▇▇▇▇ BURNIE BANCORP
and
THE BANK OF ▇▇▇▇ BURNIE
Rights Agent
Rights Agreement
Dated as of February 13, 1998
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TABLE OF CONTENTS
Section Page
1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . 1
2 Appointment of Rights Agent . . . . . . . . . . . . . . . . . 9
3 Issuance of Rights Certificates . . . . . . . . . . . . . . . 9
4 Form of Rights Certificates . . . . . . . . . . . . . . . . . 12
5 Countersignature and Registration . . . . . . . . . . . . . . 13
6 Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . . . . . . . . . . . 14
7 Exercise of Rights; Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8 Cancellation and Destruction of Rights Certificates . . . . . 19
9 Reservation and Availability of Capital Stock . . . . . . . . 19
10 Record Date for Securities Issued Upon Exercise . . . . . . 21
11 Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . . . . . . . . 22
12 Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13 Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . . . 35
14 Fractional Rights and Fractional Shares . . . . . . . . . . . 40
15 Rights of Action . . . . . . . . . . . . . . . . . . . . . . 41
16 Agreement of Rights Holders . . . . . . . . . . . . . . . . . 42
17 Rights Certificate Holder Not Deemed a Stockholder . . . . . 43
18 Concerning the Rights Agent . . . . . . . . . . . . . . . . . 43
19 Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
20 Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 45
21 Change of Rights Agent . . . . . . . . . . . . . . . . . . . 48
22 Issuance of New Rights Certificates . . . . . . . . . . . . . 49
23 Redemption and Termination . . . . . . . . . . . . . . . . . 50
24 Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . 51
25 Notice of Certain Events . . . . . . . . . . . . . . . . . . 53
26 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
27 Supplements and Amendments . . . . . . . . . . . . . . . . . 55
28 Successors . . . . . . . . . . . . . . . . . . . . . . . . . 56
29 Determinations and Actions by the Board, etc. . . . . . . . . 56
30 Benefits of this Agreement . . . . . . . . . . . . . . . . . 57
31 Severability . . . . . . . . . . . . . . . . . . . . . . . . 57
32 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 57
33 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 58
34 Descriptive Headings . . . . . . . . . . . . . . . . . . . . 58
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Undertaking
Exhibit C -- Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of February 13, 1998, between ▇▇▇▇
Burnie Bancorp, a Maryland corporation (the "Company"), and The Bank of
▇▇▇▇ Burnie (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on February 13, 1998, (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (the "Board") authorized and
declared a dividend distribution of one Right (as hereinafter defined) for
each share of Common Stock (as hereinafter defined) of the Company
outstanding at the close of business on February 13, 1998 (the "Record
Date") and authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11(i) hereof)
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 (as hereinafter defined) and under certain
circumstances thereafter, each Right initially representing the right to
purchase one share of Common Stock of the Company, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
hereinafter defined) who or which, together with all Affiliates and
Associates (as hereinafter defined) of such Person, shall be the Beneficial
Owner (as hereinafter defined) of 10% or more of the shares of Common Stock
of the Company then outstanding, but shall not include an Exempt Person (as
hereinafter defined).
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as hereinafter defined).
(e) "Agreement" shall mean this Rights Agreement as
originally executed or as it may from time to time be supplemented,
amended, renewed, restated or extended pursuant to the applicable
provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, owns or has the
right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights,
warrants, options or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event (as hereinafter defined), or
(C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights are Original
Rights (as hereinafter defined) or securities issued pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding (whether or not in writing) to vote
such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation and, if the
Common Stock is then registered under Section 12 of the Exchange
Act, made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor statement) or, in the event the Common Stock is not
then registered under Section 12 of the Exchange Act, would not
then be so reportable if the Common Stock were registered under
Section 12 of the Exchange Act; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in clause (A) of the proviso to subparagraph (ii) of
this paragraph (f)) or disposing of any voting securities of the
Company;
provided, however, that nothing in this paragraph (f) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to be deemed to "beneficially own," any securities acquired,
or which that Person has the right to acquire, through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.
(g) "Board" shall have the meaning set forth in the first
"WHEREAS" clause at the beginning of this Agreement.
(h) "Business Day" shall mean any day other than a
Saturday, Sunday or day on which banking institutions in the State of
Maryland are authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., New York City time, on
the next succeeding Business Day.
(j) "Common Stock" when used in reference to the Company
shall mean the common stock, par value $10.00 per share, of the Company or
any other shares of capital stock of the Company into which such stock
shall be reclassified or changed. "Common Stock" when used with reference
to any Person other than the Company organized in corporate form shall mean
(i) the capital stock or other equity interest in such Person with the
greatest voting power, (ii) the equity securities or other equity interest
having power to control or direct the management of such Person or (iii) if
such Person is a Subsidiary (as hereinafter defined) of another Person, the
capital stock, equity securities of or other equity interest in the Person
or Persons which ultimately control such first-mentioned Person and which
has issued any such outstanding capital stock, equity securities or equity
interest. "Common Stock" when used with reference to any Person not
organized in corporate form shall mean units of beneficial interest which
(x) represent the right to participate generally in the profits and losses
of such Person (including without limitation any flow-through tax benefits
resulting from an ownership interest in such Person) and (y) are entitled
to exercise the greatest voting power of such Person or, in the case of a
limited partnership, have the power to remove the general partner or
partners.
(k) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Company" shall have the meaning set forth in the first
paragraph of this Agreement until a successor corporation or entity shall
have become such or until a Principal Party (as hereinafter defined) shall
assume, and thereafter be liable for, all obligations and duties of the
Company hereunder pursuant to the applicable provisions of this Agreement,
and thereafter, "Company" shall mean such successor or Principal Party,
respectively.
(m) "Continuing Outside Directors" shall mean (i) the
members of the Board, while such Person are members of the Board, who are
not Acquiring Persons, or Affiliates or Associates of any Acquiring Person
or representatives of an Acquiring Person or of any such Affiliate or
Associate and who are not officers of the Company or any of its
Subsidiaries, and were members of the Board prior to the date of this
Agreement, or (ii) Persons who subsequently became members of the Board,
while such Persons are members of the Board, who are not Acquiring Persons
or Affiliates or Associates of an Acquiring Person, or representatives of
an Acquiring Person or of any such Affiliate or Associate, and who are not
officers of the Company or any of its Subsidiaries, if such Persons'
nominations for election or election to the Board are recommended or
approved by a majority of the Continuing Outside Directors.
