-1-
THE EMPIRE DISTRICT ELECTRIC COMPANY
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
Rights Agent
RIGHTS AGREEMENT
Dated as of
April 27, 2000
TABLE OF CONTENTS
Page
RIGHTS AGREEMENT 1
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 8
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates 10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 11
Section 8. Cancellation and Destruction of Right
Certificates 13
Section 9. Reservation and Availability of Shares of
Capital Stock 13
Section 10.Preference Stock Record Date 15
Section 11.Adjustment of Purchase Price, Number of
Shares or Number of Rights 15
Section 12.Certificate of Adjusted Purchase Price or
Number of Shares 26
Section 13.Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 26
Section 14.Fractional Rights and Fractional Shares 29
Section 15.Rights of Action 30
Section 16.Agreement of Right Holders 31
Section 17.Right Certificate Holder Not Deemed a
Stockholder 32
Section 18.Concerning the Rights Agent 32
Section 19.Merger or Consolidation or Change of Name
of Rights Agent 33
Section 20.Duties of Rights Agent 34
Section 21.Change of Rights Agent 36
Section 22.Issuance of New Right Certificates 37
Section 23.Redemption and Termination 38
Section 24.Exchange 38
Section 25.Notice of Certain Events 40
Section 26.Notices 41
Section 27.Supplements and Amendments 41
Section 28.Successors 42
Section 29.Determinations and Actions by the Board
of Directors, etc. 42
Section 30.Benefits of This Agreement 43
Section 31.Severability 43
Section 32.Governing Law 43
Section 33.Counterparts 44
Section 34.Descriptive Headings 44
Section 35.UCU Merger 44
Exhibit A - Restated Articles of Incorporation A-1
Exhibit B - Form of Right Certificate B-1
- Form of Assignment B-8
- Certificate B-9
- Notice B-10
- Form of Election to Purchase B-11
- Certificate B-13
- Notice B-13
Exhibit C - Summary of Rights to Purchase
Preference Stock C-1
RIGHTS AGREEMENT
Rights Agreement, dated as of April 27, 2000 (the
"Agreement") between The Empire District Electric Company, a
Kansas corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company on
April 27, 2000 (the "Rights Dividend Declaration Date")
authorized and declared a dividend distribution (the
"Distribution") of one Right for each outstanding share of the
Common Stock (as defined in Section 1(i) hereof) outstanding at
the close of business on July 26, 2000 (the "Record Date")
subject to regulatory clearance from the Missouri Public
Service Commission on or before the Record Date and has
authorized and directed the issuance of one Right (as such
number may hereafter be adjusted pursuant to the provisions of
Section 11(p) hereof) in respect of each share of Common Stock
of the Company issued (whether originally issued or delivered
from the Company's treasury stock) between the Record Date and
the earlier of the Distribution Date or the Expiration Date (as
such terms are hereinafter defined) (provided, however, that
Rights may be issued with respect to shares of Common Stock
that shall become outstanding after the Distribution Date and
prior to the Expiration Date in accordance with Section 22),
each Right initially representing the right to purchase, under
certain circumstances, one one-hundredth of a share of Series A
Participating Preference Stock (as defined in Section 1(v)
hereof) of the Company having the rights, powers and
preferences set forth in the Company's Restated Articles of
Incorporation attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
WHEREAS, the Board of Directors of the Company has
authorized the transactions contemplated by the Agreement and
Plan of Merger (the "Merger Agreement"), between UtiliCorp
United Inc., a Delaware corporation ("UCU"), and the Company,
dated as of May 10, 1999, pursuant to which the Company will
merge with and into UCU with UCU as the surviving corporation;
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, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together
with all Affiliates (as such term is hereinafter defined)
and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term
is hereinafter defined) of securities of the Company
constituting a Substantial Block (as such term is
hereinafter defined), but shall not include the Company,
any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company or any
Person organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the
terms of any such plan.
(b) "Act" shall have the meaning set forth in
Section 9(c) hereof.
(c) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended and in effect on the date
hereof (the "Exchange Act").
(e) 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 has, directly or indirectly,
the right to acquire (whether such right is
exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion
rights, exchange rights, rights, warrants or options,
or otherwise, provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," (1) securities tendered pursuant
to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange, (2) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event (as such term is hereinafter
defined) or (3) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering
Event, which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a)
hereof ("Original Rights") or pursuant to Section
11(i), Section 11(p) or Section 22 hereof in
connection with an adjustment made with respect to
Original Rights; or
(ii) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly,
the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule l3d-3
of the General Rules and Regulations under the
Exchange Act) or has a "pecuniary interest" or an
"indirect pecuniary interest" in (as determined
pursuant to Rule 16a-1(a)(2) of the General Rules and
Regulations under the Exchange Act), in each case,
including pursuant to any agreement, arrangement or
understanding, whether or not in writing, provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to "beneficially own," any
security under this subparagraph (ii) if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable on
Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such
Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (e))
or disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in
this definition shall cause a Person ordinarily engaged in
business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any
securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with
the Company.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions
in the State of New York are authorized or obligated by
law or executive order to close.
(g) "Certification" shall have the meaning set forth
in Section 18 hereof.
(h) "close of business" on any given date shall mean
5:00 P.M., New York City time, on such date, provided,
however, if such date is not a Business Day it shall mean
5:00 P.M. on the next succeeding Business Day.
(i) "Common Stock" when used with reference to the
Company shall mean the Common Stock, $1 par value, of the
Company. "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.
(j) "common stock equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(k) "Company" shall have the meaning set forth in
the introduction hereto.
(l) "current market price" shall have the meaning
set forth in Section 11(d) hereof.
(m) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning set
forth in Section 3(a).
(o) "equivalent preference stock" shall have the
meaning set forth in Section 11(b) hereof.
(p) "Exchange Act" shall have the meaning set forth
in the definitions of "Affiliate" and "Associate" above.
