares of Preferred Stock held
in its treasury, the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7 hereof.
(d) So long as the shares of Preferred Stock issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares of Preferred
Stock reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(e) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
an event set forth in Section 11(a)(ii) on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement under the
Securities Act of 1933 (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable
for such securities, and (B) the Final Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(e), the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall
make a public announcement, and shall deliver to the Rights Agent a
statement, stating that the exercisability of the Rights has been temporarily
suspended. At such time as the suspension is no longer in effect, the
Company shall make another public announcement, and shall deliver to the
Rights Agent a statement so stating. In addition, if the Company shall
determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective. Absent written
notification from the Company to the Rights Agent to the contrary, the Rights
Agent may assume that any Right exercised is permitted to be exercised under
applicable law and, except as otherwise provided hereunder in the case of the
Rights Agent's gross negligence, bad faith or willful misconduct, the Rights
Agent shall have no liability for acting in reliance upon such assumption.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for shares of Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the shares of Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of shares of Preferred Stock for which the
Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of shares of Preferred
Stock covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares or fractional units of shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares or (D) issue any shares of
its capital stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number of units of one
four-hundredths of a share of Preferred Stock and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number of units of one four-hundredths of a
share of Preferred Stock and the number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an
event occurs which would require an adjustment under both Section 11(a)(i)
and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to the following paragraph of this
subparagraph (ii) and to Section 24 of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, shall become an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price in accordance with the terms of this Agreement, such number of one
four-hundredths of a share of Preferred Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one four-hundredths of a share of Preferred Stock for which a Right
is then exercisable and dividing that product by (y) 50% of the then current
market price per one four-hundredth of a share of Preferred Stock (determined
pursuant to Section 11(d) hereof) on the date such Person became an Acquiring
Person. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the date any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, any Rights that
are or were acquired or beneficially owned by such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void and any holder
of such Rights shall thereafter have no right to exercise such Rights under
any provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned by an
Acquiring Person (or any Associate or Affiliate thereof) whose Rights would
be void pursuant to the preceding sentence; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person (or
any Associate or Affiliate thereof) whose Rights would be void pursuant to
the preceding sentence or to any nominee of such Acquiring Person, Associate
or Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person (or any Associate or Affiliate thereof) whose
Rights would be void pursuant to the preceding sentence shall be canceled.
(iii) In the event that the number of shares of
Preferred Stock which are authorized by the Company's certificate of
incorporation and not outstanding or subscribed for, or reserved or otherwise
committed for issuance for purposes other than upon exercise of the Rights,
are not sufficient to permit the holder of each Right to purchase the number
of shares of Preferred Stock to which he would be entitled upon the exercise
in full of the Rights in accordance with the foregoing subparagraph (ii) of
paragraph (a) of this Section 11, or should the Board of Directors so elect,
the Company shall: (A) determine the excess of (1) the value of the Preferred
Stock issuable upon the exercise of a Right (calculated as provided in the
last sentence of this subparagraph (iii)) pursuant to Section 11(a)(ii)
hereof (the "Trigger Date Value") over (2) the Purchase Price (such excess,
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such shares of Preferred Stock, upon payment of the applicable
Purchase Price, any one or more of the following having an aggregate value
determined by the Board of Directors to be equal to the Trigger Date Value:
(1) cash, (2) Common Shares or other equity securities of the Company
(including, without limitation, shares or units of shares of preferred stock
which the Board of Directors of the Company has determined to have the same
value as the Preferred Stock (such shares of preferred stock, "preferred
stock equivalents")), (3) debt securities of the Company, or (4) other
assets; provided, however, if the Company shall not have made adequate
provision to deliver the Trigger Date Value pursuant to clause (B) above
within thirty (30) days following the first occurrence of an event triggering
the rights to purchase shares of Preferred Stock described in Section
11(a)(ii) (the "Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Preferred Stock (to the extent
available) and then, if necessary, cash, which shares and cash have an
aggregate value equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient
additional shares of Preferred Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as it
may be extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii) , the Company (x) shall provide, subject
to Section 7(e) hereof and the last paragraph of Section 11(a)(ii) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall make a public announcement, and shall
deliver to the Rights Agent a statement, stating that the exercisability of
the Rights has been temporarily suspended. At such time as the suspension is
no longer in effect, the Company shall make another public announcement, and
deliver to the Rights Agent a statement, so stating. For purposes of this
Section 11(a)(iii), the Trigger Date Value of the Preferred Stock shall be
the current market price (as determined pursuant to Section 11(d) hereof) per
share of the Preferred Stock on the Trigger Date and the value of any
preferred stock equivalent shall be deemed to have the same value as the
Preferred Stock on such date. The Board of Directors may, but shall not be
required to, establish procedures to allocate the right to receive Preferred
Stock, equivalent preferred stock, Common Shares and cash upon the exercise
of the Rights among the holders of the Rights.