(n) "Current Market Price" shall have the meaning set forth
in Section 11(d) hereof.
(o) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(p) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(q) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(r) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(s) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or employee
stock plan of the Company or of any Subsidiary of the Company, (iv) any
Person or entity organized, appointed, established or holding Common Stock
of the Company by, for or pursuant to the terms of any employee benefit
plan or employee stock plan, (v) a Person who, together with its Affiliates
and Associates, is the Beneficial Owner as of the date of this Agreement of
10% or more of the Common Stock of the Company outstanding and who at no
time after the date of this Agreement becomes the Beneficial Owner of 20%
or more of the Common Stock of the Company outstanding, provided, however,
that any such Person shall cease to be an Exempt Person if such Person
shall fail to execute and deliver to the Company the undertaking in the
form of Exhibit B hereto within ten Business Days of being requested by the
Company in writing in accordance with the requirements of the immediately
succeeding proviso to execute and deliver such undertaking (an "Undertaking
Request") which Undertaking Request shall contain the principal terms of
the bona fide proposal contemplated by clause (A)(1) of the immediately
succeeding proviso or the terms of the proposed amendment or liquidation,
dissolution or winding up contemplated by clause (B) of the immediately
succeeding proviso, provided, further, however, that the Company may not
make an Undertaking Request unless and until (A)(1) the Company has
received a bona fide proposal (either orally or in writing) from a third
party to engage in a transaction contemplated by any of clauses (b) through
(e) of Article Seven of the Company's Articles of Incorporation and (2) the
Company has received a favorable fairness opinion (either orally or in
writing), or an indication that such an opinion could be rendered, from the
Company's financial advisor with respect to the consideration proposed to
be received by the Company's stockholders pursuant to such proposal, or (B)
the Company has determined to seek an amendment to its Articles of
Incorporation or the voluntary liquidation, dissolution or winding up of
the Company, or (vi) a Person who, together with its Affiliates and
Associates, becomes the Beneficial Owner of 10% or more of the shares of
Common Stock of the Company then outstanding solely as a result of a
reduction in the number of shares of Common Stock of the Company
outstanding due to the repurchase of shares of Common Stock of the Company
by the Company, unless and until such time as such Person shall purchase or
otherwise become (as a result of actions taken by such Person or its
Affiliates or Associates) the Beneficial Owner of additional shares of
Common Stock of the Company constituting 1% or more of the then outstanding
shares of Common Stock of the Company.
(t) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(u) "Final Expiration Date" shall mean the Close of
Business on February 13, 2008.
(v) "Original Rights" shall mean Rights acquired by a
Person or such Person's Affiliates or Associates prior to the Distribution
Date or issued pursuant to Section 3(a) or Section 22 hereof.
(w) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity and includes without limitation an
unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose
or act.
(x) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(y) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(z) "Record Date" shall have the meaning set forth in the
First "WHEREAS" clause at the beginning of this Agreement.
(aa) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(bb) "Rights" shall have the meaning set forth in the First
"WHEREAS" clause at the beginning of this Agreement.
(cc) "Rights Agent" shall mean the Person named as the
"Rights Agent" in the first paragraph of this Agreement until a successor
Rights Agent shall have become such pursuant to the applicable provisions
hereof, and thereafter "Rights Agent" shall mean such successor Rights
Agent. If at any time there is more than one Person appointed by the
Company as Rights Agent pursuant to the applicable provisions of this
Agreement, "Rights Agent" shall mean and include each such Person.
(dd) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(ee) "Rights Dividend Declaration Date" shall have the
meaning set forth in the First "WHEREAS" clause at the beginning of this
Agreement.
(ff) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(gg) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(hh) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(ii) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(jj) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has become
such.
(kk) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority of
the board of directors or other persons performing similar functions of
such corporation or other entity are at the time directly or indirectly
beneficially owned or otherwise controlled by such Person and any Affiliate
or Associate of such Person.
(ll) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(mm) "Summary of Rights" shall have the meaning set forth
in Section 3(b) hereof.
(nn) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(oo) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company has
appointed the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock of the Company)
in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable, upon ten days'
prior written notice to the Rights Agent. The Rights Agent shall have no
duty to supervise, and in no event shall be liable for, the acts or
omissions of any such Co-Rights Agent. In the event that the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine, and
any actions which may be taken by the Rights Agent pursuant to the terms of
this Agreement may be taken by any such Co-Rights Agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after
the Stock Acquisition Date (or, if the tenth Business Day (or such later
date) after the Stock Acquisition Date occurs before the Record Date, the
Close of Business on the Record Date) or (ii) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after
the date that a tender or exchange offer by any Person is first published
or sent or given within the meaning of Rule 14d-2(a) of the General Rules
and Regulations under the Exchange Act if upon consummation thereof such
Person would be the Beneficial Owner of 10% or more of the Common Stock of
the Company then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraphs (b) and (c) of this Section 3) by
the certificates for the Common Stock of the Company registered in the
names of the holders thereof (which certificates shall be deemed also to be
certificates for Rights) and not by separate certificates and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock of the Company (including a transfer to
the Company). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock of the Company as of the Close of
Business on the Distribution Date, at the address of such holder shown on
the records of the Company, one or more rights certificates, substantially
in the form attached hereto as Exhibit A (the "Rights Certificates"),
evidencing one Right for each share of Common Stock of the Company so held,
subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Common Stock of the Company has been
made pursuant to Section 11(i) hereof, at the time of distribution of the
Rights Certificates, the Company shall not be required to issue Rights
Certificates evidencing fractional Rights, but may, in lieu thereof, make
the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) The Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of
the Common Stock of the Company who may so request from time to time. With
respect to certificates for the Common Stock of the Company outstanding as
of the Record Date, as set forth in paragraph (a) above, until the earlier
of the Distribution Date or the Expiration Date, the Rights will be
evidenced by such certificates for the Common Stock of the Company with or
without a copy of the Summary of Rights attached and the registered holders
of the Common Stock of the Company shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date, the transfer of any certificates representing shares of
Common Stock of the Company in respect of which Rights have been issued
shall also constitute the transfer of the Rights associated with such
shares of Common Stock of the Company.