(q) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(r) "Expiration Date" shall have the meaning set
forth in Section 7(a).
(s) "Final Expiration Date" shall have the meaning
set forth in Section 7(a).
(t) "Original Rights" shall have the meaning set
forth in the definition of "Beneficial Owner" above.
(u) "Person" shall mean any individual, firm,
corporation, partnership, trust, limited liability
company, association or other entity or organization.
(v) "Preference Stock" shall mean the shares of
Series A Participating Preference Stock, without par
value, of the Company.
(w) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(x) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(y) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(z) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(aa) "Rights" shall have the meaning set forth in
the recitals hereto.
(bb) "Rights Agent" shall have the meaning set forth
in the introduction hereto.
(cc) "Rights Dividend Declaration Date" shall have
the meaning set forth in the recitals hereto.
(dd) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii).
(ee) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ff) "Section 13 Event" shall mean any event
described in Section 13(a).
(gg) "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, includes a report filed pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(hh) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ii) "Subsidiary" shall mean, with reference to any
Person, any corporation (or other entity) of which an
amount of voting securities (or comparable ownership
interests) sufficient to elect at least a majority of the
directors (or comparable individuals) of such corporation
(or other entity) is beneficially owned or otherwise
controlled, directly or indirectly, by such Person.
(jj) "Substantial Block" shall mean a number of
shares of the Common Stock which equals or exceeds 10% of
the number of shares of the Common Stock then outstanding.
A Person shall not be deemed the Beneficial Owner of a
Substantial Block if such Person, together with all
Affiliates and Associates of such Person, (a) beneficially
own less than 20% of the number of shares of Common Stock
then outstanding, (b) acquired all of such shares, in the
sole judgment of the Board of Directors of the Company,
without the intention of effecting control of the Company,
and (c) dispose of a sufficient number of such shares
within ten calendar days of having acquired a Substantial
Block such that they would no longer beneficially own 10%
or more of the number of shares of Common Stock then
outstanding.
(kk) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ll) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(mm) "Trading Day" shall have the meaning set forth
in Section 11(d) hereof.
(nn) "Triggering Event" shall mean any Section
11(a)(ii) Event or Section 13 Event.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable upon ten calendar days' written
notice to the Rights Agent. In no event shall the Rights Agent
have any duty to supervise, or in any way be liable for the
acts or omissions of, such Co-Rights Agents.
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the close of business on the tenth calendar
day after the Shares Acquisition Date (or, if the tenth
calendar day after the Shares Acquisition Date occurs before
the Record Date, the close of business on the Record Date) or
(ii) the close of business on the tenth calendar day 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 Person
organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer if, upon
consummation thereof, such Person would be an Acquiring Person
(the earlier of the dates in subsections (i) and (ii) hereof
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 the Common Stock shall be
deemed also to be Right Certificates) and not by separate Right
Certificates, and (y) the Rights will be transferable only in
connection with the transfer of the Common Stock. As soon as
practicable after receipt by the Rights Agent of written notice
from the Company of the Distribution Date and after the Company
has provided the Rights Agent with a list of shareholders of
Common Stock, the Rights Agent, at the Company's expense, will
send by first-class, 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 (a "Right Certificate"),
evidencing one Right for each share of the Common Stock so
held, subject to adjustment as provided herein. As of the
Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) As soon as practicable following the Record
Date, the Company will send a copy of a Summary of Rights to
Purchase Preference Stock, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address
of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates for the Common Stock, and the
registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any of the certificates
for the common Stock outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares
of Common Stock which are issued (whether originally issued or
from the Company's treasury) after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date (as
such term is defined in Section 7), or, in certain
circumstances provided in Section 22 hereof, after the
Distribution Date. Certificates representing such shares of
Common Stock shall have impressed on, printed on, 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 The Empire District Electric
Company and ChaseMellon Shareholder Services, L.L.C.
dated as of April 27, 2000 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal executive offices of The Empire District
Electric Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Empire
District Electric Company will mail to the holder of
this certificate a copy of the Rights Agreement as in
effect on the date of mailing without charge within
five days after receipt of a written request
therefor. Under certain circumstances set forth in
the Rights Agreement, Rights may become null and
void.
After the due execution of any supplement or amendment to this
Agreement in accordance with the terms hereof, the reference to
this Agreement in the foregoing legend shall mean the Agreement
as so supplemented or amended. Until the Distribution Date,
the Rights associated with the Common Stock represented by
certificates containing the foregoing legend 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
certificate. In the event that the Company purchases or
acquires any shares of 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 shares of Common Stock which are no longer
outstanding. The failure to print the foregoing legend on any
such Common Stock certificate or any other defect therein shall
not affect in any manner whatsoever the application or
interpretation of the provisions of this Agreement or the
rights of any holder of the Rights.
Section 4. Form of Right Certificates. (a) The
Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement and which do not affect the
rights, duties or responsibilities of the Rights Agent, or as
may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. The Right
Certificates shall be in machine-printable format and in a form
reasonably satisfactory to the Rights Agent. Subject to the
provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the
Record Date, shall show the date of countersignature, and on
their face shall entitle the holders thereof to purchase such
number of shares of Preference Stock (or following a Triggering
Event, Common Stock, other securities, cash or other assets, as
the case may be) as shall be set forth therein at the price per
one one-hundredth of a share of Preference Stock set forth
therein (the "Purchase Price"), but the number of such shares
and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Notwithstanding any other provision of this
Agreement, any Right Certificate issued pursuant to Section 3
or Section 22 hereof that represents Rights beneficially owned
by (i) an Acquiring Person or any Associate or Affiliate
thereof, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person became such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of an
agreement, arrangement or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof, any Right
Certificate issued at any time to any nominee of such Acquiring
Person, Associate or Affiliate, and, provided that the Company
shall have notified the Rights Agent that this Section 4(b)
applies, any Right Certificate issued pursuant to Section 6 or
Section 11 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible following the written
instruction of the Company to the Rights Agent) the following
legend:
The Rights represented by this Right Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this
Right Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by one of its authorized officers in the manner provided in the
By-Laws of the Company for Common Stock certificates. The
Right Certificates shall be countersigned by an authorized
signatory of the Rights Agent either manually or by facsimile
signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the
Rights Agent, 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; and any Right
Certificate may be signed on behalf of the Company by any
Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution
of this Rights Agreement any such Person was not such an
officer.
