EXECUTION
COPY
AMERICAN FREIGHTWAYS CORPORATION
and
WACHOVIA BANK, N.A.
as Rights Agent
RIGHTS AGREEMENT
August 26, 1998
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 26, 1998 (the
"Agreement"), between American Freightways Corporation, an Arkansas
corporation (the "Company"), and Wachovia Bank, N.A. (the "Rights
Agent").
BACKGROUND
On August 17, 1998 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of common stock,
par value $.01 per share, of the Company (the "Common Stock")
outstanding at the Close of Business on August 31, 1998 (the
"Record Date"), and has authorized the issuance of one Right (as
such number may be adjusted pursuant to the provisions of Section
11(p)) for each share of Common Stock of the Company issued between
the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date, each Right initially
representing the right to purchase one share of Common Stock of the
Company upon the terms and subject to the conditions set forth
below (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth in this Agreement, the parties hereby
agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Acquiring Person" means any Person that, together with
all Affiliates and Associates of such Person, is the Beneficial
Owner of 15% or more of the shares of Common Stock then
outstanding, but does not include (i) the Company; (ii) any
Subsidiary of the Company; (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company; (iv) any Person
organized, appointed or established by the Company for or pursuant
to the terms of any such plan; (v) any person that becomes an
Acquiring Person pursuant to a Permitted Transaction; (vi) any
Person that has become an Acquiring Person inadvertently and,
within five Business Days of being requested by the Company to
advise it regarding the same, certifies to the Company that such
Person acquired beneficial ownership of shares of Common Stock in
excess of 14.9% inadvertently or without knowledge of the terms of
the Rights and such certification is accepted as true by a
Requisite Majority acting in good faith, and such Person divests as
promptly as practicable a sufficient amount of Common Stock so that
such Person would no longer hold in excess of 14.9% of the Common
Stock then outstanding; (vii) any Person that becomes an Acquiring
Person solely as a result of a reduction in the number of
outstanding shares of Common Stock in a transaction that is
approved by a Requisite Majority, provided that such Person will
immediately be an Acquiring Person in the event such Person
thereafter acquires any additional shares of Common Stock (other
than as a result of a stock split or stock dividend) while the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding; and (viii) any Person who is the Beneficial Owner of
15% or more of the
shares of Common Stock outstanding on the Rights Dividend Declaration
Date and any transferee of any of the shares of Common Stock
Beneficially Owned by such Person.
(c) "Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule l2b-2 of the General Rules and
Regulations under the Exchange Act and in effect on the date of
this Agreement.
(d) A Person will be deemed the "Beneficial Owner" of, and
will be deemed to "beneficially own," any securities that:
(i) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the occurrence of certain events) pursuant
to any agreement, arrangement, or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided,
however, that a Person will not be deemed the "Beneficial Owner"
of, or to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a
Distribution Date or (C) securities issuable upon exercise of
Rights, which were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant
to Section 3(a) or Section 22 (the "Original Rights") or pursuant
to Section 11(1) in connection with an adjustment made with respect
to any Original Rights;
(ii) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant
to Rule l3d-3 of the General Rules and Regulations under the
Exchange Act), including pursuant to any agreement, arrangement, or
understanding, whether or not in writing; provided, however, that a
Person will not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this Section 1(d)(ii) as a
result of an agreement, arrangement, or understanding to vote such
security if such agreement, arrangement, or understanding: (1)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate of such Person)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement, or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso in Section l(d)(ii)), or disposing of any voting securities
of the Company;
provided, however, that nothing in this Section 1(d) will
cause a Person engaged in business as an underwriter of securities
to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good
faith in a bona fide firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Business Day" means any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
Arkansas are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date will mean
5:00 p.m., Harrison, Arkansas time, on such date; provided,
however, that if such date is not a Business Day it will mean
5:00 p.m., Harrison, Arkansas time, on the next succeeding Business
Day.
(g) "Common Stock" means the common stock, par value $.01 per
share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company will mean the
capital stock of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control
or direct the management, of such Person.
(h) "Continuing Director" means any member of the Board of
Directors of the Company who (i) is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person and (ii) was either a
member of the Board of Directors of the Company on the date of this
Agreement or who subsequently became a director of the Company and
whose initial election or initial nomination for election was
approved by a majority of the Continuing Directors then on the
Board of Directors of the Company.
(i) "Distribution Date" means the Close of Business on the
tenth Business Day (unless extended by vote of a Requisite
Majority) after the earlier to occur of (i) the Stock Acquisition
Date or (ii) the date any Person commences or publicly announces an
intention to commence a tender offer or exchange offer for the
Common Stock which would result in, upon the consummation of such
offer, the Person making such offer, together with all of its
Affiliates and Associates, being the Beneficial Owner of 15% or
more of the Common Stock then outstanding (including any such date
that is after the date of this Agreement and prior to the issuance
of the Rights); provided, however, that if the tender offer or
exchange offer that gave rise to the Distribution Date is
cancelled, terminated or otherwise withdrawn within ten Business
Days of its announcement, such offer shall be deemed never to have
been made and no Distribution Date shall occur with respect
thereto.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(k) "NASDAQ" means the National Association of Securities
Dealers Automated Quotation System.
(l) "Permitted Transaction" means a stock acquisition or a
tender or exchange offer pursuant to a definitive agreement by
which a Person (who is not at the time an Acquiring Person) would
become an Acquiring Person and which has been approved by a
Requisite Majority prior to the execution of the definitive
agreement providing for the acquisition or the public announcement
of the offer, as the case may be.