(b) If the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock or
equivalent preferred stock at a price per share of Preferred Stock or per
share of equivalent preferred stock (or having a conversion price per share,
if a security convertible into Preferred Stock or equivalent preferred stock)
less than the then current market price per share of the Preferred Stock (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be adjusted by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of
a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current market price per share of the
Preferred Stock (as determined in Section 11(d)) on such record date, less
the fair market value (as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock and the denominator of which shall
be such current market price per share of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
the "current market price" of any security (a "Security") for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current market price per
share of the Security is determined during a period following the
announcement by the issuer of such security of (A) a dividend or distribution
on such Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the current market price per share shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Security is
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. If on any such date no
market maker is making a market in the Security, the fair value of such
shares on such date as determined reasonably and with good faith by the Board
of Directors of the Company shall be used and shall be binding on the Rights
Agent. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day. If the Security is not publicly listed or traded, "current market
price" shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent.
(ii) For the purpose of any computation hereunder,
the "current market price" of the Preferred Stock shall be determined in
accordance with the method set forth in Section 11(d)(i) (other than the last
sentence thereof). If the current market price per share (or one four-
hundredth of a share) of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 400 (as such number may be adjusted for such
events as stock splits, stock dividends and recapitalizations with respect to
the Preferred Stock occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Shares (as determined
pursuant to clause (i) above), and the "current market price" per one four-
hundredth of a share of Preferred Stock shall be equal to the current market
price per share of the Common Shares (as appropriately adjusted). If neither
the Common Shares or Preferred Stock is publicly held or so listed or traded,
"current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest one millionth of a share of Preferred Stock, or one
ten-thousandth of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than three years from the
date of the transaction which requires such adjustment.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, the number of such other shares so receivable upon exercise
of any Right shall thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the shares contained in Section 11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10 and 13 with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one four-hundredths of a share of Preferred Stock (calculated
to the nearest one millionth) obtained by (i) multiplying (x) the number of
one four-hundredths of a share of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights in
substitution for any adjustment in the number of shares of Preferred Stock
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 four-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
distributed, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been distributed, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates to be so
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one four-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price and the
number of shares of Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the Preferred Stock
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and non-assessable
shares of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such record
date of the shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the shares
of Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
to such holder a due ▇▇▇▇ or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any (i) consolidation or subdivision
of the Preferred Stock, (ii) issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of Preferred Stock or securities which by their terms are
convertible into or exchangeable for Preferred Stock, (iv) dividends on
Preferred Stock payable in Preferred Stock or (v) issuance of any rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made
by the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
date of this Agreement and prior to the Distribution Date (i) declare or pay
a dividend on the outstanding Common Shares, (ii) subdivide the outstanding
Common Shares, (iii) combine or consolidate the outstanding Common Shares
into a smaller number of shares, or (iv) issue any shares of its capital
stock in a reclassification of the outstanding Common Shares, then in any
such case, the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights
thereafter associated with each Common Share following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the numerator
of which shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall be
the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or
such a subdivision, consolidation or reclassification is effected.
(o) Notwithstanding any other provision of this Agreement, no
adjustment to the Purchase Price, the number of shares (or fractions of a
share) of Preferred Stock, Common Shares or other securities for which a
Right is exercisable or the number of Rights outstanding or any similar
adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of Rights would have
had absent such adjustment, including, without limitation, the benefits under
Section 11(a)(ii) and Section 13, unless the terms of this Agreement are
amended so as to preserve such benefits.