(c) Rights shall be issued in respect of all shares of
Common Stock of the Company which 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 and, to the extent provided
in Section 22 hereof, in respect of shares of Common Stock of the Company
issued after the Distribution Date and prior to the Expiration Date.
Certificates representing such shares of Common Stock of the Company shall
also be deemed to be certificates for Rights, and shall, to the extent
reasonably practicable following the Record Date, bear the following
legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between ▇▇▇▇ Burnie Bancorp (the "Company") and The Bank of ▇▇▇▇
Burnie (the "Rights Agent") dated as of February 13, 1998, as the
same may be amended, restated, renewed or extended from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein 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 therefor. Under certain
circumstances set forth in the Rights Agreement, Rights
beneficially owned (as such term is defined in the Rights
Agreement) by any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void. The Rights shall not be exercisable, and shall be
void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall
not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock of the Company represented by such
certificates shall be evidenced by such certificates alone, and registered
holders of Common Stock of the Company shall also be the registered holders
of the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock of the Company represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate contained therein to be printed on the
reverse thereof) shall each be substantially in the form attached hereto as
Exhibit A and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed,
or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders
thereof to purchase such number of shares of Common Stock of the Company as
shall be set forth therein at the exercise price set forth therein (such
exercise price per share of Common Stock of the Company, as adjusted from
time to time hereunder, the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in the Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a
transfer which the Board, in its sole discretion, has determined is part of
a plan, arrangement or understanding which has as a primary purpose or
effect avoidance of the provisions of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed under seal on
behalf of the Company by its Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and by the
Treasurer or any Assistant Treasurer of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually
countersigned by an authorized signatory of the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by an
authorized signatory of the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by an
authorized signatory of the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall
be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Rights 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 shares of Common Stock of the Company (or, following the
occurrence of a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Rights 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 shall
make such request in writing delivered to the Rights Agent and shall
surrender the Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged, with the forms of assignment and
certificate contained therein duly executed, at the principal office or
offices of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate or Rights Certificates until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate or Rights Certificates and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon, the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate
or Rights Certificates, as the case may be, as so requested. The Company
may require payment from the holder of a Rights Certificate of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(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 valid Rights Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably 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) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein, including without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part at any time after
the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate contained therein 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 with respect to the total number of shares of
Common Stock of the Company (or, following the occurrence of a Triggering
Event, 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
earliest of (i) the Final Expiration Date, (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof and (iii) the time at
which the Rights expire pursuant to Section 13(d) hereof (the earliest of
(i), (ii) and (iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock of
the Company pursuant to the exercise of a Right shall initially be $100,
shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate contained therein duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price, as such amount
may be reduced pursuant to Section 11(a)(iii) hereof, for each share of
Common Stock of the Company (or, following a Triggering Event, for other
securities, cash or other assets, as the case may be) to be purchased (as
set forth below) and an amount equal to any applicable transfer tax, the
Rights Agent shall, subject to Sections 7(f) and 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of
Common Stock of the Company (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of shares
of Common Stock of the Company to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests
or (B) if the Company shall have elected to deposit the total number of
shares of Common Stock of the Company issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of shares of Common Stock of
the Company as are to be purchased (in which case certificates for the
shares of Common Stock of the Company represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
will direct the depositary 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 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to, or upon the order of, the registered holder of such 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) hereof) shall be made in cash or by certified check,
cashier's check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other securities, pay cash or
distribute other property pursuant to this Section 7(c) or Section 11(a)
hereof, 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. In the event that, immediately
prior to the occurrence of a Distribution Date, the number of shares of
Common Stock of the Company which are authorized by the Company's articles
of incorporation, as amended and in effect at such time, but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit exercise in full of the Rights in
accordance with their terms, the Company, acting by resolution of the
Board, shall follow the same procedures and may take any of the same
actions in connection with the exercise of Rights under this Section 7(c)
as are required or permitted to be followed or taken pursuant to Section
11(a)(iii) hereof with respect to substitution of value in connection with
the exercise of Rights under Section 11(a)(ii) hereof. 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 of the Company would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person which the Board, in its sole
discretion, determines is or was involved in or caused or facilitated,
directly or indirectly (including through any change in the Board), such
Section 11(a)(ii) Event, (ii) a transferee of any such Acquiring Person (or
of any such Affiliate or Associate) who becomes a transferee after such
Acquiring Person becomes such or (iii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with such Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has
any continuing agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer which the Board
has determined is part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other Person as a result
of its failure to make any determinations with respect to an Acquiring
Person or any of their Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Rights
Certificate upon the occurrence of any purported assignment or exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of assignment or
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such assignment or exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates and, in such case,
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that, from and after
the Distribution Date, it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock of the Company (and,
following the occurrence of a Triggering Event, other securities) or out of
its authorized and issued shares of Common Stock of the Company held in its
treasury, the number of shares of Common Stock of the Company (and,
following the occurrence of a Triggering Event, the amount of other
securities) that, as provided in this Agreement (including Section
11(a)(iii) hereof), will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Common Stock of the Company
(and, following the occurrence of a Triggering Event, other securities)
issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange, the Company shall use all 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 upon official notice of issuance upon such exercise.
(c) The Company shall use all reasonable efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Triggering Event in which the consideration to be delivered
by the Company upon exercise of the Rights has been determined in
accordance with this Agreement, or as soon as required by law following the
Distribution Date, as the case may be, a registration statement under the
Act on an appropriate form with respect to the Common Stock or other
securities purchasable upon exercise of the Rights, (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 securities or "blue sky" laws of the various states
and other jurisdictions in connection with the exercisability of the
Rights. The Company may, acting by resolution of the Board, temporarily
suspend, for a period of time not to exceed 90 days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a public announcement at such time as the suspension is no longer in
effect. In addition, if the Company shall determine that a registration
statement is required in other circumstances following the Distribution
Date, the Company may similarly temporarily suspend the exercisability of
the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained,
or the exercise thereof shall not otherwise be permitted under applicable
law or a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common Stock
of the Company (and, following the occurrence of a Triggering Event, other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that, except
as set forth in Section 6(a) hereof and this Section 9(e), it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of shares of Common Stock
of the Company (or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a
number of shares of Common Stock of the Company (or other securities, as
the case may be) in respect of a name other than that of, the registered
holder of the Rights Certificates evidencing Rights surrendered for
exercise, nor shall the Company be required to issue or deliver any
certificates for a number of shares of Common Stock of the Company (or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Record Date for Securities Issued Upon Exercise.
