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RIGHTS AGREEMENT
MERCANTILE BANCORPORATION INC.
AND
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
RIGHTS AGENT
DATED AS OF MAY --, 1998
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INDEX
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Page
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Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 3
Section 3. Issue of Right Certificates 3
Section 4. Form of Right Certificates 4
Section 5. Countersignature and Registration 5
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates 5
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights 6
Section 8. Cancellation and Destruction of Right Certificates 7
Section 9. Reservation and Availability of Shares of Preferred Stock 7
Section 10. Preferred Stock Record Date 8
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights 8
Section 12. Certificate of Adjusted Purchase Price or Number of Shares 13
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 13
Section 14. Fractional Rights and Fractional Shares 14
Section 15. Rights of Action 15
Section 16. Agreement of Right Holders 16
Section 17. Right Certificate Holder Not Deemed a Stockholder 16
Section 18. Concerning the Rights Agent 16
Section 19. Merger or Consolidation or Change of Name of Rights Agent 17
Section 20. Duties of Rights Agent 17
Section 21. Change of Rights Agent 19
Section 22. Issuance of New Right Certificates 19
Section 23. Redemption and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇
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Section 25. Notice of Proposed Actions 21
Section 26. Notices 22
Section 27. Supplements and Amendments 22
Section 28. Successors 22
Section 29. Benefits of this Agreement 22
Section 30. Severability 23
Section 31. Governing Law 23
Section 32. Counterparts 23
Section 33. Descriptive Headings 23
EXHIBIT A - Form of Certificate of Designation A-1
EXHIBIT B - Form of Right Certificate B-1
EXHIBIT C - Form of Summary of Preferred Stock Purchase Rights C-1
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RIGHTS AGREEMENT
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This Agreement, dated as of May , 1998, is entered into between
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MERCANTILE BANCORPORATION INC., a Missouri corporation (the "Company"), and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK (the "Rights Agent").
W I T N E S S E T H
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WHEREAS, on May , 1998, the Board of Directors of the Company
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authorized and declared a dividend distribution of one right (hereinafter
referred to as a "Right") for each share of Common Stock, $.01 par value, of
the Company outstanding at the close of business on June 4, 1998 (the "Record
Date") (other than shares of such Common Stock held in the Company's treasury
on such date) and has authorized the issuance of one Right in respect of each
share of Common Stock of the Company issued between the Record Date (whether
originally issued or issued from the Company's treasury) and the Distribution
Date (as such term is defined in Section 3 hereof), each Right representing
the right to purchase one one-hundredth of a share of Series B Junior
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designation attached
hereto as Exhibit A, upon the terms and subject to the conditions hereinafter
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set forth (the "Rights");
WHEREAS, the Company desires to appoint the Rights Agent to act
as provided herein, and the Rights Agent is willing to so act;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
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the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates (as hereinafter defined)
and Associates (as hereinafter defined) of such Person, without the prior
written approval of a majority of the Board of Directors, shall be the
Beneficial Owner (as hereinafter defined) of securities of the Company
constituting 20% or more of the Voting Power (as hereinafter defined) of the
Company or was such a Beneficial Owner at any time after the date hereof,
whether or not such Person continues to be the Beneficial Owner of securities
representing 20% or more of the Voting Power of the Company, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, any entity holding
securities of the Company to the extent organized, appointed or established
by the Company or any Subsidiary of the Company for or pursuant to the terms
of any such employee benefit plan. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of (i) an acquisition of
Common Stock by means of shares issued directly by the Company which
increases the proportionate Voting Power of such securities beneficially
owned by such Person to 20% or more of the Voting Power, where such
acquisition is approved by a majority of the Board of Directors; provided,
however, that such Person was not an Acquiring Person prior to such
acquisition of shares from the Company; (ii) an acquisition of voting
securities of the Company by the Company which, by reducing the amount of
such securities outstanding, increases the proportionate Voting Power of such
securities beneficially owned by such Person to 20% or more of the Voting
Power; provided, however, that if a Person becomes the Beneficial Owner of
securities constituting 20% or more of the Voting Power by reason of
purchases by the Company and shall, after such purchases by the Company,
become the Beneficial Owner of any additional voting securities of the
Company (other than pursuant to a stock dividend, stock split, capitalization
or similar transaction that does not affect the percentage of voting
securities beneficially owned by such person), then such Person shall be
deemed to be an Acquiring Person. Notwithstanding the foregoing, if a
majority of the Board of Directors then in office determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined
pursuant to this Section 1(a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of voting
securities of the Company so that such Person would no longer be
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an Acquiring Person, then such Person shall not be deemed to be an "Acquiring
Person" for purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule l2b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date hereof.
(c) A person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise, provided, however, that a Person shall not be deemed the
"Beneficial Owner" of 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 payment or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding, provided, however, that a Person shall not be deemed the
"Beneficial Owner" of any security under this clause (B) if the agreement,
arrangement or understanding to vote such securities (1) arises solely from a
revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (2) is not also then reportable by
such person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy or consent as described in clause (B) of subparagraph (ii)
of this paragraph (c)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the States of Missouri or
Illinois are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Central time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Central time, on the next succeeding
Business Day.
(f) "Common Stock" shall mean the Common Stock, $.01 par value,
of the Company, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock with the greatest
Voting Power of such Person or the equity securities or other equity interest
having power to control or direct the management of such Person or, if such
Person is a Subsidiary (as hereinafter defined) of another Person, of the
Person which ultimately controls such first-mentioned Person and which has
issued and outstanding such capital stock, equity securities or equity
interests.
(g) "Distribution Date" shall have the meaning defined in
Section 3 hereof.
(h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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(i) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity, and shall include any
successor (by merger or otherwise) of any such entity.
(j) "Preferred Stock" shall mean the Series B Junior
Participating Preferred Stock, no par value, of the Company.
(k) "Purchase Price" shall have the meaning defined in Section
4 hereof.
(l) "Stock Acquisition Date" shall mean the earlier of (i) the
first date of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such, or (ii) the date on which the Company
first has notice, direct or indirect, or otherwise determines that a Person
has become an Acquiring Person.
(m) "Subsidiary" shall mean any corporation or other entity of
which the securities or other ownership interests having ordinary Voting
Power, in the absence of contingencies, to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by another corporation or other entity and shall
include Subsidiaries of Subsidiaries, except that "Subsidiary" when used with
reference to the Company shall mean any corporation or other entity of which
either a majority of the Voting Power of the voting equity securities or a
majority of the equity interests is owned, directly or indirectly, by the
Company.