In case any authorized signatory of the Rights Agent
who shall have countersigned any of the Right Certificates
shall cease to be such signatory before delivery by the
Company, such Right Certificates, nevertheless, may be issued
and delivered by the Company with the same force and effect as
though the Person who countersigned such Right Certificates had
not ceased to be such signatory; and any Right Certificate may
be countersigned on behalf of the Rights Agent by any Person
who, at the actual date of the countersignature of such Right
Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the
execution of this Rights Agreement any such Person was not such
a signatory.
Following the Distribution Date and receipt by the
Rights Agent of all relevant information, the Rights Agent will
keep or cause to be kept, at its office designated for such
purpose, 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, and the date of each of the
Right Certificates and the date of countersignature of each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of
Section 4(b), Section 7(e) and Section 14 hereof, at any time
after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any
Right Certificate or Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a
like number of shares of Preference Stock (or following a
Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
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 office of the Rights Agent designated for such
purpose, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably
request. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the
registered holder shall have properly completed and signed the
certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company or the Rights Agent shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 14 and Section 20(k) hereof, countersign
and deliver to the Person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested.
The Company may require payment from a Right Certificate holder
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. The Rights
Agent shall have no duty or obligation under this Section 6
unless and until it is satisfied that all such taxes and/or
governmental charges have been paid in full.
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
satisfactory to them, along with a signature guarantee and such
other further documentation as the Rights Agent may reasonably
request 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 for
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 of Rights. (a) Subject to Section 7(e)
hereof, 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 designated office of
the Rights Agent, together with payment of the aggregate
Purchase Price for the total number of one one-hundredths of
shares of Preference Stock (or shares of Common Stock, other
securities, cash or other assets, as the case may be) as to
which the Rights are then exercisable, at or prior to the
earliest of (i) the close of business on July 25, 2010 (the
"Final Expiration Date"), (ii) the time at which the Rights are
exchanged as provided in Section 24, or (iii) the time at which
the Rights are redeemed as provided in Section 23 (such
earliest date being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-hundredth of
a share of Preference Stock pursuant to the exercise of a Right
shall initially be $75.00, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall
be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
the certificate duly executed and completed accompanied by
payment of the Purchase Price for the number of one one-
hundredths of shares of Preference Stock (or shares of Common
Stock, other securities, cash or other assets, as the case may
be) to be purchased and an amount equal to any applicable tax
or governmental charge, the Rights Agent shall thereupon,
subject to Section 20(k), promptly (i) requisition from any
transfer agent of Preference Stock certificates for the number
of one one-hundredths of shares of Preference Stock to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) if the
Company shall have elected to deposit the total number of
shares of Preference Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number
of shares of Preference Stock as are to be purchased (in which
case certificates for the shares of Preference Stock
represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such request, (iii) when
necessary to comply with this Agreement, requisition from any
transfer agent of the Common Stock of the Company certificates
for the total number of shares of Common Stock to be paid in
accordance with Section 11(a)(ii) and 11(a)(iii), (iv) when
necessary to comply with this Agreement, requisition from the
Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14, (v) 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 (vi) when
necessary to comply wit this Agreement, after receipt promptly
deliver such cash to or upon the order of the registered holder
of such Right Certificate. The Rights Agent shall have no duty
or obligation under the previous sentence of this Section 7(c)
unless and until it is satisfied that all such taxes and/or
governmental charges have been paid. The payment of the then
Purchase Price may be made by certified bank check or bank
draft or money order payable to the order of the Company or the
Rights Agent. In the event that the Company is obligated to
issue securities, distribute property or pay cash pursuant to
Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are
available for issuance, distribution or payment by the Rights
Agent, if and when necessary to comply with this Agreement.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, any Rights that are or were at any time on or
after the earlier of the Distribution Date or the Shares
Acquisition Date beneficially owned by (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
became such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any
Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding (whether or not in
writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is a
part of an agreement, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void upon the occurrence of a Triggering
Event and no holder of such Rights shall have any right with
respect to such Rights under any provision of this Agreement or
otherwise from and after the occurrence of a Triggering Event.
The Company shall notify the Rights Agent when this
Section 7(e) applies and shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the Company's
failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set
forth in this Section 7 unless such registered holder shall
have (i) properly completed and signed the certificate
contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by any of the
provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
Capital Stock. (a) The Company covenants and agrees that it
will cause to be reserved and kept available out of its
authorized and unissued shares of Preference Stock (and
following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other
securities) or out of its authorized and issued shares of
Preference Stock (and, following the occurrence of a Triggering
Event, out of its authorized and issued Common Stock and/or
other securities) held in its treasury, the number of shares of
Preference Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding
Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will
take such other steps as are appropriate to assure that the
number of such shares or securities (or their equivalents)
sufficient to permit the exercise in full of all outstanding
Rights will be available upon such exercise.