(m) "Person" means any individual, firm, corporation,
partnership, limited liability company or other public or private
entity.
(n) "Redemption Price" with respect to each Right means $.01,
as such amount may from time to time be adjusted in accordance with
Section 11. All references herein to the Redemption Price means
the Redemption Price as in effect at the time in question.
(o) "Requisite Majority" means, at any time, the affirmative
vote of a majority of the Continuing Directors then in office.
(p) "Rights Dividend Declaration Date" is August 17, 1998,
the date the Board of Directors of the Company declared a dividend
distribution of one Right for each share of Common Stock
outstanding on the Record Date.
(q) "Rights Shares" means the shares of Common Stock issuable
or issued upon the exercise of the Rights.
(r) "Section 11(a)(ii) Event" means any event described in
Section 11(a)(ii).
(s) "Section 13 Event" means any event described in clauses
(i), (ii), or (iii) of Section 13(a).
(t) "Stock Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, will include,
without limitation, a report filed pursuant to Section 13(d) under
the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become an Acquiring Person.
(u) "Subsidiary" means, with reference to any Person, any
entity of which an amount of voting securities sufficient to elect
at least a majority of the directors or similar Persons of such
entity is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(v) "Trading Day" means a day on which the principal national
securities exchange or quotation system on which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange,
a Business Day.
(w) "Triggering Event" means any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agents. The Company hereby
appoints the Rights Agent to act as agent for the Company (which,
in accordance with Section 3, prior to the Distribution Date are
also the holders of the Common Stock) in accordance with the terms
and conditions of this Agreement, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents pursuant to this Section or successor
Rights Agents pursuant to Section 21 as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Prior to the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of this Section 3(b)) by the
certificates for the Common Stock registered in the names
of the holders of the Common Stock (which certificates for Common
Stock will be deemed also to be certificates for Rights) and not by
separate certificates, and (ii) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send
by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A (the "Rights
Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided in this Agreement. In
the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p), at the time
of distribution of the Rights Certificates, the Company will make
the necessary and appropriate rounding adjustments (in accordance
with Section 14(a)) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of
any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As soon as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially
the form of Exhibit B, by first-class, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business
on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the
Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the
Common Stock will also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the
Expiration Date (as defined in Section 7), the transfer of any
certificates representing shares of Common Stock in respect of
which Rights have been issued will also constitute the transfer of
the Rights associated with such shares of Common Stock.
(c) Rights will be issued in respect of all shares of Common
Stock that are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock will also be deemed to be
certificates for Rights, and will bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER
TO CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT
BETWEEN AMERICAN FREIGHTWAYS CORPORATION (THE "COMPANY")
AND WACHOVIA BANK, N.A. (THE "RIGHTS AGENT") DATED AS OF
AUGUST 26, 1998 (AS AMENDED FROM TIME TO TIME, THE
"RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY
INCORPORATED IN THIS CERTIFICATE BY REFERENCE AND A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE
COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY
SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN
EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE PROMPTLY
AFTER RECEIPT OF A WRITTEN REQUEST. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS, OR BECOMES
AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL
AND VOID.
With respect to the shares of Common Stock issued after the
Record Date, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates will be evidenced by such
certificates alone and registered holders of Common Stock will also
be the registered holders of the associated Rights, and the
transfer of any of such certificates will also constitute the
transfer of the Rights associated with the Common Stock represented
by such certificates.
Section 4. Form of Rights Certificate.
The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse of the rights
certificates) will each be substantially in the form set forth in
Exhibit A and may have such marks of identification or designation
and such legends, summaries, or endorsements as the Company may
deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or quotation system on
which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22, the
Rights Certificates, whenever distributed, will be dated as of the
Record Date and on their face will entitle the holders of such
Rights Certificates to purchase such number of shares of Common
Stock as is set forth in such Rights Certificates at the price set
forth in such Rights Certificates (such exercise price per share,
the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price
will be subject to adjustment as provided in this Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates will be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer,
its Chief Financial Officer, its President or any Vice President,
either manually or by facsimile signature, will have affixed
thereto the Company's seal or a facsimile thereof, and will be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates
will be countersigned by the Rights Agent, either manually or by
facsimile signature and will not be valid for any purpose unless so
countersigned. In case any officer of the Company who has
signed any of the Rights Certificates ceases to be such officer of
the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Company with the same force and effect as
though the Person who signed such Rights Certificates had not
ceased to be such officer of the Company, and any Rights
Certificate may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Rights
Certificate, is a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued under this Agreement.
Such books will show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced
on the face of the Rights Certificates, and the date of each of the
Rights Certificates.