(n) "Voting Power" shall mean the Voting Power of all
securities of a Person then outstanding generally entitled to vote for the
election of directors of the Person (or, where appropriate, for the election
of persons performing similar functions).
Section 2. Appointment of Rights Agent. The Company hereby
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appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. In the event 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.
Section 3. Issue of Right Certificates.
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(a) Until the earlier of (i) the Close of Business on the tenth
day after the Stock Acquisition Date or (ii) the Close of Business on the tenth
day (or such later date as may be determined by action of a majority of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement of, or first public announcement
of the intent of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity holding securities of the Company to the extent
organized, appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such employee benefit plan) to
commence (which intention to commence remains in effect for five Business
Days after such announcement), without the prior written approval of a
majority of the Board of Directors, a tender or exchange offer which would
result in any Person becoming the Beneficial Owner of securities representing
20% or more of the Voting Power of the Company (including any such date which
is after the date of this Agreement and prior to the issuance of the Rights;
the earlier of such dates being herein referred to as the "Distribution
Date"): (x) the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be Right Certificates)
and not by separate Right Certificates, as more fully set forth below, and
(y) the Rights (and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the underlying shares of
Common Stock, as more fully set forth below. As soon as practicable after
the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Company shall prepare and execute, and the Rights
Agent shall
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countersign and send, at the expense of the Company, by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a right certificate, in substantially the form of
Exhibit B hereto (the "Right Certificate"), evidencing one Right for each share
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of Common Stock so held. As of and after the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form of Exhibit C hereto (the "Summary of
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Rights"), by first-class postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Record Date, at the address
of such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date until the
Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights), the Rights will be evidenced by such certificates
for the Common Stock registered in the names of the holders of the Common
Stock and the registered holders of the Common Stock shall also be registered
holders of the associated Rights. Until the Distribution Date (or the
earlier redemption, exchange, expiration or termination of the Rights), the
surrender for transfer of any of the certificates for the Common Stock
outstanding in respect of which Rights have been issued (with or without a
copy of the Summary of Rights attached thereto) shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued after the Record
Date but prior to the earlier of the Distribution Date or the redemption,
expiration or termination of the Rights shall be deemed also to be
certificates for Rights and shall have impressed, printed or written on, or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement between
Mercantile Bancorporation Inc. and the Rights Agent, the terms of which
are incorporated herein by reference and a copy of which is on file at the
principal executive offices of Mercantile Bancorporation Inc. 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. Mercantile Bancorporation Inc. will mail to the
holder of this certificate a copy of the Rights Agreement without charge
promptly following receipt of a written request therefor. Under certain
circumstances, Rights beneficially owned by Acquiring Persons (as defined
in the Rights Agreement) and any subsequent holder of such Rights, may
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date (or the earlier redemption, exchange,
expiration or termination of the Rights), the Rights associated with the
Common Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.
In the event that the Company purchases or acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated with
the Common Stock which are no longer outstanding. Upon reissuance of such
Common Stock by the Company prior to the Distribution Date (or earlier
redemption, exchange, expiration or termination of the Rights), the Rights
shall again attach to such Common Stock as set forth in this Section 3(c).
Section 4. Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall
be in substantially the same form as Exhibit B
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hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law, rule or regulation 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 customary usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates, whenever
issued, shall be dated as of the Record Date, and on their face shall entitle
the holders thereof to purchase such number of one one-hundredths of a share of
Preferred Stock as shall be set forth therein at the price per one
one-hundredth of a share as set forth therein (the "Purchase Price"), but the
number of such shares and the Purchase Price shall be and remain subject to
adjustment as provided in Sections 11 and 13 hereof.
(b) Any Right Certificate issued pursuant to Section 3(a)
hereof that represents Rights as to which an Acquiring Person or any
Associate or Affiliate thereof is the Beneficial Owner and any Right
Certificate issued at any time upon the transfer of any Rights to an
Acquiring Person or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate, and any Right Certificate
issued pursuant to Section 6 hereof, Section 11 hereof or Section 22 hereof
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate were
issued to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person. This Right Certificate and the Rights
represented hereby may become void in the circumstances specified in
Section 7(e) of the Rights Agreement.
The failure to print the foregoing legend on any such Right Certificate or
any defect therein shall not affect in any manner whatsoever the application
or interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
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(a) The Right Certificates shall be executed on behalf of the
Company by its President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent or any
registrar for the Common Stock (the "Registrar") and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company
whose manual or facsimile signature is affixed to the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent or the Registrar and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the Rights Agent or
the Registrar, issued and delivered with the same force and effect as though
the Person who signed such Right Certificates had not ceased to be such
officer of the Company. Any Right Certificate may be signed on behalf of the
Company by any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates, the certificate
number of each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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Subject to the provisions of Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date (as such term is defined in Section 7(a)
hereof), any Right Certificate or Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 7(e) hereof)
may be transferred, split up, combined or exchanged for another Right
Certificate or
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Right Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon,
the Rights Agent or the Registrar shall countersign and deliver to the Person
and deliver to the Person entitled thereto a Right Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination or exchange
of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to the Company and the Rights
Agent, 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 Right Certificate if mutilated, the Company
will make and deliver a new Right Certificate of like tenor to the Rights
Agent or the Registrar for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
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of Rights.
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(a) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the
Rights Agent together with payment of the Purchase Price for each one
one-hundredth of a share of Preferred Stock as to which the Rights are
exercised, at or prior to the Close of Business on the earlier of (i) June 3,
2008 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, or (iii) the time at which the
Rights are exchanged as provided in Section 24 hereof (such earlier date
being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$212.00, subject to adjustment from time to time as provided in Sections 11
and 13 hereof, and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate, with the form of
election to purchase duly executed, accompanied by payment of the Purchase
Price for each one one-hundredth of a share of Preferred Stock to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of the Rights pursuant hereto in accordance with Section 9
hereof in cash, or by certified check or money order payable to the order of
the Company, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) either (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent), certificates for the number of shares of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company, in its sole
discretion, shall have elected to deposit the shares of Preferred Stock
issuable upon exercise of the Rights hereunder into a depositary, requisition
from the depositary agent depositary receipts representing such number of one
one-hundredths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby irrevocably authorizes the depositary agent to comply
with all such requests, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt, promptly deliver such cash in lieu of issuance of
fractional shares to or upon the order of the registered holder of such Right
Certificate.