(b) So long as the shares of Preference Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable upon the exercise of Rights
may be listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after such time
as the Rights become exercisable (but only to the extent that
the Company's Board of Directors determines that it is
reasonably likely that the Rights will be exercised), all
shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (X) (i)
to file, as soon as practicable following the first occurrence
of a Section 11(a)(ii) Event, or as soon as required by law, as
the case may be, a registration statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) to cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights
are no longer exercisable for such securities, and (B) the
Expiration Date and (Y) (i) to file appropriate applications
with any state or federal regulatory bodies having jurisdiction
over the issuance of the securities (or assets) purchasable
upon exercise of the Rights in order to obtain any approvals or
orders of such bodies as may be legally required, (ii) to cause
such approvals to be obtained or orders to be issued as soon as
practicable after such filing and (iii) to cause such approvals
or orders to remain effective until the earlier of (A) the date
as of which the Rights are no longer exercisable for such
securities (or assets), and (B) the Expiration Date. The
Company will also take such action as may be appropriate under
the blue sky laws of the various states. The Company may
temporarily suspend, (X) for a period of time not to exceed
ninety (90) days after the date set forth in clause (X) (i) of
the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective and (Y) for a
period of time not in excess of 180 days after such date (or
for such longer period as is required by any applicable law,
rule or regulation of any appropriate regulatory bodies), the
exercisability of the Rights in order to obtain any such
required regulatory body approvals or orders. Upon any such
suspension, the Company shall issue a public announcement and
shall give simultaneous written notice to the Rights Agent
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement and
prompt notice to the Rights Agent at such time as the
suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
shares of the Preference Stock (and following the occurrence of
a Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all taxes and
governmental charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any shares
of the Preference Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights.
The Company shall not, however, be required (a) to pay any tax
or governmental charge 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 for
the Preference Stock (or Common Stock and/or other securities,
as the case may be) in a name other than that of the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or (b) to issue or deliver any certificates for
shares of the Preference Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of any Rights
until any such tax or governmental charge shall have been paid
(any such tax or governmental charge being payable by the
holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction
that no such tax or governmental charge is due.
Section 10. Preference Stock Record Date. Each
Person in whose name any certificate for any number of shares
of Preference Stock (or Common Stock and/or other securities,
as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record
of such whole and/or fractional shares of Preference Stock (or
Common Stock and/or other securities, as the case may be)
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 taxes and governmental charges) was made
and shall show the date of countersignature; provided, however,
that if the date of such surrender and payment is a date upon
which the Preference Stock (or Common Stock and/or other
securities, as the case may be) 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 Preference
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of 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)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Preference Stock payable in shares of the Preference
Stock, (B) subdivide the outstanding Preference Stock, (C)
combine the outstanding Preference Stock into a smaller
number of shares or (D) issue any shares of its capital
stock in a reclassification of the Preference Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof,
the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the
number and kind of shares of Preference Stock or capital
stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive
upon payment of the Purchase Price then in effect the
aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior
to such date and at a time when the Preference Stock (or
Common Stock and/or other securities) transfer books of
the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after
the date of this Agreement, directly or indirectly,
(1) merges into the Company or otherwise combines
with the Company and the Company is the continuing or
surviving corporation of such merger or combination
and the Common Stock of the Company remains
outstanding and unchanged, (2) sells, purchases,
leases, exchanges, mortgages, pledges, transfers or
otherwise disposes (in one transaction or a series of
transactions), to, from or with the Company or any of
its Subsidiaries, assets on terms and conditions less
favorable to the Company than the Company would be
able to obtain through arm's-length negotiation with
an unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a) hereof, (3)
receives any compensation from the Company or any of
its Subsidiaries other than compensation for full-
time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries')
past practices, or (4) receives a direct or indirect
benefit (except proportionately as a shareholder and
except if resulting from a requirement of law or
government regulation), of any loans, advances,
guarantees, pledges or other financial assistance or
any tax credits or other tax advantage provided by
the Company or any of its Subsidiaries, or
(B) 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 Person organized, appointed or established by
the Company or any Subsidiary of the Company for or
pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, becomes
at any time after the Rights Dividend Declaration
Date, the Beneficial Owner of 10% or more of the
shares of Common Stock then outstanding unless the
event causing the threshold to be crossed is (1) a
transaction set forth in Section 13(a) hereof, or (2)
an acquisition of shares of Common Stock pursuant to
an offer for all outstanding shares of Common Stock
at a price and upon such terms and conditions as a
majority of the Board of Directors of the Company
determines to be (a) at a price which is fair to
stockholders (other than the Person or any Affiliate
or Associate thereof on whose behalf the offer is
being made) taking into account all factors which
such members of the Board deem relevant including,
without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value and
(b) otherwise in the best interests of the Company
and its stockholders (other than the Person or any
Affiliate or Associate thereof on whose behalf the
offer is being made), or
(C) during such time as there is an Acquiring
Person, (1) there is any failure to declare and pay
at the regular date therefor any full quarterly
dividends (whether or not cumulative) on any
outstanding preferred stock or preference stock of
the Company (except to the extent such declaration or
payment would be prohibited under the laws of the
Company's jurisdiction of incorporation or as
approved by the holders of a majority of the then
outstanding shares of Common Stock beneficially owned
by Persons other than the Acquiring Person or its
Affiliates or Associates), (2) there is any reduction
in the annual rate of dividends paid on the Common
Stock (except to reflect any subdivision of the
Common Stock or as required under the laws of the
Company's jurisdiction of incorporation or as
approved by the holders of a majority of the then
outstanding shares of Common Stock beneficially owned
by Persons other than the Acquiring Person or its
Affiliates or Associates), (3) there is a failure to
increase the annual rate of dividends as necessary to
reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or any
similar transaction which has the effect of reducing
the number of outstanding shares of the Common Stock
(except to the extent such increase in the rate of
dividends would be prohibited under the laws of the
Company's jurisdiction of incorporation or as
approved by the holders of a majority of the then
outstanding shares of Common Stock beneficially owned
by Persons other than the Acquiring Person or its
Affiliates or Associates), or (4) there is any
reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or
any merger or consolidation of the Company with any
of its Subsidiaries or any other transaction or
series of transactions (whether or not with or into
or otherwise involving an Acquiring Person) which has
the effect, directly or indirectly, of increasing by
more than 1% the proportionate share of the
outstanding shares of any class of equity or
convertible securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by
any Acquiring Person or any Associate or Affiliate of
any Acquiring Person
then, within five (5) days after the date of the
occurrence of an event described in Section 11(a)(ii)(B)
hereof and promptly following the occurrence of any event
described in Section 11(a)(ii)(A) or (C) hereof, proper
provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall
thereafter have a right to receive, upon exercise thereof
at the then current Purchase Price for the number of one
one-hundredths of a share of Preference Stock for which
such Right is then exercisable in accordance with the
terms of this Agreement, in lieu of shares of Preference
Stock, such number of shares of the Common Stock of the
Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of one one-hundredths of a share of Preference
Stock for which a Right is then exercisable and dividing
that product by (y) 50% of the current market price per
share of the Common Stock of the Company (determined
pursuant to Section 11(d)) on the date of the occurrence
of any one of the events listed above in this subparagraph
(ii) (such number of shares are hereinafter referred to as
the "Adjustment Shares") provided, that the Purchase Price
and the number of Adjustment Shares shall be further
adjusted as provided in this Agreement to reflect any
events occurring after the date of such first occurrence.