Section 6. Transfer, Split Up, Combination, and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost, or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 7(e) and Section 14,
at any time after the Distribution Date, and at or prior to the
Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined, or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder
to purchase a like number of Rights Shares (or, following a
Triggering Event, Common Stock, other securities, cash, or other
assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine, or exchange any
Rights Certificate or Rights Certificates will make such request in
writing delivered to the Rights Agent, and will surrender the
Rights Certificate or Rights Certificates to be transferred, split
up, combined, or exchanged at the principal office or offices of
the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company will be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder has completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and has provided sufficient
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company requests in good faith. Thereupon, the Rights Agent will,
subject to Section 4, Section 7(e) and Section 14, countersign and
deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination, or exchange of any Rights
Certificate.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction, or mutilation of a Rights Certificate, and, in case of
loss, theft, or destruction, of indemnity or security satisfactory
to them, and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in
lieu of the Rights Certificate so lost, stolen, destroyed, or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e), the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided in this Agreement including, without
limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii), Section 23(a) and Section 24) in whole or
in part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side of the Rights Certificate duly
executed, to the Rights Agent at the principal office or offices of
the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price for each share of Common Stock (or
other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to
the earlier of (i) the Close of Business on August 31, 2003, (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 or (iii) the time at which such
rights are exchanged as provided in Section 24 (the earlier of such
times being the "Expiration Date")).
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right will initially be $25, subject
to adjustment from time to time as provided in Section 11, and
Section 13(a). The Purchase Price will be payable in accordance
with Section 7(c).
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment of the Purchase
Price for the shares of Common Stock (or other shares, securities,
cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax, the Rights Agent will,
subject to Section 20(k), promptly (i)(A) requisition from any
transfer agent of the shares of Common Stock (or make available, if
the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Common Stock to be
purchased (the Company hereby irrevocably authorizing its transfer
agent to comply with all such requests) or (B) if the Company has
elected to deposit the shares of Common Stock with a depository
agent, requisition from the depository agent depository receipts
representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common
Stock represented by such receipts will be deposited by the
transfer agent with the depository agent) and the Company will
direct the depository agent to comply with such request; (ii)
requisition from the Company the amount of cash, if any, to be paid
in lieu of fractional shares in accordance with Section 14; (iii)
after receipt of such certificates or depository receipts, cause
such certificates or depository receipts to be delivered to or upon
the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder; and (iv) after receipt thereof, deliver such cash, if any,
to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may
be reduced pursuant to Section 11(a)(iii)) will be made in cash or
by certified bank check or
bank draft payable to the order of the Company. In the event that
the Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash, or distribute other property pursuant
to Section 11(a), the Company will make all arrangements necessary so
that such other securities, cash, or other property are available for
distribution by the Rights Agent, if and when appropriate. The Company
reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised
so that only whole shares of Common Stock would be issued.
(d) If the registered holder of any Rights Certificate
exercises less than all the Rights evidenced by such certificate, a
new Rights Certificate evidencing the unexercised Rights will be
issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, subject to
the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights Beneficially Owned by any Person
referred to in clauses (i) through (iii) below will become null and
void without any further action and no holder of such Rights will
have any rights whatsoever with respect to such Rights, under any
provision of this Agreement or otherwise: (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee from an Acquiring Person (or from any Associate or
Affiliate of an Acquiring Person) that becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee from an
Acquiring Person (or of any such Associate or Affiliate) that
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement, or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors of
the Company has determined is part of an agreement, plan,
arrangement, or understanding that has as a substantial purpose or
effect of the avoidance of this Section 7(e). The Company will use
reasonable efforts to insure that the provisions of this Section
7(e) and Section 4(b) are complied with, but will have no liability
under this Agreement to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person, or any of its Affiliates,
Associates, or transferees.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights nor the Company will 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 has (i) completed and signed the
certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for 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 requests in good
faith.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange will, if
surrendered to the Company or any of its agents, be delivered to
the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights
Agent, will be cancelled by it, and no Rights Certificates will be
issued in lieu thereof except as expressly permitted by any of the
provisions of this Agreement. The Company will deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent will so
cancel and retire, any other Rights Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights
Agent will deliver all cancelled Rights Certificates to the Company,
or will, at the written request of the Company, destroy such cancelled
Rights Certificates, and in such case will deliver a certificate of
destruction to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company will use its best efforts to reserve and keep
available out of its authorized shares of Common Stock (and/or
other securities) or its authorized and issued shares of Common
Stock (and/or other securities) held in its treasury, the number of
shares of Common Stock (and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Common Stock (and, following the
occurrence of a Triggering Event, Common Stock or other securities)
issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange or automated quotation
system, the Company will use its reasonable efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange or
automated quotation system upon official notice of issuance upon
such exercise.
(c) The Company will use its best efforts to (i) file, as
soon as practicable following the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii), a registration statement under
the Act, with respect to the securities purchasable upon exercise
of the Rights or issued in an exchange pursuant to Section 24 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 Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure
compliance with, the applicable state securities laws in connection
with the exercisability of the Rights. The Company may temporarily
suspend, for up to 90 days after the date described in clause (i)
of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company will issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension no longer remains in effect. In
addition, if the Company determines 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 will not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction has not been obtained,
the exercise of such Rights is not permitted under applicable law,
or a registration statement has not been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common
Stock (and/or other securities) delivered upon exercise of Rights
will, at the time of delivery of the certificates for such shares
upon payment of the Purchase Price, be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes
and charges that may be payable in respect of the issuance or
delivery of the Rights Certificates and any Common Stock or other
certificates issued upon the exercise of Rights. The Company will
not, however, be required to pay any transfer tax that may be
payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of
Common Stock (or other securities, as the case may be) in respect
of a name other than that of the registered holder of the Rights
Certificates or to issue or deliver any Common Stock or other
certificates in a name other than that of the registered holder
until such tax has been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no
such tax is due.