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(d) In case the registered holder of any Right Certificate
shall exercise less than all of the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of any of the events listed in Section 11(b) or in
Section 13(a) hereof, any Rights of which an Acquiring Person or any
Associate or Affiliate of the Acquiring Person was the Beneficial Owner at
any time on or after the earlier of the Stock Acquisition Date or the
Distribution Date shall become void with respect to the rights provided under
Section 11(b) and Section 13(a) hereof and any holder of such Rights shall
thereafter have no right to exercise such rights under the provisions of
Section 11(b) and Section 13(a).
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certification
contained in the appropriate form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise shall
have been properly completed and duly executed by the registered holder
thereof and the Company shall have been provided with such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
of such Rights or Affiliates or Associates of such Beneficial Owner (or
former Beneficial Owner) as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
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All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent in canceled form, or, if
surrendered to the Rights Agent in uncanceled form, shall be canceled by the
Rights Agent, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred
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Stock.
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(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or its authorized and issued shares of Preferred Stock held
in treasury, the number of shares of Preferred Stock that will be sufficient
to permit the exercise in full of all outstanding Rights and, after the
occurrence of an event specified in Section 11(b) hereof, shall so reserve
and keep available a sufficient number of shares of Preferred Stock, Common
Stock and/or other securities which may be required to permit the exercise in
full of the Rights pursuant to this Agreement.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
and/or other securities delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares or other securities (subject
to payment of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares or securities.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the first occurrence of an event which (with the
passage of the prescribed time periods set forth in Section 3(a) hereof)
would establish the Distribution Date, a registration statement on an
appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the 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
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a prospectus at all times meeting the requirements of the Securities Act) until
the date of the expiration of the Rights. The Company will also take such
action as may be appropriate under the Blue Sky laws of the various states.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock and/or other securities 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 involved in
the transfer or delivery of Right Certificates or the issuance or delivery of
certificates or depositary receipts for Preferred Stock and/or other
securities in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, nor shall the Company
be required to issue or deliver any certificates or depositary receipts for
shares of Preferred Stock and/or other securities upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until the
Company has established to its satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person (other
---------------------------
than the Company) in whose name any certificate for shares of Preferred Stock
(or other securities) is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the Preferred Stock
(or other securities) represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or other
securities) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or other securities) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder as a Right
Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
-------------------------------------------------
Number of Rights. The Purchase Price, the number of shares covered by each
----------------
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) In the event the Company shall at any time after the date
of this Agreement (i) declare a dividend on the Preferred Stock payable in
shares of Preferred Stock, (ii) subdivide the outstanding Preferred Stock,
(iii) combine the outstanding Preferred Stock into a smaller number of shares,
or (iv) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11, the Purchase
Price in effect at the time of the record date for such dividend or the time
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock, including Preferred
Stock, issuable upon exercise of a Right, shall be proportionately adjusted
so that the holder of any Right exercised after such time, upon payment of
the aggregate Purchase Price such holder would have to pay to exercise such
Right prior to such time, shall be entitled to receive the aggregate number
and kind of shares of capital stock, including Preferred Stock, which, if
such Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification.
(b) In the event any Person shall become an Acquiring Person,
then proper provision shall be made so that each holder of a Right, subject
to Section 7(e) and except as provided below, shall after the later of the
occurrence of such event and the effective date of an appropriate
registration statement pursuant to Section 9 hereof, have a right to receive,
upon exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of shares of Preferred Stock, such
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number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
one one-hundredths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the Current Market Price
per one share of Common Stock (determined pursuant to Section 11(f) hereof on
the date of the occurrence of any one of the events listed above in this
subparagraph (b)) (such number of shares being referred to as the "Number of
Adjustment Shares").
(c) In the event that there shall not be sufficient shares in
treasury or authorized but unissued shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing Section 11(b)
and the Rights become so exercisable, notwithstanding any other provision of
this Agreement, to the extent necessary and permitted by applicable law and
any agreements in effect on the date hereof to which the Company is a party,
each Right shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, a number of shares, or unit of shares, of (x) Common Stock,
and (y) any class or series of preferred stock (or other equity securities)
of the Company, including, but not limited to Preferred Stock, equal in the
aggregate to the Number of Adjustment Shares where the Board of Directors
shall have in good faith deemed such shares or units, other than the shares
of Common Stock, to have at least the same value and voting rights as the
Common Stock (a "Common Stock Equivalent"); provided however, if there are
unavailable sufficient shares (or fractions of shares) of Common Stock and/or
Common Stock Equivalents, then the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock or Common Stock
Equivalents for issuance upon exercise of the Rights, including the calling
of a meeting of stockholders; and provided, further, that if the Company is
unable to cause sufficient shares of Common Stock and/or Common Stock
Equivalents to be available for issuance upon exercise in full of the Rights,
then the Company, to the extent necessary and permitted by applicable law,
and any agreements or instruments in effect on the date thereof to which it
is a party, shall make provision to pay an amount in cash equal to twice the
Purchase Price (as adjusted pursuant to this Section 11), in lieu of issuing
shares of Common Stock and/or Common Stock Equivalents. To the extent that
the Company determines that some action needs to be taken pursuant to this
Section 11(c), a majority of the Board of Directors may suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 11(b) hereof shall have
occurred, in order to decide the appropriate form of distribution to be made
pursuant to this Section 11(c) 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.
The Board of Directors may, but shall not be required to, establish
procedures to allocate the right to receive Common Stock and Common Stock
Equivalents upon exercise of the Rights among holders of Rights, which such
allocation may be, but is not required to be, pro rata.
(d) If the Company shall fix a record date for the issuance of
rights or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 90 calendar days after such record date) to subscribe
for or purchase Preferred Stock (or securities having the same or more
favorable rights, privileges and preferences as the Preferred Stock
("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock, at a subscription or purchase price per
share of Preferred Stock or per share of Equivalent Preferred Stock or having
a conversion price per share, as the case may be, less than the Current
Market Price per share of Preferred Stock (as defined in Section 11(f)
hereof) 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 date by a fraction, the numerator of which shall be
the number of shares of Preferred Stock outstanding on such record date plus
the number of shares of Preferred Stock which the aggregate subscription or
purchase price of the total number of shares of Preferred Stock or Equivalent
Preferred Stock to be offered for subscription or purchase (and/or the
aggregate initial conversion price of the convertible securities so to be
offered for subscription or purchase) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription or purchase
price (and/or the conversion price of convertible securities) may be paid in
a consideration, part or all of which shall be in a form other than cash, the
value of such consideration shall
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be as determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights 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.