(p) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the rights represented by the Rights
under this Agreement, including, without limitation, the rights represented
by Section 13.
Section 12. Certificate of Adjustment. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Preferred Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained
and shall not be deemed to have knowledge of such adjustment unless and until
it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event that, directly or indirectly, (a) the Company
shall consolidate with, or merge with and into, any other Person, (b) any
Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of 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 other
Person (or the Company) or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person other than the
Company or one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current
Purchase Price in accordance with the terms of this Agreement and in lieu of
such number of shares of Preferred Stock for which a Right is then
exercisable, such number of Common Shares of such other Person (including the
Company as successor thereto or as the surviving corporation) as shall equal
the result obtained by (A) multiplying the then current Purchase Price by the
number of one four-hundredths of a share of Preferred Stock for which a Right
is then exercisable and dividing that product by (B) 50% of the then current
market price per share of the Common Shares of such other Person (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise
of the Rights. The Company covenants and agrees that it shall not consummate
any such consolidation, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date
as determined in good faith by the Board of Directors of the Company shall be
used and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples
of one four-hundredth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
four-hundredth of a share of Preferred Stock). In lieu of fractional shares
of Preferred Stock that are not integral multiples of one four-hundredth of a
share of Preferred Stock, the Company shall pay to each registered holder of
Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
one four-hundredth of a share of Preferred Stock. For the purposes of this
Section 14(b), the current market value of one four-hundredth of a share of
Preferred Stock shall be one four-hundredth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives any right to receive fractional Rights or fractional shares
upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares) may,
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), in
his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement. Holders of Rights
shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the provisions of
this Agreement in which they successfully prosecute their claims.
Section 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books maintained by the Rights Agent if
surrendered at the designated office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer with a completed form of
certification;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Shares certificate made by anyone other than the 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; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent such compensation as shall be agreed to in writing
between the Company and the Rights Agent for all services rendered by it
hereunder and its reasonable expenses incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs and
expenses (including reasonable attorneys' fees and expenses) of defending
against any claim of liability arising therefrom. The indemnity provided for
in this Section 18 shall survive the expiration of the Rights and the
termination of this Agreement.
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 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, and verified or
acknowledged, where necessary.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to all
or substantially all of the stock transfer or corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement
any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound, and no
implied duties or obligations shall be read into this Agreement against the
Rights Agent:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter 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, any Vice Chairman, the Chief Executive Officer, the
Chief Operating Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer or the 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 Rights Agreement
or in the Right Certificates (except its countersignatures thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Rights Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) or the ascertaining
of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Rights
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 Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to whether
any Preferred Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable; nor shall the Rights Agent be responsible for
the legality of the terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will inform the Rights Agent
promptly upon its determination that a Person has become an Acquiring Person
and the Rights Agent will not be responsible for determining the status of a
Person as an Acquiring Person prior to such notification, except as such
status may be indicated in the Assignment or Election to Purchase of a Rights
Certificate. The Company also 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, any Vice Chairman, the Chief Executive Officer,
the Chief Operating Officer, the President, the Chief Financial Officer, any
Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in good
faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. Any application by the Rights
Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted
by the Rights Agent with respect to its duties or obligations under this
Rights Agreement and the date on and/or after which such action shall be
taken or omitted and the Rights Agent shall not be liable for any action
taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be
less than three business days after the date any such officer actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking or omitting any such
action, the Rights Agent has received written instructions in response to
such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) The Company agrees to give the Rights Agent prompt
written notice of any event or ownership known to the Company which would
prohibit the exercise or transfer of the Right Certificates.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Stock by registered or certified mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the Rights Agent
or the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (i) a corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York, in good standing, having an
office in the State of New York, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million dollars or (ii) a subsidiary of a corporation described in
clause (i) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as
if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares and Preferred Stock, and,
if such appointment occurs after the Distribution Date, mail a notice thereof
in writing to the registered holders of the Right Certificates, at the
Company's expense. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to such time as any Person becomes an Acquiring Person,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be made effective
at such time, on such basis and subject to such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23, and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price. The
Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within 10 days after such action
of the Board of Directors ordering the redemption of the Rights pursuant to
paragraph (a), the Company shall mail a notice of redemption to the Rights
Agent and all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. If the payment of the Redemption Price is not included with such
notice, each such notice 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 redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof, or other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii)
hereof) for shares of Preferred Stock or Common Shares at an exchange ratio
of one four-hundredth of a share of Preferred Stock or one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of a majority of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of
Preferred Stock or Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
the Rights Agent and all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or. not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of Preferred Stock
or Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute preferred stock equivalents for shares of
Preferred Stock exchangeable for Rights, at the initial rate of one preferred
stock equivalent for each share of Preferred Stock, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof.