Section 10. Common Stock Record. Each Person in whose name
any Rights Share certificate is issued will, for all purposes, be
deemed to have become the record holder of such Rights Shares
represented thereby, and such Certificate will be dated, on the
date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common
Stock (or other securities, as the case may be) transfer books of
the Company are closed, such Person will be deemed to have become
the record holder of the Rights Shares on, and such certificate
will be dated, the next succeeding Business Day on which the Common
Stock (or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights
evidenced thereby, the Rights Certificate holders will not be
entitled to any stockholder rights with respect to Rights Shares,
including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive
rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided in this Agreement.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares, or Number of Rights. The Purchase Price, the number and
kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) In the event the Company at any time after the date
of this Agreement (A) declares a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivides the outstanding
Common Stock, (C) combines the outstanding Common Stock into a
smaller number of shares, or (D) issues any shares of its capital
stock in a reclassification of the Common Stock (including, without
limitation, 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) and Section 7(e), 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 and kind of shares of Common Stock or capital stock, as the
case may be, issuable on such date, will be proportionately
adjusted so that the holder of any Right exercised after such time
will be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of Common
Stock or capital stock, as the case may be, that, if such Right had
been exercised immediately prior to such date and at a time when
the Common Stock transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination, or
reclassification. If an event occurs that would require an
adjustment under both this Section 1 l(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) will be in
addition to, and will be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) In the event that any Person, alone or together with
its Affiliates and Associates, at any time after the Rights
Dividend Declaration Date, becomes an Acquiring Person, then,
proper provision will be made so that each Right holder (except as
provided in Section 7(e)) will thereafter have the right to
receive, upon exercise of such Right at the then current Purchase
Price in accordance with the terms of this Agreement, such number
of Rights Shares equal to the result obtained by (x) multiplying
the then current Purchase Price by the then number of Rights Shares
for which a Right is then exercisable and (y) dividing that product
by 50% of the Current Market Price (defined in Section 11(d)) per
share of Common Stock on the date such Person became an Acquiring
Person (such number of Rights Shares, the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock that are authorized by the Company's articles of
incorporation but not issued, or issued but not outstanding, are
not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii), the Company will, upon the
exercise of a Right and payment of the applicable Purchase Price,
(A) determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value"), and (B) with respect to
each Right (subject to Section 7(e)), make adequate provision to
substitute for the Adjustment Shares (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock), that a Requisite Majority has deemed to have
essentially the same rights, privileges and preferences as shares
of Common Stock ("Common Stock Equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been conclusively determined by a
Requisite Majority based upon the advice of a nationally recognized
investment banking firm selected by a Requisite Majority; provided,
however, that if the Company has not made adequate provision to
deliver value pursuant to clause (b) above within 30 days following
the first occurrence of a Section 11(a)(ii) Event, then the Company
will be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary,
cash, which shares or cash have an aggregate value equal to the
Spread. The term "Spread"
means the excess of (i) the Current Value over (ii) the Purchase
Price. If the Board of Directors determines in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the 30-day
period set forth above may be extended to the extent necessary, but not
more than 90 days after the Section 11(a)(ii) Triggering Event, in order
that the Company may seek shareholder approval for the authorization of
such additional shares (such 30-day period, as it may be extended,
being the "Substitution Period"). To the extent that action is to
be taken pursuant to this Section 11(a)(iii), the Company (1) will
provide, subject to Section 7(e), that such action will apply
uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any required shareholder
approval or to decide the appropriate form of distribution to be
made and the value thereof. In the event of any such suspension,
the Company will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension no
longer remains in effect. For purposes of this Section 11(a)(iii),
the Current Value of each Adjustment Share will be the Current
Market Price per share of the Common Stock on the effective date of
the Section 11(a)(ii) Event and the per share or per unit value of
any Common Stock Equivalent will be deemed to equal the Current
Market Price per share of the Common Stock on such date.
(b) In case the Company fixes a record date for the issuance
of rights, options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period expiring
within 45 calendar days after such record date) Common Stock
(and/or Common Stock Equivalents) (or securities convertible into
Common Stock) at a price per share of Common Stock (or having a
conversion price per share, if a security convertible into Common
Stock) less than the Current Market Price per share of Common Stock
on such record date, the Purchase Price to be in effect after such
record date will be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, (i) the
numerator of which is number of shares of Common Stock outstanding
on such record date, plus the number of shares of Common Stock that
the aggregate offering price of the total number of shares of
Common Stock (and/or Common Stock Equivalents) so to be offered (or
the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market
Price, and (ii) the denominator of which is the number of shares of
Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock (and/or Common Stock Equivalents)
to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible).
In the event that the number of shares of Common Stock issuable
under the terms of a convertible security, or the conversion or
exercise price of such convertible security, changes after the
initial issuance of such convertible security, an adjustment will
be made to the Purchase Price that conforms with the adjustment set
forth in this Section 11(b). In case such subscription price may
be paid by delivery of consideration part or all of which may be in
a form other than cash, the value of such consideration will be as
conclusively determined in good faith by the Board of Directors of
the Company, whose determination will be described in a statement
filed with the Rights Agent and will be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock owned by or
held for the account of the Company will be deemed not to be
outstanding for the purpose of any such computation. Such adjustment
will be made successively whenever such a record date is fixed,
and in the event that such rights or warrants are not so
issued, the Purchase Price will be adjusted to be the Purchase
Price that would then be in effect if such record date had not been
fixed.