Each Person in whose name any certificate for a number of shares of Common
Stock of the Company (or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of such shares of Common Stock of the Company (or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided, however, that
if the date of such surrender and payment is a date upon which the transfer
books for the Common Stock (or other securities, as the case may be) of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which the transfer
books for the Common Stock (or other securities, as the case may be) of the
Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate, as such, shall not be entitled to any
rights of a stockholder of the Company (or the Principal Party) with
respect to shares for which the Rights shall be exercisable, including
without limitation the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company (or the
Principal Party), except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
shares, or fractions thereof, purchasable upon exercise of each Right and
the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Company ▇▇▇▇▇▇▇ any time after the
date of this Agreement (A) declare a dividend on the outstanding shares of
Common Stock of the Company payable in shares of Common Stock of the
Company, (B) subdivide or split the outstanding shares of Common Stock of
the Company, (C) combine or consolidate the outstanding shares of Common
Stock of the Company into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Common Stock of
the Company (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision, split,
combination, consolidation or reclassification, and the number and kind of
shares of Common Stock (or other securities, as the case may be) issuable
on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall 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, which, if such
Right had been exercised immediately prior to such date, whether or not
such Right was then exercisable, and at a time when the transfer books for
the Common Stock (or other capital stock, as the case may be) of the
Company were open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, split, combination,
consolidation or reclassification. If an event occurs which would require
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event")
that any Person (other than an Exempt Person), alone or together
with its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become the Beneficial Owner of
10% or more of the shares of Common Stock of the Company then
outstanding, unless the event causing (A) the 10% threshold to be
crossed is a transaction set forth in Section 13(a) hereof or
(B) is an acquisition of shares of Common Stock of the Company
pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock of the Company at a price and
on terms determined by at least a majority of the Continuing
Outside Directors, after receiving advice from one or more
investment banking firms, to be (x) at a price that is fair to
stockholders (taking into account all factors which such
Continuing Outside Directors deem relevant, including without
limitation prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value) and (y) otherwise in the best interests of
the Company and its stockholders, then promptly after the date of
occurrence of a Section 11(a)(ii) Event, proper provision shall
be made so that each holder of a Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of
shares of Common Stock of the Company as shall equal the result
obtained by (1) multiplying the then current Purchase Price by
the then number of shares of Common Stock of the Company for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event (whether or not such
Right was then exercisable) and (2) dividing that product (which
following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of
Common Stock of the Company on the date of such first occurrence
(such number of shares being referred to as the "Adjustment
Shares"), provided, however, that if the quotient obtained by
dividing the Purchase Price (as in effect immediately following
such first occurrence) by the number of Adjustment Shares is less
than 10, then the number of Adjustment shares shall be reduced to
the extent necessary so that such quotient shall be equal to 10.
(iii) In lieu of issuing any shares of Common Stock
of the Company in accordance with Section 11(a)(ii) hereof, the
Company, acting by resolution of the Board, may, and in the event
that the number of shares of Common Stock of the Company which
are authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, acting by
resolution of the Board, shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price
attributable to each Right (such excess being referred to as the
"Spread") and (B) with respect to all or a portion of each Right
(subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) equity securities of the Company other than
Common Stock of the Company (such equity securities being
referred to as "Common Stock Equivalents")), (4) debt securities
of the Company, (5) other assets or (6) any combination of the
foregoing which, when added to any shares of Common Stock of the
Company issued upon such exercise, has an aggregate value equal
to the Current Value, where such aggregate value has been
determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board;
provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within 30 days following the later of (x) the first occurrence of
a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) hereof, as such
date may be extended pursuant to Section 23(a) hereof or amended
pursuant to Section 27 hereof, expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock of the Company (to
the extent available) and then, if necessary, cash, which shares
and cash have an aggregate value equal to the Spread. If the
Board shall determine in good faith that it is likely that
sufficient additional shares of Common Stock of the Company 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)
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be
taken pursuant to the first or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended and a public announcement at such time
as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock of the Company
shall be the Current Market Price per share of the Common Stock
of the Company on the Section 11(a)(ii) Trigger Date, and the
value of any Common Stock Equivalent shall be deemed to be equal
to the value of the Common Stock of the Company on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock of
the Company entitling them to subscribe for or purchase (for a period
expiring within 45 calendar days after such record date) Common Stock of
the Company or securities convertible into Common Stock of the Company or
Common Stock Equivalents at a price per share of Common Stock of the
Company or per share of Common Stock Equivalents (or having a conversion
price per share, if a security convertible into Common Stock of the Company
or Common Stock Equivalents) less than the Current Market Price per share
of Common Stock of the Company on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the sum of (i) the number of
shares of Common Stock of the Company or Common Stock Equivalents
outstanding on such record date, (ii) the number of shares of Common Stock
of the Company or Common Stock Equivalents underlying securities
outstanding on such record date which are convertible into Common Stock of
the Company or Common Stock Equivalents and (iii) the number of shares of
Common Stock of the Company which the aggregate subscription price of the
total number of shares of Common Stock of the Company 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 the denominator of which shall be the sum of (i) the
number of shares of Common Stock of the Company outstanding on such record
date, (ii) the number of shares of Common Stock of the Company or Common
Stock Equivalents underlying securities outstanding on such record date
which are convertible into Common Stock of the Company or Common Stock
Equivalents and (iii) the number of additional shares of Common Stock of
the Company 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 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 shall be as determined in good faith
by the Board, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. Shares of
Common Stock of the Company owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed, and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock of the Company (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences
of indebtedness, cash (other than a regular, periodic cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock of the Company, but including any dividend
payable in stock other than Common Stock of the Company) or subscription
rights or warrants (excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock of the Company on such record date,
less the fair market value (as determined in good faith by the Board, which
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common Stock of
the Company and the denominator of which shall be such Current Market Price
per share of Common Stock of the Company. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to
be the Purchase Price which would have been in effect if such record date
had not been fixed.