(d) In the event that there shall not be sufficient shares of
Preferred Stock or preferred stock equivalents authorized by the Company's
certificate of incorporation and not outstanding or subscribed for, or
reserved or otherwise committed for issuance for purposes other than upon
exercise of Rights, to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as
may be necessary to authorize additional shares of Preferred Stock or
preferred stock equivalents for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Preferred Stock or to distribute certificates which evidence
fractional shares of Preferred Stock, other than as provided in Section 14(b)
of this Agreement. In lieu of such fractional shares of Preferred Stock, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Preferred Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value per share of a whole share of Preferred Stock. For the purposes of
this paragraph (e), the current per share market value of a whole share of
Preferred Stock shall be the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall after the Distribution Date
propose (i) to pay any dividend payable in stock of any class to the holders
of its Preferred Stock or to make any other distribution to the holders of
its Preferred Stock (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), (iv) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to declare
or pay any dividend on the Preferred Stock payable in shares of Preferred
Stock or to effect a subdivision, combination or consolidation of the
Preferred Stock (by reclassification or otherwise than by payment of
dividends in shares of Preferred Stock), then, in each such case, the Company
shall give to the Rights Agent and each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by
the holders of the Preferred Stock, whichever shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
the Rights Agent and each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the 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:
▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Director of Investor Relations
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) as
follows:
The Bank of New York
Shareholder Relations
Department 11E
P.O. Box ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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. The Company may from time
to time, and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any change to or delete any provision
hereof or to adopt any other provisions with respect to the Rights which the
Company may deem necessary or desirable. Any such supplement or amendment
will be evidenced by a writing signed by the Company and the Rights Agent;
provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended or supplemented in any
manner which would adversely affect the interests of the holders of Rights
(other than an Acquiring Person and its Affiliates and Associates). Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment, and such supplement or amendment shall be effective regardless of
whether or when executed by the Rights Agent. Notwithstanding any other
provision hereof, the Rights Agent's consent must be obtained regarding any
supplement or amendment pursuant to this Section 27 which alters the Rights
Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State, provided, however, that
the rights, protections and immunities of the Rights Agent shall be governed
by and construed in accordance with the laws of the State of New York.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 34. Administration. The Board of Directors of the Company
shall have the exclusive power and authority to (i) administer and interpret
the provisions of this Agreement, (ii) exercise all rights and powers
specifically granted to the Board of Directors or the Company or as may be
deemed necessary or advisable in the administration of this Agreement, and
(iii) make all determinations deemed necessary or advisable for the
administration of this Agreement, including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement
and whether any proposed amendment adversely affects the interests of the
holders of Right Certificates. All such actions, calculations,
determinations and interpretations which are done or made by the Board of
Directors in good faith shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties
and shall not subject the Board of Directors to any liability to the holders
of the Rights or holders of Common Shares.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the day and year first above written.