(e) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or convertible securities, subscription rights or
warrants (excluding those referred to in Section 11(d) 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
for one share of Preferred Stock (as defined in Section 11(f) hereof) on such
record date less the fair market value (as determined in good faith by a
majority of the Board of Directors, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such convertible
securities, subscription rights or warrants applicable to one share of
Preferred Stock, and the denominator of which shall be such Current Market
Price for one share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(f) (i) For the purpose of any computation hereunder, the
"Current Market Price" of any security (a "Security" for purposes of this
Section 11(f)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as hereinafter defined) immediately prior to such date; provided, however,
that in the event that the Current Market Price per share of such Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into shares of such Security or
(B) any subdivision, combination or reclassification of such Security, and
prior to the expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "Current
Market Price" shall be appropriately adjusted to reflect the Current Market
Price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last transaction price as
reported by the NASDAQ National Market or, if not so reported, 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 system then in use, or, if on any
such date the Security is not reported by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker in the Security selected by a majority of the Board of Directors. If
on any such date no market maker is making a market in the Security, the fair
value of such Security on such date as determined in good faith by a majority
of the Board of Directors shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business or,
if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day. If the Security is not publicly held or
not so listed or traded, "Current Market Price" shall mean the fair value as
determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.
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(ii) For the purposes of any computation hereunder, the
"Current Market Price" per share (or one one-hundredth of a share) of
Preferred Stock shall be determined in the same manner as set forth above for
the Common Stock in clause (i) of this Section 11(f) (other than the last
sentence thereof). If the Current Market Price per share (or one
one-hundredth of a share) of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section 11(f),
the "Current Market Price" per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 100 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the Current Market Price per share of the
Common Stock and the "Current Market Price" per one one-hundredth of a share
of Preferred Stock shall be equal to the Current Market Price per share of
the Common Stock (as appropriately adjusted). If neither the Common Stock or
the Preferred Stock is publicly held or so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good
faith by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(g) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(g)
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest ten-thousandth of a share, as
the case may be. Notwithstanding the first sentence of this Section 11(g),
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.
(h) In the event that at any time, as a result of an adjustment
made pursuant to Section 11(a) or (b) hereof, the holder of any Right shall
be entitled to receive upon exercise of such Right any shares of capital
stock of the Company other than shares of Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in Section 11(a) through (e) hereof, inclusive, and the provisions
of Section 7, 9, 10, 13 and 14 hereof with respect to the shares of Preferred
Stock shall apply on like terms to any such other shares.
(i) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Preferred Stock or other capital stock of the Company purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment of the Purchase Price.
(j) Unless the Company shall have exercised its election as
provided in Section 11(k) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(d) and (e) 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 one one-hundredths of a share of Preferred Stock (calculated
to the nearest ten-thousandth) obtained by (i) multiplying (A) the number of
one one-hundredths of a share of Preferred Stock covered by a Right
immediately prior to the adjustment by (B) 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.
(k) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for which such
Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect
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immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If the Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(k), the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by
the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates to be so
distributed shall be issued, executed and countersigned in the manner
provided for herein (and 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 Right Certificates on the record date specified in the public
announcement.
(l) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(m) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares
of Common Stock or other securities and below one one-hundredth of the then
par value, if any, of the Preferred Stock, issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of such Preferred Stock,
Common Stock or other securities at such adjusted Purchase Price. If upon
any exercise of the Rights, a holder is to receive a combination of Common
Stock and Common Stock Equivalents, a portion of the consideration paid upon
such exercise, equal to at least the then par value of a share of Common
Stock of the Company, shall be allocated as the payment for each share of
Common Stock of the Company so received.
(n) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
to such holder a due ▇▇▇▇ or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(o) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in their good faith judgment a
majority of the Board of Directors shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any Preferred Stock at less than the then Current
Market Price, (iii) issuance wholly for cash of Preferred Stock or securities
which by their terms are convertible into or exchangeable for Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
the holders of its Preferred Stock, shall not be taxable to such
stockholders.
(p) The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or
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exchanged pursuant to Section 24 hereof, (i) consolidate with, (ii) merge with
or into, or (iii) sell or transfer, in one or more 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, if at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(q) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 hereof or
Section 24 hereof, take any action the purpose or effect of which is to
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 Sections 11 or 13
------
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 26 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustments therein contained
and shall not be obligated or responsible for calculating any adjustment nor
shall the Rights Agent be deemed to have knowledge of such adjustment unless
and until the Rights Agent shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
---------------------------------------------------
or Earning Power.
----------------
(a) In the event that, directly or indirectly, following the
Distribution Date, (x) the Company shall consolidate with, or merge with and
into, any other Person, (y) any Person shall consolidate with or merge with
and into the surviving corporation of such merger and, in connection with
such merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any
other property, or (z) the Company shall sell, or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person other than to the Company or one or more of its wholly owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right, subject to Section 7(e), shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of
Preferred Stock, such number of shares of freely tradable Common Stock of the
Principal Party (as hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances or other adverse claims, as shall be
equal to the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (B) 50% of the
Current Market Price per share of the Common Stock of such Principal Party
(determined in the manner described in Section 11(f) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the
Principal Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof, except for
the provisions of Section 11(b), shall apply to such Principal Party; and
(iv) such Principal Party shall take such steps (including, but not limited
to, the authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in accordance with
this Section 13(a)) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(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, the Person that is the
issuer of any securities into which shares of
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Common Stock of the Company are converted in such merger or consolidation, and
if no securities are so issued, the Person, including the Company, that is the
other party to the merger or consolidation; 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; provided, however,
that in any case described in clause (i) or (ii) in this Section 13(b), (x)
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 or
Affiliate of another Person, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest market
value, and (z) in case 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 (x) and (y) 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 interest.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and each Principal
Party and each other Person who may become a Principal Party as a result of
such consolidation, merger, sale or transfer shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement on an
appropriate form under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights, will use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under the
Blue Sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national
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securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last transaction price as reported by the NASDAQ National Market,
or, if not so reported, 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
system then in use or, if on any such date the Rights are not reported by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker in the Rights selected by a majority of the Board
of Directors. 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
a majority of the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). Fractions of shares of
Preferred Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it, provided that such agreement shall provide
that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the shares of Preferred Stock represented by such depositary receipts. In
lieu of fractional shares of Preferred Stock that are not integral multiples
of one one-hundredth of a share of Preferred Stock, the Company may pay to
the registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided, an amount in cash equal to the
same fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(f)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the right to receive
Common Stock, Common Stock Equivalents or other securities (other than
Preferred Stock) upon the exercise of a Right, the Company shall not be
required to issue fractions of shares or units of such Common Stock, Common
Stock Equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional shares of such Common
Stock, Common Stock Equivalents or other securities. In lieu of fractional
shares or units of such Common Stock, Common Stock Equivalents or other
securities, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
share or unit of such Common Stock, Common Stock Equivalent or other
securities. For purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(f)(i) hereof for
the Trading Day immediately prior to the date of such exercise and, if such
Common Stock, Common Stock Equivalent or other securities are not traded,
each such share or other unit of Common Stock, Common Stock Equivalent or
other securities shall have the value of one one-hundredth of a share of
Preferred Stock.