(d) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common
Stock for the 10 consecutive Trading Days immediately following 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 (A) 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 (B) any subdivision, combination, consolidation, reverse stock
split or reclassification of such Common Stock, and prior to the expiration
of the requisite 30-Trading Day or 10-Trading Day period, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination, consolidation, reverse stock
split or reclassification, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated
transaction reporting system or as quoted by the Nasdaq National Market
with respect to securities listed or admitted to trading on another
national securities exchange or quoted by the Nasdaq National Market,
respectively or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange or quoted by the Nasdaq
National Market, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by The Nasdaq Stock Market or such other quotation 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. If on any such date the Common Stock is not
publicly held or not so listed, admitted to trading or quoted, and no
market maker is making a market in such Common Stock, Current Market Price
shall mean the fair value of such shares on such date as determined in good
faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease in the Purchase Price of at least one
percent; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest one cent or to the nearest
one-thousandth of a share of Common Stock of the Company as the case may
be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other than Common Stock of the Company, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof (or the number of Rights) shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock of the Company contained
in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (l) and (m)
hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Common Stock of the Company shall apply on like terms to any
such other shares; provided, however, that the Company shall not be liable
for its inability to reserve and keep available for issuance upon exercise
of the Rights pursuant to Section 11(a)(ii) hereof a number of shares of
Common Stock of the Company greater than the number then authorized by the
Company's articles of incorporation, but not outstanding or reserved for
any other purpose.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of shares of
Common Stock of the Company purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock of the Company
(calculated to the nearest one-thousandth of a share of Common Stock)
obtained by (i) multiplying (x) the number of shares of Common Stock of the
Company 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 shares of Common Stock of the Company
purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of shares of Common Stock of the Company for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of that number of Rights shall become the
number of Rights (calculated to the nearest one-thousandth of a Right)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make
a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock of the Company
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per share of Common Stock of the Company and the number of shares
Common Stock of the Company which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated or par value, if any, of
the number of shares of Common Stock of the Company issuable upon exercise
of the Rights, the Company shall use all reasonable efforts to take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue, fully paid and
nonassessable, such number of shares of Common Stock of the Company at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence
of such event the issuance to the holder of any Right exercised after such
record date of the number of shares of Common Stock of the Company or other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of shares of Common Stock of the Company
or other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments 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 shall determine to be advisable in order that any (i) consolidation
or subdivision of the Common Stock of the Company, (ii) issuance wholly for
cash of any shares of Common Stock of the Company at less than the Current
Market Price, (iii) issuance wholly for cash of shares of Common Stock of
the Company or securities which by their terms are convertible into or
exchangeable for shares of Common Stock of the Company, (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 shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof) or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof) if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Common Stock of the Company, a copy of such
certificate and (c) mail a brief summary thereof to each record holder of a
Rights Certificate (or, if prior to the Distribution Date, to each record
holder of a certificate representing shares of Common Stock of the Company)
in accordance with Section 25 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to prepare such certificate or
statement or make such filings or mailings shall not affect the validity
of, or the force or effect of, the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received
such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event (a "Section 13 Event") that, on or after
the Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other
Person or Persons (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof) and the Company shall not be the
continuing or surviving corporation of such consolidation, combination or
merger, (y) any Person or Persons (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof) shall
consolidate or otherwise combine with, or merge with or into, the Company
and the Company shall be the continuing or surviving corporation of such
consolidation, combination or merger and, in connection with such
consolidation, combination or merger, all or part of the outstanding shares
of Common Stock of the Company shall be changed into or exchanged for stock
or other securities of any other Person or Persons or cash or any other
property or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole and calculated on the basis of the
Company's most recent regularly prepared financial statements) to any
Person or Persons (other than the Company or any Subsidiary of the Company
in one or more transactions each of which complies with Section 11(o)
hereof); provided, however, that this clause (z) of Section 13(a) hereof
shall not apply to the pro rata distribution by the Company of assets
(including securities) of the Company or any of its Subsidiaries to all
holders of Common Stock of the Company; then, and in each such case (except
as may be contemplated by Section 13(d) hereof), proper provision shall be
made so that: (i) each holder of a Right, except as provided in Section
7(e) hereof, shall, on or after the later of (A) the date of the first
occurrence of any such Section 13 Event or (B) the date of the expiration
of the period within which the Rights may be redeemed pursuant to Section
23 hereof (as the same may be extended pursuant to Section 23(a) hereof or
amended pursuant to Section 27 hereof), thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of shares of Common Stock of the Company 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 shares of
Common Stock of the Company 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, shall be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price per
share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) the shares of Common Stock of
such Principal Party received by each holder of a Right upon exercise of
that Right shall be fully paid and nonassessable; (iii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iv) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions
of Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (v) such Principal Party shall take
such steps (including without limitation 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
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (vi) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof,
(A) the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted, changed or
exchanged in such merger, consolidation or combination (or, if
there is more than one such issuer, the issuer the Common Stock
of which has the greatest market value) or (B) if no securities
are so issued, the Person that is the other party to such merger
(and survives the merger), consolidation or combination (or, if
there is more than one such Person, the Person the Common Stock
of which has the greatest market value), or if the other party to
the merger does not survive the merger, the Person that does
survive the merger (including the Company, if it survives); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such transaction
or transactions or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving
the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of Common
Stock having the greatest market value;
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
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" shall refer
to such other Person; (2) if the Common Stock of such Person is not and has
not been so registered and such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value; and (3) if the Common Stock of such Person
is not and has not been so registered and such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
(1) and (2) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a Subsidiary of both
or all of such joint venturers, and the Principal Parties in each such
chain shall bear the obligations set forth in this Section 13 in the same
ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement confirming that the requirements of Section 13(a) and Section
13(b) hereof shall promptly be performed in accordance with their terms and
that such Section 13 Event shall not result in a default by the Principal
Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Section 13(a) and Section 13(b) hereof and
further providing that, as soon as practicable after the date of any such
Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement
under the 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 Expiration
Date and to similarly comply with applicable state securities
laws;
(ii) use its best efforts to list or obtain
quotation of (or continue the listing or quotation of) the Rights
and the securities purchasable upon exercise of the Rights on a
national securities exchange or by an automated quotation
service;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) use its best efforts to obtain waivers of any
rights of first refusal or preemptive rights in respect of the
shares of Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, combinations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 hereof shall not be applicable to a transaction
described in subparagraph (x) or subparagraph (y) of Section 13(a) hereof
if (i) such transaction is consummated with a Person or Persons (or a
wholly owned Subsidiary of any such Person or Persons) who acquired shares
of Common Stock of the Company pursuant to a tender offer or exchange offer
for all outstanding shares of Common Stock of the Company which complies
with the exception provided for in Section 11(a)(ii) hereof, (ii) the price
per share of Common Stock of the Company offered in such transaction is not
less than the price per share of Common Stock of the Company paid to all
holders of shares of Common Stock of the Company whose shares were
purchased pursuant to such tender offer or exchange offer and (iii) the
form of consideration being offered to the remaining holders of shares of
Common Stock of the Company pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender offer or exchange offer.