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:__________________________________
Name:
Title:
THE BANK OF NEW YORK, as Rights Agent
By:__________________________________
Name:
Title:
EXHIBIT A
CERTIFICATE OF DESIGNATION OF
PREFERENCES AND RIGHTS OF
PREFERRED STOCK, SERIES H OF
▇▇▇▇▇▇ & NOBLE, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Company"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the
Company, as amended, the Board of Directors as of July 10, 1998 adopted the
following resolution, creating a series of Preferred Stock designated as
Preferred Stock, Series H:
RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Company (the "Board of Directors")
in accordance with the provisions of its Amended and Restated
Certificate of Incorporation, as amended, a series of
Preferred Stock of the Company be and it hereby is created,
and that the designation and amount thereof and the voting
powers, preferences and relative, optional and other special
rights of the shares of such series, and the qualifications,
limitations or restrictions thereof, are as follows:
Section 1. Designation, Par Value and Amount. The shares of such
series shall be designated as "Series H Preferred" (hereinafter referred to
as "Series H Preferred"), the shares of such series shall be with par value
of $.001 per share, and the number of shares constituting such series shall
be 250,000; provided, however, that, if more than a total of 250,000 shares
of Series H Preferred shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of July 10, 1998,
between the Company and The Bank of New York, as Rights Agent (as amended
from time to time) (the "Rights Agreement"), the Board of Directors, pursuant
to the General Corporation Law of the State of Delaware, shall direct by
resolution or resolutions that a certificate be properly executed,
acknowledged and filed providing for the total number of shares of Series H
Preferred authorized to be issued to be increased (to the extent that the
Certificate of Incorporation then permits) to the largest number of whole
shares (rounded up to the nearest whole number) issuable upon exercise of the
Rights.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series H Preferred with respect to dividends, the holders of shares
of Series H Preferred, in preference to the holders of shares of Common
Stock, par value $.001 per share, of the Corporation ("Common Stock") and any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the 30th day of each of April, July,
October and January in each year (or, in each case, if not a date on which
the Corporation is open for business, the next succeeding business day) or
such earlier date in any such month on which dividends on the Common Stock
are payable (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 H Preferred,
in an amount per share (rounded to the nearest cent) equal to the greater of
(a) $2.00 or (b) subject to the provision for adjustment hereinafter set
forth, 400 times the aggregate per share amount of all cash dividends, and
400 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 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 H Preferred. In the event the
Corporation shall at any time after July 10, 1998 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series H Preferred were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series H Preferred as provided in paragraph (a) above immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $2.00 per share on
the Series H Preferred 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 H Preferred from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series H Preferred,
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 H Preferred
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series H Preferred 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 H Preferred entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series H
Preferred shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series H Preferred shall entitle the holder thereof to 400
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of
Series H Preferred were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series H Preferred 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) (i) If at any time dividends on any Series H Preferred shall
be in arrears in an amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall ▇▇▇▇ the beginning of a period (herein
called a "default period") which shall extend until such time when all
accrued and unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series H Preferred
then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock (including holders
of the Series H Preferred) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series H Preferred may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(c) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the holders of ten
percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two
(2) Directors. If the number which may be so elected at any special meeting
does not amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised their right to
elect Directors in any default period and during the continuance of such
period, the number of Directors shall not be increased or decreased except by
vote of the holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with the
Series H Preferred.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the Chairman of
the Board, any Vice Chairman, the Chief Executive Officer, the President, the
Chief Operating Officer, any Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this paragraph
(c)(iii) shall be given to each holder of record of Preferred Stock by
mailing a copy of such notice to him at his last address as the same appears
on the books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request
or in default of the calling of such meeting within 60 days after such order
or request, such meeting may be called on similar notice by any stockholder
or stockholders owning in the aggregate not less than ten percent (10%) of
the total number of shares of Preferred Stock outstanding. Notwithstanding
the provisions of this paragraph (C)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding the date fixed
for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (c)(ii) of this Section 3) be
filled by vote of a majority of the remaining Directors theretofore elected
by the holders of the class of stock which elected the Director whose office
shall have become vacant. References in this paragraph (c) to Directors
elected by the holders of a particular class of stock shall include Directors
elected by such Directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the Certificate of
Incorporation or By-laws irrespective of any increase made pursuant to the
provisions of paragraph (c)(ii) of this Section 3 (such number being subject,
however to change thereafter in any manner provided by law or in the
Certificate of Incorporation or By-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.