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's Restated
Articles of Incorporation, as amended, but not outstanding
or reserved for issuance for purposes other than upon
exercise of the Rights and which may otherwise be legally
Issued at such time for such purpose are not sufficient to
permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Company shall
(A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment
Shares, upon exercise of the Rights and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock or
preference stock which the Board of Directors of the
Company have deemed to have the same value as shares of
Common Stock (such shares of preferred stock or preference
stock, "common stock equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based
upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's rights of
redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith
that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period
set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public
announcement and shall give simultaneous written notice to
the Rights Agent stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer
in effect (with prompt notice thereof to the Rights
Agent). For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the current market
price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger
Date and the value of any "common stock equivalent" shall
be deemed to have the same value as the Common Stock on
such date. The Company shall give the Rights Agent notice
of the selection of any "common stock equivalent" under
this Section 11(a)(iii).
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders
of Preference Stock entitling them (for a period expiring
within 45 calendar days after such record date) to
subscribe for or purchase Preference Stock (or securities
having substantially the same rights, privileges and
preferences as the shares of Preference Stock ("equivalent
preference stock") or convertible into the Preference
Stock or equivalent preference stock) at a price per share
of the Preference Stock or equivalent preference stock (or
having a conversion price per share, if a security
convertible into the Preference Stock or equivalent
preference stock) less than the current market price (as
defined in Section 11(d) per share of the Preference Stock
or equivalent preference stock, as the case may be) on
such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, of which the numerator shall be the
number of shares of Preference Stock outstanding on such
record date plus the number of shares of Preference Stock
or equivalent preference stock which the aggregate
offering price of the total number of shares of Preference
Stock or equivalent preference stock so to be offered
(and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at
such current market price and of which the denominator
shall be the number of shares of Preference Stock
outstanding on such record date plus the number of
additional shares of Preference Stock and/or equivalent
preference 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 price may be paid by delivery of
consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares of
Preference Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in
the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of Preference
Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular periodic cash
dividend at a rate not in excess of 125% of the rate of
the last cash dividend theretofore paid or a dividend
payable in Preference Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a
fraction, of which the numerator shall be the current
market price per share of Preference Stock (as defined in
Section 11(d)) on such record date, less the fair market
value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so
to be distributed or of such subscription rights or
warrants applicable to one share of Preference Stock and
of which the denominator shall be such current market
price per share of Preference 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.
(d)(i) For the purpose of any computation hereunder,
other than computations made pursuant to Section
11(a)(iii), the "current market price" per share of Common
Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to, but not
including, such date and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per
share of such Common Stock for the ten (10) consecutive
Trading Days immediately following, but not including,
such date; provided, however, that in the event that the
current market price per share of Common Stock is
determined during the period following the announcement by
the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of
such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights) or (B) any
subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of the requisite
30 Trading Day or 10 Trading Day period, as set forth
above after the ex-dividend date for such dividend or
distribution or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the current market price shall be appropriately
adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of the Common Stock are
not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the shares of the Common Stock are listed or
admitted to trading or, if the shares of the Common Stock
are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of the Common
Stock are not quoted by such organization, the average of
the closing bid and asked prices as furnished by a
professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in
the Common Stock, the fair value of such shares on such
date shall be as determined in good faith by the Board of
Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of
business or, if the shares of the Common Stock are not
listed or admitted to trading on any national securities
exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of New York are
not authorized or obligated by law or executive order to
close. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per share of Preference Stock
shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the current
market price per share of Preference Stock cannot be
determined in the manner provided above or if the
Preference Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preference Stock
shall be conclusively deemed to be an amount equal to 100
(as such number may be appropriate 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.
If neither the Common Stock nor the Preference Stock is
publicly held or so listed or traded, "current market
price" per share of the Preference Stock shall mean the
fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of
one one-hundredths of a share of Preference Stock shall be
equal to the "current market price" of one share of
Preference Stock divided by 100.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share
of Common Stock or one-millionth of a share of Preference
Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
section 11(a) or Section 13(a), the holder of any Right
thereafter exercised shall become entitled to receive any
shares of capital stock other than shares of Preference
Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase
Price thereof 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 (o), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preference Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths
of a share of Preference Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each
adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of
shares (calculated to the nearest one-millionth) obtained
by (i) multiplying (x) the number of shares covered by a
Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number
of Rights, in substitution for any adjustment in the
number of shares of Preference 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 shares of Preference Stock
for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-
thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after
the adjustment of the Purchase Price. The Company shall
make a public announcement and shall give simultaneous
written notice to the Rights Agent of its election to
adjust the number of Rights, indicating the record date
for 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 Right Certificates have been
issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to
holders of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, 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 so to be distributed shall
be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preference Stock
issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the
number of shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-
hundredth of the then stated value, if any, of a share of
Preference 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 such number of one one-hundredths of a share
of such Preference Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer (and shall promptly notify the
Rights Agent of any such election) until the occurrence of
such event the issuance to the holder of any Right
exercised after such record date the shares of Preference
Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and
above the shares of Preference 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 bill or other
appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make
such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11,
as and to the extent that the Board of Directors of the
Company shall determine to be advisable in order that any
consolidation or subdivision of shares of Preference
Stock, issuance wholly for cash of any of shares of
Preference Stock at less than the current market price,
issuance wholly for cash of the Preference Stock or
securities which by their terms are convertible into or
exchangeable for Preference Stock, stock dividends or
issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the
Company to holders of its Preference Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Sections 23, 24 and 27 hereof, take (nor will it permit
any of its Subsidiaries to take) any action if at the time
such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary
of the Company in a transaction which complies with
Section 11(n)), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction
which complies with Section 11(n)), or (iii) sell or
transfer (or permit any of its Subsidiaries to 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 or Persons (other than the
Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n)) if
(x) at the time of or immediately after such
consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded
by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates
and Associates.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at
any time after the Rights Dividend Declaration Date and
prior to the Distribution Date (i) declare and pay a
dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock
following any such event shall equal the result obtained
by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a
fraction, the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such
event.