Upon consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i)
hereof, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of any such fractional Rights, there shall 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
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any Trading Day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system or the Nasdaq National Market with respect to
securities listed on another national securities exchange or quoted by the
Nasdaq National Market, respectively, or if the Rights are not listed or
admitted to trading on any national securities exchange or quoted by the
Nasdaq National Market, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by The Nasdaq Stock Market or such other quotation
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of
shares of Common Stock of the Company upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock of
the Company. In lieu of fractional shares of Common Stock of the Company,
the Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one share of Common
Stock of the Company. For purposes of this Section 14(b), the current
market value of one share of Common Stock of the Company shall be the
closing price of a share of Common Stock of the Company, or if unavailable,
the appropriate alternative price (in each case, as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of that Right
expressly waives such holder's 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, other than rights of action vested in the Rights Agent
in Section 18 hereof, are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock of the Company); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of
the Common Stock of the Company), 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 of the Company), may, in the
holder's own behalf and for the holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, the holder's 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 shall be
entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock
of the Company;
(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
contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
certificate for Common Stock of the Company) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificate or the
associated certificate for Common Stock of the Company made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or by reason of any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, that the Company must use its reasonable
efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
shares of Common Stock of the Company or any other securities of the
Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, reimbursement for 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 hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in good faith in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock of the
Company or for other securities of the Company or upon any instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or
document reasonably 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 corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer business of
the Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. If
at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and if at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all
such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 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 thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel, and
the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including without limitation the identity of any Acquiring
Person and the determination of Current Market Price) be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President and Chief Executive Officer, 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 shall be
full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates, nor shall it be required to verify the same
(except as to its countersignature on such Rights Certificates), but all
such statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereon); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock of the Company to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock of the Company will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President and Chief Executive Officer,
or any Executive Vice President of the Company and to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken by, or omission of, the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in
such application (which date shall not be less than five Business Days
after the date the Company actually receives such application, unless the
Company shall have consented in writing to an earlier date) unless, prior
to taking any such action (or prior to the effective date in the case of an
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company, 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 the
Rights Agent were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct; provided,
however, reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than
internal costs incurred by the Rights Agent in providing services to the
Company in the ordinary course of its business as Rights Agent) or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate contained in
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 clause 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or 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 of the Company by registered or
certified mail and to the holders of the Rights Certificates, if any, 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 of the Company by registered or certified mail and to the
holders of the Rights Certificates, if any, by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then
any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. If no
successor Rights Agent shall have been appointed within 30 days from the
effectiveness of such removal, resignation or incapacity and no registered
holder of any Rights Certificate has applied pursuant to this Agreement for
the appointment of a new Rights Agent, the Company automatically shall be
designated as successor Rights Agent. Any successor Rights Agent appointed
by the Company or by such a court shall be (a) a corporation organized and
doing business under the laws of the United States or of any state of the
United States, in good standing, which is authorized to do business as a
banking institution in such state, is authorized under such laws to
exercise corporate trust powers, is subject to supervision or examination
by federal or state authority and has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100,000,000 or (b)
an Affiliate of a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder and shall execute and deliver, if
applicable, any further assurance, conveyance, act or deed necessary for
that purpose. Not later than the effective date of any such appointment,
the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock of the Company,
and shall mail a notice thereof in writing to the registered holders of the
Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved by
the Board to reflect any adjustment or change in the Purchase Price and the
number or kind 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 of the Company following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock of the Company so issued
or sold pursuant to the exercise of stock options or under any employee
plan or arrangement or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if and to the extent that the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Rights
Certificate would be issued and (ii) no such Rights Certificate shall be
issued if and to the extent that appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board
before the Rights cease being redeemable) following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior to the
Record Date, the Close of Business on the tenth Business Day following the
Record Date) or (ii) the Final Expiration Date, direct the Company to, and
if directed, the Company shall, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price")
provided, however, if the Board authorizes redemption of the Rights in
either of the circumstances set forth in clauses (i) or (ii) below, then
there must be Continuing Outside Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Outside Directors: (i) such authorization occurs on or after the
time a Person becomes an Acquiring Person, or (ii) such authorization
occurs on or after the date of a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the commencement
of such solicitation, if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such solicitation,
a majority of the Board has determined in good faith) that such Person (or
any of its Affiliates or Associates) intends to take, or may consider
taking, any action which would result in such Person becoming an Acquiring
Person or which would cause the occurrence of a Triggering Event unless,
concurrent with such solicitation, such Person (or one or more of its
Affiliates or Associates) is making a tender offer or exchange offer in
compliance with Section 11(a)(ii)(B). Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as
the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board directing the
Company to make the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate, and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Board directing the Company to make the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to each
record holder of the Common Stock of the Company at the address of such
holder shown on the records of the Company. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Board may at its option, at any time on or after a
Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares of Common
Stock at an exchange ratio of 1.5 shares of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock which
are authorized by the Company's Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit any exchange of the Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of Rights
with regard to which such fractional shares of Common Stock would otherwise
be issuable an amount in cash equal to the same fraction of the value of a
whole share of Common Stock. For purposes of this subsection (d), the
value of a whole share of Common Stock shall be the closing price (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Common Stock of the Company or to make any other
distribution to the holders of Common Stock of the Company (other than a
regular periodic cash dividend out of earnings or retained earnings of the
Company), (ii) to offer to the holders of Common Stock of the Company
rights or warrants to subscribe for or to purchase any additional shares of
Common Stock of the Company or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of the