(d) Except as otherwise expressly provided in this Section 14,
the holder of a Right by the acceptance of the Rights expressly waives his
right to receive any fractional Rights or any fractional share upon exercise
of Rights.
Section 15. Rights of Action. All rights of action in respect
----------------
of this Agreement, except for rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock), may, on his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the
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19
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement. Holders
of Rights shall be entitled to recover the reasonable costs and expenses,
including attorneys' fees, incurred by them in any action to enforce the
provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right
--------------------------
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
-------------------------------------------------
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Preferred Stock,
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in
Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
---------------------------
pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense (including the costs and expenses of enforcing this right of
indemnification), 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. The indemnity provided for herein shall survive the expiration of
the Rights and the termination of this Agreement.
The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate for Preferred
Stock, Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Notwithstanding anything in this Agreement to the contrary, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or
damage
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of any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights
---------------------------------------------------
Agent. Any corporation into which the Rights Agent or any successor Rights
-----
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business 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 that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
----------------------
the duties and obligations imposed by this Agreement (and no implied duties
or obligations shall be read into this Agreement against the Rights Agent)
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the
Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any act
or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the President
or any Vice President and by the Chief Financial Officer, the Chief
Accounting Officer, Treasurer or any Assistant Treasurer or 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 Right Certificates (except its countersignature thereof) or be required
to verify the same, and 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
-17-
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Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 11 and 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 Right Certificates after
actual notice to the Rights Agent of 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 Preferred Stock, Common Stock
or other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred Stock, Common Stock or
other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chief Executive Officer, President any Vice President, the Chief
Financial Officer, the Chief Accounting Officer, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be
taken or omitted by it in good faith in accordance with instructions of any
such officer. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
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 or suffered to be taken or omitted by it in good faith during
the period beginning on the date on which the Rights Agent has applied for
written instructions from the Company and ending on the date upon which the
Rights Agent receives such instructions or for 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 ten Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application with respect to the proposed action or omission and/or specifying
the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or have a pecuniary interest in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
-18-
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(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1, 2
and/or 3 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with
the Company. The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation
of any Person as an Acquiring Person, Affiliate or Associate) under this
Agreement unless and until the Rights Agent shall be specifically notified in
writing by the Company of such fact, event or determination.
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 a 30-day notice in writing mailed to the Company and to
each transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail at the expense of the Company. The Company may remove the Rights Agent
or any successor Rights Agent upon a 30-days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor Rights
Agent. If the Company shall fail to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a successor Rights Agent. Any successor
Rights Agent, whether 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, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $25,000,000, 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. The
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company shall
mail a written notice thereof in writing with the predecessor Rights Agent by
certified or registered mail and each transfer agent of the Common Stock and
Preferred Stock, and mail a written notice thereof to the registered holders
of the Right Certificates by first class mail. Failure to give any notice
provided for this Section 21, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
----------------------------------
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by a majority of the Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares of stock or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption and Termination.
--------------------------
(a) (i) A majority of the Board of Directors of the
Company may, at its option, at any time prior to the earlier of (x) the time
that any Person becomes an Acquiring Person or (y) the Final Expiration Date,
elect to redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as 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
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23
the "Redemption Price"). The redemption of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board
in its sole discretion may establish.
(ii) In addition, prior to any event described in
Section 13(a), a majority of the Board of Directors may redeem all but not
less than all of the then outstanding Rights at the Redemption Price (A)
following the occurrence of a Stock Acquisition Date either: (x) if each of
the following shall have occurred and remain in effect: (1) a Person who is
an Acquiring Person shall have transferred or otherwise disposed of a number
of shares of voting securities of the Company in a manner satisfactory to the
Board of Directors such that such Person is thereafter a Beneficial Owner of
securities having less than 20% of the Voting Power of the Company, and (2)
there is no other Person, immediately following the occurrence of the event
described in (1), who is an Acquiring Person; or (y) in connection with any
transaction not involving an Acquiring Person or an Affiliate or Associate of
an Acquiring Person; or (B) following 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 of Directors of the Company has determined in good
faith) that such Person intends to take, or may consider taking, any action
which would result in such Person becoming an Acquiring Person.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the action of a majority of the Board of Directors
electing to redeem the Rights, evidence of which shall be promptly 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. In the case
of a redemption permitted under Section 23(a)(ii), evidence of which shall
have been filed with the Rights Agent, the right to exercise the Rights will
terminate and represent only the right to receive the Redemption Price only
after ten (10) business days following the giving of such notice of such
redemption to the holders of such Rights. The Company shall promptly give
public disclosure of any such redemption; provided, however, that the failure
to give, or any defect in, any such disclosure shall not affect the validity
of such redemption. Within 10 days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing by first class mail such notice to all such holders at their last
addresses as they appear upon the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
(c) Neither the Company nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any Rights at any time or in any
manner other than that specifically set forth in this Section 23, and other
than in connection with the purchase of shares of Common Stock prior to the
Distribution Date.
Section 24. Exchange.
--------
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e)
hereof) for Common Stock at an exchange ratio of one share 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"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action
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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 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 any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Stock for Common Stock exchangeable
for Rights, at the initial rate of one one-hundredth of a share of Preferred
Stock, as appropriately adjusted to reflect adjustments in the voting rights
of the Preferred Stock pursuant to the terms thereof, so that the fraction of
a share of Preferred Stock delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or of Preferred Stock issued but not outstanding, or authorized
but unissued, to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or of Preferred
Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractional
shares of Common Stock or of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock) or to
distribute certificates which evidence fractional shares of such Common Stock
or of Preferred Stock. In lieu of such fractional shares, the Company shall
pay to the registered holders of the Right Certificates with regard to which
such fractional shares would otherwise be issuable an amount in cash as
determined by Section 14 hereof.