(q) Notwithstanding anything in this Agreement to
the contrary, prior to the Distribution Date, the Company
may, in lieu of making any adjustment to the Purchase
Price, adjust the number of shares of Preference Stock
eligible for purchase on exercise of each Right or the
number of Rights outstanding, which adjustment would
otherwise be required by Section 11(a)(i), 11(b), 11(c),
11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors of the
Company (whose determination shall be conclusive) deems
appropriate in the circumstances and not inconsistent with
the objectives of the Board of Directors of the Company in
adopting this Agreement and such Sections.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as
provided in Section 11 or 13, the Company shall (a) promptly
prepare a certificate setting forth such adjustment, and a
brief, reasonably detailed, statement of the facts and
computations accounting for such adjustment and the adjusted
Purchase Price, (b) promptly file with the Rights Agent and
with each transfer agent for the Preference 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. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained. The Rights Agent shall have no
duty with respect to and shall not be deemed to have knowledge
of any such adjustment unless and until it shall have received
such a certificate.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. (a) In the event that,
following the Shares Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(n)) and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(n)) shall consolidate, merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection
with such consolidation or 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
more than 50% of the assets or earning power of the Company and
its subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company or any of its Subsidiaries in
one or more transactions each of which complies with Section
11(n) hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof) proper provision shall be
made so that (i) each holder of a Right (except as provided in
Section 7(e)) 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, such number of
validly issued, fully paid, non-assessable and freely tradable
shares of Common Stock of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of
call or first refusal, or other adverse claims as shall be
equal to the result obtained by (1) multiplying the then
current Purchase Price by the then number of one one-hundredths
of a share of Preference Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number
of such one one-hundredths of a share for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in Effect
immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the
current market price per share of the Common Stock of such
Principal Party (determined in the manner described in Section
11(d)) 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
Section 13 Event, 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 shall
thereafter apply to such Principal Party and (iv) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of
its Common Stock in accordance with Section 9) 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
and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger
or consolidation, and if no securities are so issued, the
Person that is the other party to the merger or
consolidation; and
(ii) in the case of any transaction described in (z)
of the first sentence in this Section 13, the Person that
is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction
or transactions;
provided, however, that in any such case, (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 of another corporation the Common
Stock of which is and has been so registered, "Principal Party"
shall refer to such other corporation; (y) in case such Person
is a Subsidiary, directly or indirectly, of more than one
corporation, the Common Stocks of two or more of which are and
have been so registered, "Principal Party" shall refer to
whichever of such corporations is the issuer of the Common
Stock having the greatest market value.
(c) The Company shall not consummate any Section 13
Event unless all regulatory approvals for the consummation of
such Section 13 Event and the exercise of the Rights in
accordance with the terms of this Agreement have been obtained
and the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which are neither
outstanding nor reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental
agreement 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 under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, 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
Act) until the Expiration Date; and
(ii) 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 Section 13 Events. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of Section
13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a
tender offer or exchange offer for all outstanding shares of
Common Stock, which complies with the provisions of Section
11(a)(ii)(B)(2) hereof (or a wholly-owned Subsidiary of any
such Person or Persons), (ii) the price per share of Common
Stock offered in such transaction is not less than the price
per share of Common Stock paid to all holders of Common Stock
whose shares were purchased pursuant to such tender offer or
exchange offer, and (iii) the form of consideration being
offered to the remaining holders of Common Stock pursuant to
such transaction is the same as the form of consideration paid
pursuant to such offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights
hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then
in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date
as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preference Stock (other than fractions
which are integral multiples of one one-hundredth of a share of
Preference Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than
fractions which are integral multiples of one one-hundredth of
a share of Preference Stock). In lieu of fractional shares
that are not integral multiples of one one-hundredth of a share
of Preference Stock, the Company may pay to the registered
holders of Right Certificates at the time the Rights evidenced
thereby 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 Preference Stock. For purposes of
this Section 14(b), the current market value of one one-
hundredth of a share of Preference Stock shall be one one-
hundredth of the closing price of a share of Preference Stock
(as determined pursuant to Section 11(d)(ii)) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event
the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, 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 one
(1) share of Common Stock. For purposes of this Section 14(c),
the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right,
except as otherwise permitted by this Section 14.
(e) The Rights Agent shall have no duty or
obligation with respect to this Section 14 unless and until it
has received specific instructions (and sufficient cash, if
required) from the Company with respect to its duties and
obligations under such Section.