Common Stock of the Company (other than a reclassification involving only
the subdivision or split of outstanding shares of Common Stock of the
Company), (iv) to effect any consolidation, combination or merger into or
with any other Person or Persons (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), 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) hereof) or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
combination, 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 of the Company, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Common Stock of the Company 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 of
the Company, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible in
accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references
in the preceding paragraph to Common Stock of the Company shall be deemed
thereafter to refer to, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
▇▇▇▇ Burnie Bancorp
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
The Bank of ▇▇▇▇ Burnie
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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 any certificate
representing shares of Common Stock of the Company) shall be sufficiently
given or made if sent by first-class mail, insured, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. Subject to the
penultimate sentence of this Section 27 and with the consent of the Rights
Agent, this Agreement may be supplemented or amended at the times and for
the purposes set forth below; provided, however, that no proposed
supplement or amendment to this Agreement shall be effective unless (i)
there are Continuing Outside Directors and (ii) a majority of such
Continuing Outside Directors, at a meeting of the Board duly called and
held, votes in favor of the adoption of such proposed supplement or
amendment. Prior to the Distribution Date and subject to the first and
penultimate sentences of this Section 27, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing
shares of Common Stock of the Company. From and after the Distribution
Date and subject to the first and penultimate sentences of this Section 27,
the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); provided, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed or
to modify the ability (or inability) of the Company to redeem the Rights,
in either case at such time as the Rights are not then redeemable or (B)
any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, or the benefits to, the
holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate that
is signed by a Continuing Outside Director and which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common
Stock of the Company.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Determinations and Actions by the Board, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock of the Company outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of the Company of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board (with, where specifically provided for herein, the concurrence of
the Continuing Outside Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board (with, where specifically provided
for herein, the concurrence of the Continuing Outside 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 or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including without limitation for
purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (with, where specifically provided for
herein, the concurrence of the Continuing Outside Directors) or the Company
in good faith, shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties and (y)
not subject the Board or the Continuing Outside Directors to any liability
to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock of the Company) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock of the Company).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth Business Day following the date of such
determination by the Board.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract under
seal made under the laws of the State of Maryland, and for all purposes
this Agreement shall be governed by and construed in accordance with the
laws of the State of Maryland applicable to contracts made and to be
performed entirely within the State of Maryland.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
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.
▇▇▇▇ BURNIE BANCORP
By: /s/ F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
______________________________________
Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Title: President and Chief
Executive Officer
ATTEST:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
of Directors of
▇▇▇▇ Burnie Bancorp
THE BANK OF ▇▇▇▇ BURNIE, as Rights Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
ATTEST:
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board
of Directors of
▇▇▇▇ Burnie Bancorp
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 13, 2008, SUBJECT TO EARLIER REDEMPTION OR
EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. THE RIGHTS EVIDENCED BY THIS
CERTIFICATE SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY
A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN
SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Rights Certificate
▇▇▇▇ BURNIE BANCORP
This certifies that , or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of February 13, 1998, as
amended, restated, renewed or extended from time to time (the "Rights
Agreement"), between ▇▇▇▇ Burnie Bancorp, a Maryland corporation (the
"Company"), and The Bank of ▇▇▇▇ Burnie (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 P.M. (New York City time) on
February 13, 2008, at the office or offices of the Rights Agent, or its
successors as Rights Agent, designated for such purpose, one fully paid,
nonassessable share of common stock, par value $10.00 per share, of the
Company (the "Common Stock"), at a purchase price of $100 per share (the
"Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and included Certificate
duly completed and executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares of Common Stock which may be
purchased upon exercise thereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of February 13,
1998, based on the Common Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event
(as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Common Stock will be issued.
As more fully set forth in the Rights Agreement, from and after
the first occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person (as such terms are defined in
the Rights Agreement), which is determined to have been involved in or
caused or facilitated, directly or indirectly, such Section 11(a)(ii)
Event, (ii) a transferee of such Acquiring Person (or of any such Associate
or Affiliate) or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of such Acquiring Person (or of any such Associate
or Affiliate who becomes a transferee prior to or concurrently with such
Acquiring Person becoming such), such Rights shall become null and void
without any further action, and no holder hereof shall have any right with
respect to such Rights whether under the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Common Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events (as defined in the Rights
Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Reference is also made to
the Rights Agreement for definitions of capitalized terms used and not
defined herein. Copies of the Rights Agreement are on file at the above-
mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of
Common Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right at any time prior to the earlier of
(i) the Close of Business on the tenth Business Day following the Stock
Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement) and (ii) the Final Expiration Date (as defined in the
Rights Agreement).
If the Company so determines, no fractional shares of Common
Stock will be issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of one share of
Common Stock (which may, at the election of the Company, be evidenced by
depository receipts)), but in lieu thereof, a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of
shares of Common Stock or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividend or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ___________________, ____
ATTEST: ▇▇▇▇ BURNIE BANCORP
By: ___________________ By: ___________________________
Secretary Title:
Countersigned:
THE BANK OF ▇▇▇▇ BURNIE
By: ____________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
herein, and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Rights Certificate on the books of
the within-named Company, with full power of substitution.
Dated: ___________________, ____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate ( ) is ( ) is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned ( ) did ( ) did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated:_________________, ____
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: ▇▇▇▇ BURNIE BANCORP
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the shares of
Common Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable or
such other assets which may be deliverable upon the exercise of the Rights)
and requests that certificates for any such shares or securities be issued
in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying number:
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying number:
Dated:__________________, ____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate ( ) are ( )
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned ( ) did ( ) did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:_________________, ____
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Exhibit B
FORM OF UNDERTAKING
WHEREAS, [name of beneficial owner] (the "Stockholder") is the
Beneficial Owner of ____ shares of Common Stock of the Company;
WHEREAS, in accordance with the definition of "Exempt Person" set
forth in Section 1(s)(v) of the Rights Agreement (the "Rights Agreement"),
dated February 13, 1998, between the Company and the Rights Agent, the
Stockholder hereby undertakes and agrees to the following:
1. The Stockholder shall cause all Excess Voting Shares to be
present in person or by proxy at any Annual or Special Meeting of
Stockholders of the Company called to consider the Significant
Event contemplated by the Undertaking Request.
2. The Stockholder shall cause all Excess Voting Shares which
it has the right to vote, to be voted on any Significant Event
[in accordance with the recommendation of the Board of Directors
of the Company] [in the same proportion as the votes cast by all
other stockholders with respect to such Significant Event]*.
* Person executing this undertaking shall delete one of the two
bracketed clauses.