(c) In case the Company fixes a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date will be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, (i) the numerator of which
is the Current Market Price per share of Common Stock on such
record date, less the fair market value (as conclusively determined
in good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the
Rights Agent) of the portion of the cash, assets, or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Common Stock and (ii) the
denominator of which is such Current Market Price per share of
Common Stock. Such adjustments will be made successively whenever
such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price will be adjusted to
be the Purchase Price that would have been in effect if such record
date had not been fixed.
(d) The "Current Market Price" per share of Common Stock on
any date will be deemed to be the average of the daily closing
prices per share of such Common Stock for the 30 consecutive
Trading Days immediately prior to such date; provided, however,
that in the event that the Current Market Price per share of the
Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (i) a dividend
or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common
Stock (other than the Rights), or (ii) any subdivision,
combination, or reclassification of such Common Stock, and the ex-
dividend date for such dividend or distribution, or the record date
for such subdivision, combination, or reclassification has not
occurred prior to the commencement of the requisite 30 Trading Day
period, as set forth above, then, and in each such case, the
Current Market Price will be properly adjusted to take into account
ex-dividend trading. The closing price for each day will be the
last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities
exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors. If on any such date no market
maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board
of Directors will be used. If the Common Stock is not publicly
held or not so listed or traded, Current Market Price per share
will mean the fair value per share as determined in good faith by
the Board of Directors, the determination of which will be
described in a statement filed with the Rights Agent and will be
conclusive for all purposes.
(e) Anything in this Agreement to the contrary
notwithstanding, no adjustment in the Purchase Price will be
required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments that by reason of this
Section 11(e) are not required then in effect to be made will be
carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 will be made to
the nearest cent or to the nearest one-hundredth of a share of
Common Stock. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 will be made no
later than the earlier of (i) three (3) years from the date of the
transaction that mandates such adjustment or (ii) the Final
Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter
exercised becomes entitled to receive any shares of capital stock
other than Common Stock, then the number of such other shares so
receivable upon exercise of any Right and the Purchase Price will
be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect
to the Common Stock contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j), (k), (m), and (q) and the provisions of
Sections 7, 9, 10, 13, and 14 with respect to the Common Stock will
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 under this Agreement will
evidence the right to purchase, at the adjusted Purchase Price, the
number of Rights Shares purchasable from time to time under this
Agreement, all subject to further adjustment as provided in this
Agreement.
(h) Unless the Company has 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 will thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of Rights Shares (calculated
to the nearest one-hundredth) obtained by (i) multiplying (x) the
number of Rights Shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Rights Shares purchasable
upon the exercise of a Right. Each of the Rights outstanding after
such an adjustment in the number of Rights will be exercisable for
the number of Rights Shares for
which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of
Rights will become that number of Rights (calculated to the nearest
one-hundredth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The
Company will make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates
have been issued, will be at least ten Business Days later than the
date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company will, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates
on such record date Rights Certificates evidencing, subject to
Section 14, the additional Rights to which such holders are
entitled as a result of such adjustment, or, at the option of the
Company, will cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders are entitled after
such adjustment. Rights Certificates so to be distributed will be
issued, executed, and countersigned in the manner provided for in
this Agreement (and may bear, at the option of the Company, the
adjusted Purchase Price) and will be registered in the names of the
holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the Rights Shares, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per
Rights Shares and the number of Rights Shares that were expressed
in the initial Rights Certificates issued under this Agreement.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the number of Rights Shares, the Company will take any corporate
action that may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue such number of
fully paid and nonassessable Rights Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 requires that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until
the occurrence of such event the issuance to the holder of any
Right exercised after such record date the number of Rights Shares
and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of Rights
Shares 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 will deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company will be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that,
in its good faith judgment, the Board of Directors of the Company
determines it to be advisable in order that any (i) consolidation
or subdivision of the Common Stock, (ii) issuance wholly for cash
of any shares of Common Stock at less than the current market
price, (iii) issuance wholly for cash of shares of Common Stock or
securities that by their terms are convertible into or exchangeable
for shares of Common Stock, (iv) stock dividends, or (v) issuance
of rights, options, or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Common Stock will
not be taxable to such stockholders.