Section 15. Rights of Action. All rights of action
in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of
the Common 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, in his or her own
behalf and for his or her 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 or
her right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject
to 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
the 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 office of the
Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed,
along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably
request;
(c) subject to Section 6(a), Section 7(e) and
Section 7(f) hereof, 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, subject to the last sentence
of Section 7(e) hereof, shall be required to be affected
by any notice to the contrary;
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent
shall have any liability to any holder of a Right or other
Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any
preliminary or permanent injunction or other order,
decree, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the
Company must use its best efforts to have any such order,
decree, judgment or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the number of shares of Preference
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 shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders 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), 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 preparation, delivery, administration,
execution and amendment 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, damage, judgment, fine, penalty,
claim, demand, settlement, cost or expense, incurred without
negligence, bad faith or willful misconduct on the part of the
Rights Agent (as finally determined by a court of competent
jurisdiction) (including the reasonable fees and expenses of
counsel), for any action taken, suffered or omitted by the
Rights Agent in connection with the acceptance and
administration of this Agreement, including, without
limitation, the costs and expenses of defending against any
claim of liability in the premises. The indemnity provided
herein shall survive the termination of this Agreement and the
termination and the expiration of the Rights.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of, any action taken, suffered
or omitted by it in connection with the acceptance and
administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, instruction, adjustment notice
certificate, statement, or other paper or document believed by
it to be genuine (upon any of which the Rights Agent is
authorized to rely) and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or
Persons.
In addition to the foregoing, the Rights Agent shall
be protected and shall incur no liability for, or in respect
of, any action taken, suffered or omitted by it in connection
with the acceptance and administration of this Agreement in
reliance upon (i) the proper execution of the certification
concerning beneficial ownership (upon which the Rights Agent is
authorized to rely) appended to the Form of Assignment and the
Form of Election to Purchase included as part of Exhibit B
hereto (the "Certification"), unless the Rights Agent shall
have actual knowledge that, as executed, the Certification is
untrue or (ii) the non-execution or failure to complete the
Certification including, without limitation, any refusal to
honor any otherwise permissible assignment or election by
reason of such non-execution or failure.
The Rights Agent is not deemed to have knowledge, a
duty, or notice unless the Company has given it actual notice.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any Person into which the Rights Agent
or any successor Rights Agent may be merged or with which it
may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the
shareholder services 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 Person would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent
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 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 only the duties and obligations imposed by the
express terms of this Agreement upon the following terms and
conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with the legal
counsel (who may be legal counsel for the Company), and
the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent,
and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted by it in
good faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established
by the Company prior to taking, omitting or suffering any
action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the
Chairman of the Board, the President, any Vice President,
the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall
be full authorization and protection to the Rights Agent,
and the Rights Agent shall incur no liability for or in
respect of any action taken, omitted 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
(as finally determined by a court of competent
jurisdiction), and the issuance or non-issuance of a Right
Certificate or Preference Stock or other security issued
in lieu of Preference Stock in accordance with
instructions given to the Rights Agent by the Company
pursuant to Section 20(k) hereof or in accordance with the
terms hereof shall not constitute negligence, bad faith or
willful misconduct. Anything in this Agreement to the
contrary notwithstanding, in no event shall the Rights
Agent be liable for special, punitive, indirect,
incidental or consequential loss or damage of any kind
whatsoever (including, but not limited to, lost profits),
even if the Rights Agent has been advised of the
possibility of such loss or damage.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals
contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability
for, or be under any responsibility in respect of the
validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any
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 or 13 or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice 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 Preference
Stock or Common Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any
shares of Preference Stock or Common Stock 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 the advice or instructions with respect
to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof
from any one of the Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the
Company, and is authorized to apply to such officers for
advice or instructions in connection with its duties, and
such advice or instructions shall be full authorization
and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action
taken, omitted or suffered to be taken by it in good faith
in accordance with the advice or instructions of any such
officer (the Rights Agent may conclusively rely on the
most recent advice or instructions given by any such
officer). An application by the Rights Agent for advice
or instructions may set forth in writing any action
proposed to be taken, suffered or omitted by the Rights
Agent with respect to its duties and obligations under
this Agreement and the date on and/or after which such
action shall be taken, and the Rights Agent shall not be
liable for any action taken, suffered or omitted in
accordance with a proposal included in any such
application on or after the date specified therein (which
date shall not be less than one Business Day after the
Company receives such application) without the consent of
the Company unless prior to taking, suffering or omitting
such action, the Rights Agent has received written
instructions in response to application specifying the
actions to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, affiliate,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of
the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any
duty hereunder either by 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 or any other Person resulting from any such
act, default, neglect or misconduct, absent negligence,
bad faith or willful misconduct on the part of the Rights
Agent in the selection 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
it reasonably believes that repayment of such funds or
adequate indemnification against such risk or liability is
not assured it.
(k) If, with respect to any Rights 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 properly completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such
requested exercise or transfer without first consulting
the Company. The Company shall give the Rights Agent
prompt written instructions as to the action to be taken
regarding the Rights Certificates involved. The Rights
Agent shall not be liable for acting in accordance with
such instructions.
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 thirty
(30) days' notice in writing mailed to the Company and to each
transfer agent of the Preference Stock and the Common Stock by
registered or certified mail, and, at the Company's expense, to
the holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights
Agent upon thirty (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 Preference Stock and the Common
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 to
the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the Company
shall become the temporary Rights Agent and the registered
holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a Person organized and
doing business under the laws of the United States or of the
State of New York (or of any other state of the United States
so long as such Person is authorized to do business in the
State of New York), in good standing and subject to supervision
or examination by federal or state authority or which has at
the time of its appointment as Rights Agent a combined capital
and surplus of at least $25 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Preferred Stock and
the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance
with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right
Certificate would be issued, and (ii) no such Right Certificate
shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the
issuance thereof.
Section 23. Redemption and Termination. (a) The
Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the close of business on the
tenth calendar day following the Shares Acquisition Date (or if
the Shares Acquisition Date shall have occurred prior to the
Record Date, the close of business on the tenth day following
the Record Date), or (y) the Final Expiration Date, 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 the "Redemption Price"), and the
Company may, at its option, pay the Redemption Price either in
shares of its Common Stock (valued at their current market
price as defined in Section 11(d)(i) on the date of the
redemption), other securities, cash or other assets.