The Stockholder and the Company agree that irreparable damage
would occur in the event that the provisions contained in this undertaking
are not performed in accordance with their specific terms or are otherwise
breached. It is accordingly agreed that the parties shall be entitled to
an injunction or injunctions to prevent breaches of this undertaking and to
enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to
any other remedy to which they are entitled at law and equity. Both
parties agree not to oppose injunctive relief.
As used in this undertaking, the following terms have the
meanings indicated:
"Aggregate Voting Shares" means the number of shares of Common
Stock that the Stockholder shall be deemed to "beneficially own" in
accordance with Section 1(f) of the Rights Agreement.
"Excess Voting Shares" means the number of Aggregate Voting
Shares less the amount of shares equal to ten percent of the number of
shares of Common Stock of the Company outstanding, rounded to the
nearest whole share.
"Significant Event" means any of the events or actions which
pursuant to the Company's Articles of Incorporation require approval
by the affirmative vote of the holders of not less than 80% of the
shares of Common Stock outstanding and which is the subject of the
Undertaking Request.
Terms used in this undertaking and not defined herein shall have
the meanings assigned to such terms in the Rights Agreement.
IN WITNESS WHEREOF, the Stockholder and the Company have caused
this undertaking to be duly executed by their respective officers, each of
whom is duly authorized, as of this ____ day of _____, 1998.
[STOCKHOLDER]
By: _____________________
Name:
Title:
ATTEST:
By: ______________________
Name:
Title:
▇▇▇▇ BURNIE BANCORP
By:
Name:
Title:
ATTEST:
By: ______________________
Name:
Title:
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On February 13, 1998, the Board of Directors of ▇▇▇▇ Burnie
Bancorp (the "Company") declared a dividend distribution of one Right for
each outstanding share of Company Common Stock to stockholders of record at
the close of business on February 13, 1998. Each Right entitles the
registered holder to purchase from the Company one share of Common Stock on
the date of exercise, at a Purchase Price of $100, subject to adjustment.
The terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and The Bank of ▇▇▇▇ Burnie, as Rights
Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock and a Distribution Date will occur upon the earlier of (i) 10 days
following a public announcement that a person (other than an Exempt Person)
or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 10% or
more of the outstanding shares of Common Stock (the "Stock Acquisition
Date") or (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 10% or more of such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and only with
such Common Stock certificates, (ii) new Common Stock certificates issued
after February 13, 1998 will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on February 13, 2008, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that at any time following the Rights Dividend
Declaration Date, a Person (other than an Exempt Person) becomes the
beneficial owner of 10% or more of the then outstanding shares of Common
Stock (except pursuant to an offer for all outstanding shares of Common
Stock which at least a majority of the Continuing Outside Directors
determined to be fair to and otherwise in the best interests of the Company
and its stockholders) each holder of a Right (other than Rights held by the
party triggering the Rights and certain transferees which are voided) will
thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company,
subject to certain limitations) having a value equal to two times the
exercise price of the Right. However, Rights are not exercisable following
the occurrence of the event set forth above until such time as the Rights
are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $100 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $200 worth of Common Stock (or other consideration, as noted
above) for $100. Assuming that the Common Stock had a per share value of
$30 at such time, the holder of each valid Right would be entitled to
purchase 6.67 shares of Common Stock for $100.
The Board may, at its option, at any time after a person becomes
an Acquiring Person, exchange all or part of the outstanding Rights (other
than Rights owned by an Acquiring Person, its affiliates, associates or
transferees, which will become void) for shares of Common Stock at an
exchange ratio of 1.5 shares of Common Stock per Right.
In the event that, at any time following the date that any Person
becomes an Acquiring Person, (i) the Company engages in certain mergers or
other business combination transactions or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of
the acquiring company having a value equal to two times the exercise price
of the Right.
The Purchase Price payable, and the number of shares of Common
Stock (or the number and kind of other securities or property, as the case
may be) issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the Common Stock,
(ii) if holders of the Common Stock are granted certain rights or warrants
to subscribe for Common Stock or convertible securities at less than the
current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends) or of subscription rights or
warrants (other than those referred to above).
No adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. The
Company is not required to issue fractional shares of Common Stock and in
lieu thereof an adjustment in cash will be made. For fractional shares of
Common Stock, the adjustment will be based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not
in part, at any time until ten days following the Stock Acquisition Date,
at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem
shall require the concurrence of a majority of the Continuing Outside
Directors. Immediately upon the action of the Board of Directors ordering
redemption of the Rights with, where required, the concurrence of the
Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 per Right redemption price.
The term "Continuing Outside Directors" means (i) members of the
Board of Directors who are not Acquiring Persons, or affiliates, associates
or representatives of an Acquiring Person, and who are not officers of the
Company or any of its subsidiaries, and were members of the Board of
Directors prior to the date of the Rights Agreement or (ii) Persons who
subsequently became members of the Board of Directors, who are not
Acquiring Persons or the affiliates, associates or representatives of an
Acquiring Person and who are not officers of the Company or any of its
subsidiaries, if such Persons' nominations for election or election to the
Board of Directors are recommended or approved by a majority of the
Continuing Outside Directors.
The term "Exempt Person" includes any Person who (i) as of the
date of the Rights Agreement, beneficially owns 10% or more of the
outstanding shares of Common Stock of the Company and who at no time after
the date of the Rights Agreement becomes the beneficial owner of 20% or
more of shares of Common Stock of the Company and (ii) upon the request of
the Company made in accordance with the requirements of the Plan, delivers
to the Company a written commitment agreeing to vote all shares of Common
Stock owned by such Person in excess of 10% of the outstanding shares of
Common Stock, at the election of such Person, either (A) in accordance with
the recommendation of the Board of Directors or (B) in the same proportion
as the votes cast by all other stockholders, in either case with respect to
matters which under the Company's Articles of Incorporation require the
affirmative vote of the holders of not less than 80% of the shares of the
Company's outstanding Common Stock.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
The Rights Agreement may be amended in certain instances so long
as there are Continuing Outside Directors and a majority of such Continuing
Outside Directors votes in favor of the proposed amendment. Other than
those provisions relating to the principal economic terms of the Rights,
any of the provisions of the Rights Agreement may be amended prior to the
Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended in order to cure any ambiguity, to make
changes which do not adversely affect the interest of holders of Rights
(excluding the interest of any Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemption shall be made at
such time as the Rights are not redeemable.
Copies of the Rights Agreement are available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.