(n) The Company covenants and agrees that it will not, at any
time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o), (ii) merge with, from, or into
any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o)), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o)), if (x) at the time of or immediately after
such consolidation, merger, or sale there are any rights, warrants,
or other instruments or securities outstanding or agreements in
effect that could reasonably be expected to substantially diminish
or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with, or immediately after,
such consolidation, merger, or sale, the stockholders of the Person
that constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 27, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable
that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date
(i) declares a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivides the outstanding
shares of Common Stock, or (iii) combines the outstanding shares of
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date,
will be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any
such event will equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which is the
total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which
is the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
(q) In the event that the Rights become exercisable following
a Section 11(a)(ii) Event, the Company, by action of a Requisite
Majority, may permit the Rights, subject to Section 7(e), to be
exercised for 50% of the shares of Common Stock (or cash or other
securities or assets to be substituted for the Adjustment Shares
pursuant to Section 1l(a)(iii)) that would otherwise be purchasable
under Section 11(a) in consideration of the surrender to the
Company of the Rights so exercised and without other payment of the
Purchase Price. Rights exercised under this Section 11(q) will be
deemed to have been exercised in full and will be cancelled.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section
11 or Section 13, the Company will (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of
the facts accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the Common
Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 25. The Rights
Agent will be fully protected in relying on any such certificate
and on any adjustment contained in such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) Except in a Permitted Transaction, in the event that,
following the Stock Acquisition Date, directly or indirectly, (i)
the Company consolidates with, or merges with, or into, any other
Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o)), and the Company is not the
continuing or surviving Person of such consolidation or merger;
(ii) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o)) consolidates with, or
merges with, or into, the Company, and the Company is the
continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part
of the outstanding shares of Common Stock is changed into or
exchanged for stock or other securities of any other Person or cash
or any other property; or (iii) the Company sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise
transfers), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o)), then, and in each such case (except
as contemplated by Section 13(d)), proper provision will be made so
that (A) each holder of a Right, except as provided in Section 7(e)
or Section 13(e), will thereafter have the right to receive, upon
the exercise of such Right at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable, and freely
tradable shares of Common Stock of the Principal Party (as defined
below), not subject to any liens, encumbrances, preemptive rights,
rights of first refusal, or other adverse claims, as are equal to
the result obtained by (1) multiplying the then current Purchase
Price by the number of Rights Shares for which a Right is
exercisable immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number
of such Rights Shares for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first
occurrence), and (2) dividing that product (which, following the
first occurrence of a Section 13 Event, will be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of the
Common Stock of such Principal Party on the date of consummation of
such Section 13 Event; (B) such Principal Party will thereafter be
liable for, and will assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" will thereafter be deemed to
refer to such Principal Party, it being specifically intended that
the provisions of Section 11 will apply only to such Principal
Party following the first occurrence of a Section 13 Event; (D)
such Principal Party will take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions of
this Agreement will thereafter be applicable, as nearly as may be,
in relation to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (E) the provisions of Section
11(a)(ii) will be of no effect following the first occurrence of
any Section 13 Event.
(b) "Principal Party" means
(i) in the case of any transaction described in clause
(i) or (ii) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has
not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so
registered, "Principal Party" will refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, with Common Stock that is
and has been so registered, "Principal Party" will refer to
whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
(c) The Company will not consummate any such consolidation,
merger, sale, or transfer unless the Principal Party has a
sufficient number of authorized shares of its Common Stock that
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party have
executed and delivered to the Rights Agent a supplemental agreement
providing for the Principal Party to assume and perform the terms
set forth in Sections 13(A) and (B) and further providing that, as
soon as practicable after the date of any consolidation, merger, or
transfer mentioned in Section 13(a), the Principal Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to
(A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final
Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) In the event that the Rights become exercisable under
Section 13(a), the Company, by action of a Requisite Majority, may
agree with the Principal Party that the Principal Party may permit
the Rights to be exercised for 50% of the Common Shares of the
Principal Party that would otherwise be purchasable under Section
13(a), in consideration of the surrender to the Principal Party, as
the successor to the Company under Section 13(a)(ii), of the Rights
so exercised and without other payment of the Purchase Price.
Rights exercised under this Section 13(e) will be deemed to have
been exercised in full and cancelled.
(e) The provisions of this Section 13 will similarly apply to
successive mergers, consolidations, and sales or other transfers.
In the event that a Section 13 Event occurs at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights that have not
theretofore been exercised will thereafter become exercisable in
the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company will not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(p), or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there will
be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right will be the closing price of
the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable.
The closing price of the Rights for any day will be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
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 conclusively determined in good faith by the
Board of Directors of the Company will be used.
(b) The Company will not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as provided in this Agreement an amount in
cash equal to the same fraction of the Current Market Price of one
share of Common Stock as of the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right, by the acceptance of the Rights,
expressly waives the right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), may, on its
own behalf and for its own benefit, enforce, and may institute and
maintain any suit, action, or proceeding against the Company to
enforce, or otherwise act in respect of, its right to exercise the
Rights evidenced by such Rights Certificate in the manner Provided
in such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations
under this Agreement and injunctive relief against actual or
threatened violations of the obligations under this Agreement of
any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the Rights consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer, and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section 7(f), the Company and
the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, will be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree, or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory, or administrative
agency or commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company will use its reasonable
best efforts to have any such order, decree, or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate will be
entitled to vote or receive dividends or be deemed for any purpose
the holder of the number of shares of Common Stock or any other
securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor will anything
contained in this Agreement or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate have been
exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties under this
Agreement. 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 to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including, without
limitation, the costs and expenses of defending against any claim
of liability. In no case will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the possibility of
such loss or damage.
(b) The Rights Agent will be protected and will incur no
liability for or in respect of any action taken, suffered, or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document
believed by it to be genuine and to be signed, executed, and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any Person into or with which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the corporate
trust or shareholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties to this
Agreement; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor
Rights Agent succeeds to the agency created by this Agreement, any
of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates have not been countersigned, any
successor Rights Agent may countersign such Rights Certificates
either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates have not been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name
or in its changed name, and in all such cases such Rights
Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance
of such Rights Certificates, will be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
will be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person or Adverse Person and the determination of
"Current Market Price") be proved or established by the Company
prior to taking or suffering any action under this Agreement, such
fact or matter (unless other evidence in respect of such fact or
matter is specifically prescribed in this Agreement) may be deemed
to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
Chief Executive Officer, the Chief Operating Officer, the President,
any Vice President, the Treasurer, any Assistant Treasurer, the Secretary,
or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate will be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable under this Agreement only
for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and will be
deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery of this Agreement (except the due execution of this
Agreement by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature);
nor will it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights
Certificate; nor will it be responsible for any adjustment required
under the provisions of Section 11 or Section 13, or responsible
for the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after actual notice of any such adjustment);
nor will it by any act under this Agreement be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Common Stock will, when so issued, be validly authorized or issued,
fully paid, or nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
under this Agreement from the Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the President, any
Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its
duties, and it will not be liable for any action taken or suffered
to be taken by it in good faith in accordance with instructions of
any such officer.