Section 25. Notice of Proposed Actions. In case the Company
--------------------------
shall propose (a) to pay any dividend payable in stock of any class to the
holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular periodic cash dividend
out of earnings or retained earnings of the Company), or (b) to offer to the
holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
other class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(d) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sales or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall mail by
first class mail to each holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Preferred Stock, if any
such date is to be fixed. Such notice shall be so given in the case of any
action covered by clauses (a) or (b) above at least ten days prior to the
record date for determining holders of the Preferred Stock for purposes of
such action, and in the case of any such other action, at least ten days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Preferred Stock, whichever shall be
the earlier. The failure to give notice required by this Section 25, or any
defect therein, shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
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In case any of the events set forth in Section 11(b) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter mail by first class mail to each holder of a Right
Certificate, 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(b) hereof.
Section 26. Notices. Notices or demands authorized by this
-------
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (unless another address
is filed in writing with the Rights Agent) as follows:
MERCANTILE BANCORPORATION INC.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel and Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by registered or certified mail or
overnight courier with a reputable national courier service and shall be
deemed given upon receipt and addressed (unless another address is filed in
writing with the Company) as follows:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
-----------------------------
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company or the Rights Agent.
Section 27. Supplements and Amendments. The Company may from
--------------------------
time to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company may deem necessary or desirable and which shall be consistent with,
and for the purpose of fulfilling, the objectives of the Board of Directors
in adopting this Agreement, any such supplement or amendment to be evidenced
by a writing signed by the Company and the Rights Agent; provided, however,
that from and after such time any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would adversely affect the
interests of the holders of Rights. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement will be effective against
the Rights Agent without the execution of such supplement or amendment by the
Rights Agent.
Section 28. Successors. All the covenants and provisions of
----------
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
--------------------------
Agreement shall be construed to give any Person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any
legal or equitable
-22-
26
right, remedy or claim under this Agreement. This Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
Section 30. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. It is the intent of the parties hereto to enforce the remainder
of the terms, provisions, covenants and restrictions to the maximum extent
permitted by law.
Section 31. Governing Law. This Agreement and each Right
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Missouri and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts
to be made and performed entirely within such state, except as to the duties
and liabilities of the Rights Agent which shall be governed by and construed
in accordance with the laws of the State of Illinois.
Section 32. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
--------------------
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the day and year first above written.
Attest: MERCANTILE BANCORPORATION INC.
By By
----------------------------------- ----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Counsel and Secretary Title: Vice Chairman and Chief
Financial Officer
Attest: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, AS
RIGHTS AGENT
By By
----------------------------------- ----------------------------------
Name: Name:
Title: Title:
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EXHIBIT A
---------
[FORM OF CERTIFICATE OF DESIGNATION]
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
MERCANTILE BANCORPORATION INC.
I, ▇▇▇▇ ▇. ▇▇▇▇▇▇, the Vice Chairman and Chief Financial Officer
of Mercantile Bancorporation Inc., a corporation organized and existing under
The General and Business Corporation Law of Missouri, in accordance with the
provisions of Section 351.180.7 thereof, DO HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation, as amended, of the Company,
the said Board of Directors on May --, 1998 adopted the following resolution
creating a series of Two Million (2,000,000) shares of voting Preferred Stock
designated as Series B Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Company in accordance with the provisions of its Certificate
of Incorporation, as amended, a series of voting Preferred Stock of the
Company be and it is hereby created, and that the designation and amount
thereof and the powers, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. Designation and Amount.
----------------------
There shall be a series of the voting preferred stock of the
Company which shall be designated as the "Series B Junior Participating
Preferred Stock," no par value, and the number of shares constituting such
series shall be Two Million (2,000,000). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series B
Junior Participating Preferred Stock to a number less than that of the shares
then outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Company.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any
series of preferred stock of the Company ranking prior and superior to the
Series B Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior Participating Preferred Stock, in
preference to the holders of shares of Common Stock, $.01 par value (the
"Common Stock"), of the Company and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in
cash on or about the first day of January, April, July and October in each
year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series B Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B Junior Participating
Preferred Stock. In the event the Company shall at any time after May --,
1998 (the
A-1
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"Rights Declaration Date") declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series B Junior Participating Preferred
Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the
Series B Junior Participating Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided, however, that in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $1.00 Per share on the Series B Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series B
Junior Participating Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Junior Participating Preferred Stock
in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of Series B
Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights.
-------------
The holders of shares of Series B Junior Participating Preferred
Stock shall have the following voting rights:
(A) Each share of Series B Junior Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Company.
(B) Except as otherwise provided herein, in the Company's
Certificate of Incorporation or by law, the holders of shares of Series B
Junior Participating Preferred Stock, the holders of shares of Common Stock,
and the holders of shares of any other capital stock of the Company having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) Except as otherwise set forth herein or in the Company's
Certificate of Incorporation, and except as otherwise provided by law,
holders of Series B Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
A-2
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Section 4. Certain Restrictions.
--------------------
(A) Whenever dividends or distributions payable on the Series B
Junior Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series B Junior Participating Preferred
Stock outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Junior Participating Preferred Stock, except dividends paid ratably on the
Series B Junior Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) except as permitted in Section 4(A)(iv) below,
redeem or purchase or otherwise acquire for consideration shares of any stock
ranking on a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series B Junior Participating Preferred Stock,
provided, however, that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Junior Participating
Preferred Stock; and
(iv) purchase or otherwise acquire for consideration any
shares of Series B Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series B Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares.
-----------------
Any shares of Series B Junior Participating Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof. The Company
shall cause all such shares upon their cancellation to be authorized but
unissued shares of Preferred Stock which may be reissued as part of a new
series of Preferred Stock, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series B Junior
Participating Preferred Stock shall have received $100.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series B
Liquidation Preference"). Following the payment of the full amount of the
Series B Liquidation Preference, no additional
A-3
30
distributions shall be made to the holders of shares of Series B Junior
Participating Preferred Stock, unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series B Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in paragraph (C)
of this Section 6 to reflect such events as stock dividends, and subdivisions,
combinations and consolidations with respect to the Common Stock) (such number
in clause (ii) being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Series B Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series B Junior Participating
Preferred Stock and Common Stock, respectively, holders of Series B Junior
Participating Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Series B Junior Participating Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series B Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series B Junior Participating Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In
the event there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Company shall at any time after the Rights
Declaration Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc.
--------------------------
In case the Company shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any
other property, then in any such case the shares of Series B Junior
Participating Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is exchanged or
changed. In the event the Company shall at any time after the Rights
Declaration Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series B Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.
Section 8. Redemption.