(d) Except as set forth herein, holders of Series H Preferred
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series H Preferred as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series H Preferred
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series H Preferred;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series H Preferred, except dividends paid ratably on the Series
H Preferred 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 on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series H Preferred, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series H Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series H Preferred, or any shares of stock ranking on a
parity with the Series H Preferred, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
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 H Preferred
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 and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up. (a) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series H Preferred unless, prior thereto, the holders of
shares of Series H Preferred shall have received $1,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series H
Liquidation Preference"). Following the payment of the full amount of the
Series H Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series H Preferred unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained by dividing (i) the
Series H Liquidation Preference by (ii) 400 (as appropriately adjusted as set
forth in subparagraph (c) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series H Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series H Preferred and
Common Stock, respectively, holders of Series H Preferred and holders of
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(b) In the event there are not sufficient assets available to
permit payment in full of the Series H Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series H Preferred, then such remaining assets
shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series H 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 400 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series H Preferred 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 are
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series H Preferred
shall not be redeemable.
Section 9. Ranking. The Series H Preferred shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series H Preferred so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series H Preferred, voting separately as a class.
Section 11. Fractional Shares. Series H Preferred may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holders fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series H Preferred.
IN WITNESS WHEREOF, ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. has caused this
Certificate of Designation to be duly executed by its duly authorized officer
and attested by its Secretary this 10th day of July, 1998.
▇▇▇▇▇▇ & NOBLE, INC.
By:
___________________________
Name:
Title:
ATTEST:
_________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R- _____________ Rights
NOT EXERCISABLE AFTER JULY 20, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
This certifies that_______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of July 10, 1998 (the "Rights Agreement"),
between ▇▇▇▇▇▇ & Noble, Inc., a Delaware corporation (the "Company"), and The
Bank of New York (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on July 20, 2008 at
the designated office of the Rights Agent, or at the office of its successor
as Rights Agent, one four-hundredth of a fully paid, non-assessable share of
Series H Preferred Stock, par value $.001 per share (the "Preferred Stock"),
of the Company, at a purchase price of $225 per one four-hundredth of a share
of Preferred Stock (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the certification and the Form of Election to
Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of July 21, 1998, based on
the Preferred Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of shares of Preferred Stock
which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon the
happening of certain events.
From and after the occurrence of any of the events described in Section
11(a)(ii) of the Rights Agreement, if the Rights evidenced by this Right
Certificate are or were at any time on or after the earlier of (x) the Shares
Acquisition Date (as such term is defined in the Rights Agreement) and (y)
the Distribution Date (as such term is defined in the Rights Agreement)
beneficially owned by an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall become null and void, and any holder of such Rights shall
thereafter have no right to exercise such Rights.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
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
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $. 01 per Right or (ii) may be exchanged in whole or in part for Preferred
Stock.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one four-hundredth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this 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 _______, 1998.
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
Attest:
________________________________ By:___________________________
Name: Name:
Title: Title:
Countersigned:
THE BANK OF NEW YORK
Rights Agent
By:_____________________________
Authorized Signatory
Date of Countersignature:
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________ hereby sells,
assigns and transfers unto __________________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:_____________________, _____
_____________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Rights Agent, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Rights Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
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The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
________________________________________
Signature
Form of Reverse Side of Right Certificate--continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To _____________________________:
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to
purchase the shares of Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares of Preferred Stock be
issued in the name of:
Please insert social security
or other identifying number
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
_____________________________________________________________________________
Dated: _____________, ____
_________________________________________
Signature
Form of Reverse Side of Right Certificate--continued
Signature Guaranteed:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Rights Agent, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Rights Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
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The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
_________________________________________
Signature
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NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
EXHIBIT C
SUMMARY OF RIGHTS
TO PURCHASE PREFERRED STOCK
On July 10, 1998, the Board of Directors of ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (the
"Company") declared a dividend of one right (a "Right") for each outstanding
share of Common Stock, par value $.001 per share (the "Common Shares"), of
the Company. The dividend is payable on July 21, 1998 (the "Record Date") to
the stockholders of record on that date. The Board of Directors has further
authorized and directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and the earliest
of the Distribution Date (as defined below), the Final Expiration Date (as
defined below) and the date the Rights are redeemed. Each Right entitles the
registered holder to purchase from the Company one four-hundredth of a share
of a series of preferred stock, designated as Series H Preferred Stock, par
value $.001 per share (the "Preferred Stock") at a price of $225 per one
four-hundredth of a share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and The Bank of New York, as Rights
Agent (the "Rights Agent").