(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, 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 in this Agreement
will preclude the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers vested by this Agreement in it or perform any duty
under this Agreement either itself or by or through its attorneys
or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect, or misconduct of any
such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect, or misconduct; provided,
however, reasonable care was exercised in the selection and
continued employment of such Person.
(j) No provision of this Agreement will 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 under
this Agreement or in the exercise of its rights if there are
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicates an
affirmative response to clause 1 or 2 of such certificate, the
Rights Agent will not take any further action with respect to such
requested exercise of transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent resigns or
is removed or otherwise becomes incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company fails
to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who will,
with such notice, submit such holder's Rights Certificate for
inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, will be
a corporation organized and doing business under the laws of the
United States or a State of the United States, in good standing,
that is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or
state authority and that has at the time of its appointment as
Rights Agent a combined capital and surplus of at least
$25,000,000. After appointment, the successor Rights Agent will be
vested with the same powers, rights, duties, and responsibilities
as if it had been originally named as Rights Agent without Further
act or deed, except that the predecessor Rights Agent will deliver
and transfer to the successor Rights Agent any property at the time
held by it under
this Agreement and execute and deliver any further assurance,
conveyance, act, or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company
will file notice of such appointment in writing with the
predecessor Rights Agent and each transfer agent of the Common
Stock and the Common Stock, and mail a notice of such appointment
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 2 1,
however, or any defect in such notice, will not affect the legality
or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificate.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, in its discretion, issue
new Rights 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, kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to
the Expiration Date, the Company (a) will, with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise,
conversion, or exchange of securities issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (y) no such Rights
Certificate will be issued if, and to the extent that, the Company
is advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (z) no
such Rights Certificate will be issued if, and to the extent that,
appropriate adjustment has otherwise been made in lieu of the
issuance of such Rights Certificate.
Section 23. Redemption and Termination.
(a) The Company may, at its option, by action of a Requisite
Majority, at any time prior to the earlier of (i) the Distribution
Date, or (ii) the Final Expiration Date, redeem all but not fewer
than all the then outstanding Rights at the Redemption Price (the
date of such redemption, the "Redemption Date"), and the Company,
at its option, may pay the Redemption Price either in cash or
Common Stock or other securities of the Company, deemed by the
Board of Directors, in the exercise of its sole discretion, to be
at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of a Requisite Majority
ordering the redemption of the Rights, evidence of which has been
filed with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights will be to
receive the Redemption Price. Promptly after the action of a
Requisite Majority ordering the redemption of the Rights, the
Company will give notice of such redemption to the Rights Agent and
to the holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock. Each
such notice of redemption will state the method by which the payment of
the Redemption Price will be made. Any notice that is mailed in the
manner in this Agreement provided will be deemed given, whether or not
the holder receives such notice. In any case, failure to give such notice
by mail, or any defect in the notice, to any particular holder of Rights
shall not affect the sufficiency of the notice to other holders of
Rights.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after a Triggering Event, exchange all or part of the
then outstanding and exercisable Rights (which will not include
Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of Common Stock, each Right being
exchangeable for one share of Common Stock, appropriately adjusted
to reflect any transaction specified in Section 11(a)(i) occurring
after the Record Date (such number of shares of Common Stock
issuable in exchange for one Right being referred to herein as the
"Exchange Shares"). 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 of its
Subsidiaries or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such
Plan or any Person who is the Beneficial Owner of 15% or more of
the Common Stock as of the Rights Dividends Declaration Date or any
transferee of any shares of Common Stock owned by such Person),
together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Stock 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 the Exchange Shares. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice that 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 Common Stock for
Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Stock issued but not outstanding, or authorized but unissued, to
permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Stock for issuance upon
exchange of the Rights or shall take such other action specified in
Section 11(a)(iii) hereof.
(d) The Company shall not be required to issue fractions of
shares of Common Stock to distribute certificates which evidence
fractional Common Stock. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares would
otherwise be issuable an amount in cash equal to the same fraction
of the Current Market Price of a whole share of Common Stock. For
the purposes of this Subsection (d), the Current Market Value of a
whole share of Common Stock shall be determined as of 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 proposes, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Common Stock rights or
warrants to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common
Stock), or (iv) to effect any consolidation or merger into, or with
any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(6)), or to effect any
sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o)), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in
each such case, the Company will give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section
26, a notice of such proposed action, which will specify the record
date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein
by the holders of the shares of Common Stock, if any such date is
to be fixed, and such notice will be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior
to the record date for determining holders of the shares of Common
Stock for purposes of such action, and in the case of any such
other action, at least 20 days prior to the date of the taking of
such proposed action or the date of participation therein by the
holders of the shares of Common Stock, whichever is the earlier.