----------
The shares of Series B Junior Participating Preferred Stock shall
not be redeemable.
A-4
31
Section 9. Ranking.
-------
The Series B Junior Participating Preferred Stock shall rank
junior to all other series of the Company's Preferred Stock as to the payment
of dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise.
Section 10. Fractional Shares.
-----------------
Series B Junior Participating Preferred Stock may be issued in
fractions which are integral multiples of one one-hundredth of a share.
Fractions of shares of Series B Junior Participating Preferred Stock may, at
the election of the Company, be evidenced by depositary receipts, pursuant to
an appropriate agreement between the Company and a depositary selected by the
Company. The holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Series B Junior Participating Preferred Stock represented by such
depositary receipts.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate and do affirm and acknowledge the foregoing as true under the
penalties of perjury this day of May, 1998.
--
By:
-------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman and Chief Financial Officer
State of Missouri )
) SS.
County of -------- )
On this day of , 1998, before me,
------- ---------
, a Notary Public in and for the State of Missouri,
---------------------
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice Chairman and Chief Financial Officer
of Mercantile Bancorporation Inc., known to me to be the person who executed
the foregoing Certificate of Designation and acknowledged to me that he
executed the same pursuant to authority given by the Board of Directors of
such corporation as their free and voluntary act, and as the free and
voluntary act and deed of such corporation, for the uses and purposes therein
set forth.
-----------------------------------
Notary Public
My commission expires:
-------------------------------------
A-5
32
EXHIBIT B
---------
[FORM FACE OF RIGHT CERTIFICATE]
Certificate No. Rights
--------------------- --------------------
NOT EXERCISABLE AFTER JUNE 3, 2008 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT OR EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]1
RIGHT CERTIFICATE
MERCANTILE BANCORPORATION INC.
This certifies that , or registered
---------------------
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of May --, 1998 (the "Rights
Agreement"), between Mercantile Bancorporation Inc., a Missouri corporation
(the "Company"), and ▇▇▇▇▇▇ Trust and Savings Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Central
time) on June 3, 2008 (the "Final Expiration Date") at the principal office
of the Rights Agent, or its successor as Rights Agent, one one-hundredth of a
fully paid, nonassessable share of the Series B Junior Participating
Preferred Stock, no par value ("Preferred Stock"), of the Company, at a
purchase price of $212.00 per one one-hundredth of a share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase on the reverse side hereof duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
shares which may be purchased upon exercise of each Right) and the Purchase
Price set forth above, are the number and Purchase Price as of ,
------------
based on the shares of Preferred Stock of the Company as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock which may be purchased upon the exercise
of each of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the Company and
the above-mentioned office of the Rights Agent and are also available upon
written request to the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
--------
[FN]
The portion of the legend in brackets shall be inserted only as
applicable.
B-1
33
shares of Preferred Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive, upon surrender hereof, another Right Certificate or
Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at
a redemption price of $.01 Per Right prior to the earlier of (i) the time
that any Person becomes an Acquiring Person (as defined in the Rights
Agreement) or (ii) the Final Expiration Date. Under certain terms and
conditions, the Rights may also be redeemed following the time that any
person becomes an Acquiring Person but prior to the Final Expiration Date, as
more fully described in the Rights Agreement. In addition, subject to the
provisions of the Rights Agreement, the Rights may be exchanged at the option
of the Company at any time after any person becomes an Acquiring Person at an
initial exchange ratio of one share of Common Stock (or one one-hundredth of
a share of Preferred Stock) for each Right exchanged.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts).
In lieu of fractions of a share that are not integral multiples of
one-hundredth of a share of Preferred Stock, a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock, 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
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Right Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-2
34
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of , .
----------------- ------
Attest MERCANTILE BANCORPORATION INC.
By By
----------------------------------- ---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Counsel and Secretary Title: Vice Chairman and Chief
Financial Officer
Countersigned:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By
----------------------------------
Name:
Title:
B-3
35
[FORM OF REVERSE SIDE OF RIGHT CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
------------------------------------------
hereby sells, assigns and transfers unto:
--------------------------------
-------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
-------------------
Attorney to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
------------- ------ ---------------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate)
Signature Guaranteed:
--------------------
The signature of the person(s) signing this Right Certificate
must be guaranteed by a participant in the Securities Transfer Agent's
Medallion Program, the Stock Exchange's Medallion Program or the NYSE, Inc.
Medallion Program.
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right 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 pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right 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 must conform in all
respects to name of holder as specified
on the face of this Right Certificate)
B-4
36
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
To ▇▇▇▇▇▇ Trust and Savings Bank:
The undersigned hereby irrevocably elects to exercise
-----------
Rights represented by this Right Certificate to purchase the shares of
Preferred Stock (or other securities) issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name
of:
Name:
----------------------------------------
Address:
----------------------------------------
----------------------------------------
Social Security or
Taxpayer I.D. No.:
----------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Name:
----------------------------------------
Address:
----------------------------------------
----------------------------------------
Social Security or
Taxpayer I.D. No.:
----------------------------------------
Dated: ,
--------------- ------
-----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
The signature of the person(s) signing this Right Certificate
must be guaranteed by a participant in the Securities Transfer Agent's
Medallion Program, the Stock Exchange's Medallion Program or the NYSE, Inc.
Medallion Program.
B-5
37
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right 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 pursuant to the Rights Agreement);
(2) this Right 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 pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: , .
----------------- --------
----------------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate)
NOTICE
------
The signature in the foregoing Forms of Assignment and Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and
such Assignment or Election to Purchase will not be honored.
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EXHIBIT C
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[Form of Summary of Preferred Stock Purchase Rights]
SUMMARY OF PREFERRED STOCK
PURCHASE RIGHTS
MERCANTILE BANCORPORATION INC.