Until the earlier to occur of (i) a public announcement that, without
the prior consent of the Board of Directors of the Company, a person or group
of affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding Common Shares (or an
additional 5% or more of the outstanding Common Shares in the case of any
Acquiring Person who beneficially owns 15% or more of the outstanding Common
Shares as of July 10, 1998) or (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to such time as
any person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on July 20, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case, as described below.
The Purchase Price payable, and the number of one four-hundredth shares
of Preferred Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into Preferred
Stock with a conversion price, less than the then current market price of the
Preferred Stock or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights associated with each Common Share and
the voting and economic rights of each one four-hundredth of a share of
Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
In the event that any person becomes an Acquiring Person, each holder
of a Right, other than Rights beneficially owned by the Acquiring Person and
its Affiliates and Associates (which will thereafter be null and void), will
thereafter have the right to receive upon exercise of the Right and payment
of then current Purchase Price that number of one four-hundredths of a share
of Preferred Stock having a market value of two times that Purchase Price.
In the event that, after the Distribution Date, the Company is acquired
in a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision will be made
so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price of the Right,
that number of shares of common stock of the acquiring company which at the
time of such transaction will have a market value of two times that Purchase
Price.
If the Company does not have sufficient shares of Preferred Stock to
satisfy such obligation to issue Preferred Stock, or if the Board of
Directors so elects, the Company shall deliver upon payment of the Purchase
Price of a Right an amount of cash or securities equivalent in value to the
shares of Preferred Stock issuable upon exercise of a Right; provided that,
if the Company fails to meet such obligation within 30 days following the
later of (x) the first occurrence of an event triggering the right to
purchase Common Shares and (y) the date on which the Company's right to
redeem the Rights expires, the Company must deliver, upon exercise of a Right
but without requiring payment of the Purchase Price then in effect, shares of
Preferred Stock (to the extent available) and cash equal in value to the
difference between the value of the shares of Preferred Stock otherwise
issuable upon the exercise of a Right and the Purchase Price then in effect.
The Board of Directors may extend the 30-day period described above for up to
an additional 60 days to permit the taking of action that may be necessary to
authorize sufficient additional shares of Preferred Stock to permit the
issuance of Preferred Stock upon the exercise in full of the Rights.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Common Shares and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person or group
which have become void), in whole or in part, at an exchange ratio of one
four-hundredth of a share of Preferred Stock or one Common Share per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one four-hundredth of a
share of Preferred Stock) and in lieu thereof, an adjustment in cash will be
made, based on the market price of the Preferred Stock on the last trading
day prior to the date of exercise.
At any time prior to the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 15% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors
in its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
The Preferred Stock purchasable upon the exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company
may issue (unless otherwise provided in the terms of such stock). Each share
of Preferred Stock will be entitled to a preferred dividend equal to the
greater of (a) $2.00 or (b) 400 times any dividend declared on the Common
Shares. In the event of liquidation, the holders of Preferred Stock will
receive a preferred liquidation payment equal to $1,000 per share of
Preferred Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon. Each share of Preferred Stock will have 400 votes,
voting together with the Common Shares. Notwithstanding the immediately
preceding sentence, in the event that dividends on the Preferred Stock shall
be in arrears in an amount equal to six quarterly dividends thereon, holders
of the Preferred Stock shall have the right, voting as a class, to elect two
of the Company's Directors. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each share of
Preferred Stock will be entitled to receive 400 times the amount and type of
consideration received per Common Share. The rights of the Preferred Stock
as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
Fractional shares of Preferred Stock in integral multiples of one four-
hundredth of a share of Preferred Stock will be issuable. In lieu of
fractional shares other than fractions that are multiples of one four-
hundredth of a share, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from
and after such time as any person becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights
(other than the Acquiring Person and its Affiliates and Associates).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.