(b) In case of a Triggering Event, then (i) the Company will
as soon as practicable give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 26, a notice
of the occurrence of such event, which will specify the event and
the consequences of the event to holders of Rights under this
Agreement, and (ii) all references in Section 25(a) to Common Stock
will be deemed thereafter to refer to other securities, if
appropriate.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Rights Certificate to or on the Company will
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
American Freightways Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇▇ ▇▇▇▇
Suite 1100
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Rights Certificate to or on the Rights Agent
will be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
Wachovia Bank, N.A.
Legal Department
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) will be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplement and Amendment. The Company, by action
of its Board of Directors, and the Rights Agent may from time to
time supplement or amend this Agreement without the approval of any
holders of Rights in order to cure any ambiguity, to correct or
supplement any provision contained in this Agreement that may be
defective or inconsistent with any other provisions in this
Agreement, or to make any other provisions in regard to matters or
questions arising under this Agreement that the Company and Rights
Agent may deem necessary or desirable and that will be consistent
with, and for the purpose of fulfilling, the objectives of the
Board of Directors in adopting this Agreement; provided, however,
that following the Stock Acquisition Date, this Agreement shall not
be amended in any manner that would adversely affect the basic
economic terms of the Rights; provided, further, that, once the
Rights are no longer redeemable in accordance with Section 23 of
this Agreement, no amendment to this Agreement may have the effect
of making the Rights redeemable.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent will bind and inure to the benefit of their respective
successors and assigns under this Agreement.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, will be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement. The Board of Directors of the
Company (with, where specifically provided for in this Agreement,
the concurrence of the Continuing Directors) will have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of
Directors (with, where specifically provided for in this Agreement,
the concurrence of the Continuing Directors) or to the Company, or
as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(a) interpret the provisions of this Agreement, and (b) 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, to amend the Agreement or to
extend the Distribution Date). All such actions, calculations,
interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors (with, where
specifically provided for in this Agreement, the concurrence of the
Continuing Directors) in good faith, will (x) be final, conclusive,
and binding on the Company, the Rights Agent, the holders of the
Rights, and all other parties, and (y) not subject the Board of
Directors or the Continuing Directors to any liability to the
holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement will be construed to give to any Person other than the
Company, the Rights Agent, and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable right, remedy,
or claim under this Agreement; and this Agreement will be for the
sole and exclusive benefit of the Company, the Rights Agent, and
the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common stock).
Section 31. Severability. If any term, provision, covenant,
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants,
and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired, or invalidated;
provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant, or
restriction is held by such court or authority to be invalid, void,
or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in
Section 23 will be reinstated and will not expire until the Close
of Business on the tenth Business Day following the date of such
determination by the Board of Directors. Without limiting the
foregoing, if any
provision requiring action by a Requisite Majority is held by any court
of competent jurisdiction or other authority to be invalid, void, or
unenforceable, such determination will then be made by the Board of
Directors of the Company in accordance with applicable law and the
Company's articles of incorporation and by-laws.
Section 32. Governing Law. This agreement, each Right, and
each Rights Certificate issued under this Agreement will be deemed
to be a contract made under the laws of Arkansas and for all
purposes will be governed by and construed in accordance with the
laws of such state applicable to contracts made and to be performed
entirely within such state.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts will for
all purposes be deemed to be an original, and all such counterparts
will together constitute but one and the same instrument.
Section 34. Interpretation. Descriptive headings of the
several Sections of this Agreement are inserted for convenience
only and will not control or affect the meaning or construction of
any of the provisions of this Agreement. References in this
Agreement to Sections and Exhibits are references to the Sections
of and Exhibits to this Agreement unless the context requires
otherwise. In this Agreement, the word "or" is not exclusive.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
Attest: AMERICAN FREIGHTWAYS
CORPORATION
/s/▇▇▇▇▇ ▇▇▇▇▇▇
By:/s/▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: President, Chief Operating
Officer
Attest: WACHOVIA BANK, N.A.
/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agents 4
Section 3. Issue of Rights Certificates 4
Section 4. Form of Rights Certificate 6
Section 5. Countersignature and Registration 6
Section 6. Transfer, Split Up, Combination, and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost,
or Stolen Rights Certificates 7
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 8
Section 8. Cancellation and Destruction of Rights
Certificates 9
Section 9. Reservation and Availability of Capital Stock 10
Section 10. Common Stock Record 11
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares, or Number of Rights 11
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares 18
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 18
Section 14. Fractional Rights and Fractional Shares 20
Section 15. Rights of Action 21
Section 16. Agreement of Rights Holders 21
Section 17. Rights Certificate Holder Not Deemed a
Stockholder 22
Section 18. Concerning the Rights Agent 22
Section 19. Merger or Consolidation or Change of Name of
Rights Agent 23
Section 20. Duties of Rights Agent 23
Section 21. Change of Rights Agent 25
Section 22. Issuance of New Rights Certificate 26
Section 23. Redemption and Termination 26
Section 24. Exchange 27
Section 25. Notice of Certain Events 28
Section 26. Notices 28
Section 27. Supplement and Amendment 29
Section 28. Successors 30
Section 29. Determinations and Actions by the Board of
Directors, etc. 30
Section 30. Benefits of this Agreement 30
Section 31. Severability 30
Section 32. Governing Law 31
Section 33. Counterparts 31
Section 34. Interpretation 31