On May , 1998, the Board of Directors of Mercantile
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Bancorporation Inc. (the "Company") declared a dividend distribution of one
Preferred Stock Purchase Right (collectively, the "Rights") for each
outstanding share of common stock, $.01 par value (the "Common Stock"), of
the Company (other than shares held in the Company's treasury). The dividend
distribution is payable to the stockholders of record at the close of
business on June 4, 1998 (the "Record Date"). Except as set forth below,
each Right, when exercisable, entitles the registered holder to purchase from
the Company one one-hundredth of a share of a new series of voting preferred
stock, designated as Series B Junior Participating Preferred Stock, no par
value (the "Preferred Stock"), at a price of $212.00 per one one-hundredth of
a share (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, as Rights
Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Right
Certificates will be distributed. Until the earlier of (i) ten days
following the first to occur of (a) a public announcement that, without the
prior written consent of the Board of Directors of the Company, a person or
group of affiliated or associated persons other than the Company, a subsidiary
of the Company or any employee benefit plan of the Company or a subsidiary of
the Company (an "Acquiring Person") has acquired, or obtained the right to
acquire, outstanding shares of Common Stock of the Company representing 20%
or more of the voting power of the Company or (b) the date on which the
Company first has notice or otherwise determines that a person has become an
Acquiring Person (the "Stock Acquisition Date") or (ii) ten days following
the commencement or announcement of an intention to make a tender offer or
exchange offer, without the prior written consent of the Board of Directors
of the Company, for outstanding shares of such Common Stock representing 20%
or more of the voting power of the Company (the earlier of the dates in
clause (i) or (ii) above being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of and after the Record Date (other than shares
held in the Company's treasury), by such Common Stock certificates. The
Rights Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with the Company's Common Stock. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), new Common Stock certificates issued after the Record Date, upon
transfer, new issuance or issuance from the Company's treasury of the
Company's Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), the surrender for transfer of any of
the Company's Common Stock certificates outstanding as of and after the
Record Date will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will then evidence the Rights.
Notwithstanding the above, a person will not be deemed to be an
Acquiring Person if such person: (x) becomes the owner of outstanding Shares
of the Common Stock of the Company representing 20% or more of the voting
power of the Company by means of an acquisition of shares of Common Stock
directly from the Company if such acquisition is approved by a majority of
the Board of Directors of the Company (unless such Person was an Acquiring
Person prior to such acquisition); (y)
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becomes the owner of Common Stock representing 20% or more of the voting power
of the Company following an acquisition of the Company's voting securities by
the Company, unless such person subsequently acquires additional voting
securities of the Company (other than by means of a stock dividend, stock split,
recapitalization or similar event); or (z) has become an Acquiring Person
inadvertently and divests promptly a number of voting securities so as to no
longer be an Acquiring Person.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on June 3, 2008, unless earlier redeemed or exchanged by
the Company, as described below.
The Purchase Price payable, the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights
and the number of Rights outstanding are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Preferred Stock, (ii)
upon the distribution to holders of Preferred Stock of rights or warrants to
subscribe for shares of Preferred Stock or securities convertible into
Preferred Stock at less than the then current market price of the Preferred
Stock, or (iii) upon the distribution to holders of Preferred Stock of
evidences of indebtedness, cash or assets (excluding regular periodic cash
dividends out of earnings or retained earnings or dividends payable in
Preferred Stock) or of convertible securities subscription rights or warrants
(other than those referred to above).
In the event that, following the Distribution Date, the Company
is acquired in a merger or other business combination transaction in which
the Company is not the surviving corporation or in which the Common Stock is
exchanged or changed or 50% or more of the Company's assets or earning power
is sold (in one transaction or a series of transactions), proper provision
shall be made so that each holder of a Right shall thereafter have the right
to receive, in lieu of shares of Preferred Stock, upon the exercise of the
Right and payment of the Purchase Price, that number of shares of common
stock of the surviving or purchasing company (or, in certain cases, one of
its affiliates) which at the time of such transaction would have a market
value of two times the Purchase Price (such right being called the "Merger
Right").
In the event that any person shall become an Acquiring Person and
subject to the availability of Common Stock, proper provision shall be made
so that each holder of a Right will thereafter have the right to receive, in
lieu of shares of Preferred Stock, upon exercise that number of shares (or
fractional shares) of Common Stock having a market value of two times the
Purchase Price, subject to the availability of a sufficient number of
treasury shares or authorized but unissued shares (such right being called
the "Subscription Right"). The holder of a Right will continue to have the
Merger Right unless and until such holder exercises the Subscription Right.
Any Rights that are beneficially owned by an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person will become null and void
upon the occurrence of any of the events giving rise to the exercisability of
the Merger Right or the Subscription Right and any holder of such Rights will
have no right to exercise such Rights from and after the occurrence of such
an event insofar as they relate to the Merger Right or the Subscription
Right.
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price. No fractional shares will be issued. In
lieu of fractional shares, an adjustment in cash will be made based on the
market price of the Preferred Stock or the Common Stock as the case may be on
the last trading date prior to the date of exercise.
At any time prior to a Person becoming an Acquiring Person or
June 3, 2008, the Company's Board of Directors may elect to redeem the Rights
in whole, but not in part, at a price of $.01 Per Right and prior to an event
giving rise to the Merger Right (i) following a change in a majority of the
Directors of the Company or (ii) following the Stock Acquisition Date,
provided that either (a) the Acquiring Person reduces its beneficial
ownership to less than 20% of the voting power of the Company in a manner
satisfactory to the Board of Directors and there are no more Acquiring
Persons, or (b) such
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redemption is incidental to a merger or other business combination involving the
Company but not involving the Acquiring Person. Immediately upon the action of
the Board of Directors electing to redeem the Rights, the Company shall make
announcement thereof, and the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the redemption price.
At any time after a Person becomes an Acquiring Person but prior
to such time that any Person becomes the beneficial owner of 50% or more of
the outstanding shares of the Company's Common Stock, the Company may elect
to effect a full or partial exchange of Rights for the Company's Common Stock
at an initial exchange ratio of one share of Common Stock for each Right
exchanged. Alternatively, the Company may elect to effect the exchange of
Rights using Preferred Stock at an initial exchange ratio of one
one-hundredth of a share of Preferred Stock for each Right exchanged.
The Preferred Stock purchasable upon exercise of the Rights will
be non-redeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock).
Each share of Preferred Stock will have a preferential dividend in an amount
equal to the greater of $1.00 Per share or 100 times any dividend declared on
each share of Common Stock. In the event of liquidation, the holders of
Preferred Stock will receive a preferred liquidation payment equal to the
greater of $1.00 Or 100 times the payment made per each share of Common
Stock. Each one one-hundredth of a share of Preferred Stock will have one
vote, voting together with the shares of Common Stock. In the event of any
merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each share of Preferred Stock will be entitled to receive 100
times the amount and type of consideration received per share of Common
Stock. The rights of the Preferred Stock as to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary anti-dilution provisions. Fractional shares of Preferred Stock in
integral multiples of one one-hundredth of a share of Preferred Stock will be
issuable; however, the Company may elect to distribute depositary receipts in
lieu of such fractional shares. In lieu of fractional shares other than
fractions that are multiples of one one-hundredth of a share, an adjustment
in cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
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