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors
in its sole discretion may establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. Within 10 days after the
action of the Board of Directors of the Company ordering the
redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by
mailing such notice to the Rights Agent and to all such holders
at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common 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. Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section
23, and other than in connection with the repurchase 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 null and void pursuant to the provisions of Section 7(e)
hereof) for shares of 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").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to Section 24(a) and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of the holders 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. Promptly after the action of
the Board of Directors of the Company ordering an exchange of
the Rights, the Company shall promptly give notice of any such
exchange to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders
at each holder's last address as it appears upon the registry
books of the Rights Agent; provided, however, that the failure
to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have
become null and 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 shares of Preference
Stock (or equivalent preference stock, as such term is defined
in Section 11(b) hereof) for shares of Common Stock
exchangeable for the Rights, at the initial rate of one one-
hundredth of a share of Preference Stock (or equivalent
preference stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the dividend
rights of the Preference Stock pursuant to the terms thereof.
(d) In the event that there shall not be sufficient
shares of Common Stock or Preference Stock issued, but not
outstanding, or authorized but unissued, to permit any exchange
of Rights as contemplated in accordance with this Section 24 or
that any regulatory actions or approvals are required in
connection therewith, the Company shall take all such action as
may be necessary to authorize additional Common Stock or
Preference Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue
fractional shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock pursuant to
this Section 24. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this Section
24(e), the current market value of a whole share of Common
Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
The Rights Agent shall have no duty or obligation
with respect to this Section 24(e) unless and until it has
received specific instructions (and sufficient cash, if
required) from the Company with respect to its duties and
obligations under such Section.
(f) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any share of Common
Stock exchangeable for a Right (i) common stock equivalents
(ii) cash, (iii) debt securities of the Company, (iv) other
assets, or (v) any combination of the foregoing, having an
aggregate value which the Board of Directors of the Company
shall have determined in good faith to be equal to the current
market price of one share of Common Stock (determined pursuant
to Section 11(d) hereof) on the Trading Day immediately
preceding the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the
Company shall propose at any time following the Distribution
Date (a) to pay any dividend payable in stock of any class to
the holders of Preference Stock or to make any other
distribution to the holders of Preference Stock (other than a
regular periodic cash dividend at a rate not in excess of 125%
of the rate of the last cash dividend theretofore paid), or (b)
to offer to the holders of Preference Stock rights or warrants
to subscribe for or to purchase any additional shares of
Preference Stock or shares of stock of any class or any other
securities, rights or options, or (c) to effect any
reclassification of Preference Stock (other than a
reclassification involving only the subdivision of outstanding
Preference Stock), or (d) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(n)
hereof), or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n) hereof),
or (e) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to
the Rights Agent and to each holder of a Right, in accordance
with Section 26, a notice of such proposed action, which shall
specify the record date for the purposes of such stock
dividend, distribution of rights or Rights, 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 Preference Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by
clause (a) or (b) above at least twenty (20) days prior to the
record date for determining holders of the Preference Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the Preference Stock, whichever shall
be the earlier.
In case a Section 11(a)(ii) Event shall occur, then,
in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a
Right, to the extent feasible and in accordance with Section
26, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii) and all references in the
preceding paragraph to Preference Stock shall be deemed to
thereafter refer to Common Stock and/or other securities, as
the case may be.
Section 26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the holder of any Right Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
The Empire District Electric Company
602 Joplin Street
Joplin, Missouri 64801
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, New Jersey 07660-2108
Attention: General Counsel
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder
of any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to
the earlier of the Distribution Date or the Shares Acquisition
Date and subject to the penultimate sentence of this Section
27, the Company may from time to time supplement or amend this
Agreement without the approval of any holders of Right
Certificates or Common Stock. From and after the earlier of
the Distribution Date or the Shares Acquisition Date, and
subject to the penultimate sentence of this Section 27, the
Company may from time to time supplement or amend this
Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein,
or (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders
of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided,
however, that this Agreement shall not be supplemented or
amended to lengthen in any way, (A) a time period relating to
when the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or benefits to, the holders of
Rights (other than any Acquiring Person and its Affiliates and
Associates) and such lengthening occurs pursuant to clause
(iii) of this sentence. Upon the delivery of a certificate
from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such
supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment
would adversely affect the Rights Agent's interests under this
Agreement. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of shares of Preferred Stock for
which a Right is then exercisable. Prior to the earlier of the
Shares Acquisition Date or the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board
of Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the provisions of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the
Board of Directors of the Company or the Company, or as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and
determinations (including, for the purpose of clause (ii)
below, all omissions with respect to the foregoing) which are
done or made by the Board of Directors of the Company in good
faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right
Certificates and all other Persons, and (ii) not subject the
Board of Directors of the Company to any liability to the
holders of the Right Certificates. The Rights Agent is
entitled to assume that the Board of Directors of the Company
acted in good faith in making such actions, calculations,
interpretations and determinations.
Section 30. Benefits of This Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date,
the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment
that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be
reinstated (and the Company shall promptly notify the Rights
Agent of such reinstatement) and shall not expire until the
close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Kansas 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 that the rights,
duties and obligations of the Rights Agent under this Agreement
shall be governed by the laws of the State of New York.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
Section 35. UCU Merger. Notwithstanding any
provision herein to the contrary, neither UCU nor any of its
Affiliates or Associates shall be considered an Acquiring
Person under this Agreement and no Shares Acquisition Date or
Distribution Date has occurred or will occur, in any such case
as a result of the approval, execution or delivery of the
Merger Agreement or the consummation of the transactions
contemplated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of
the day and year first above written.
[SEAL]
THE EMPIRE DISTRICT ELECTRIC COMPANY
Attest:
By: /s/ Janet S. Watson By: /s/ Robert B. Fancher
Name: Janet S. Watson Name: Robert B. Fancher
Title: Secretary-Treasurer Title: Vice President-Finance
[SEAL]
Attest: CHASEMELLON SHAREHOLDER SERVICES,
L.L.C.
By: /s/ Deborah Bass By: /s/ Robert Kavanagh
Name: Deborah Bass Name: Robert Kavanagh
Title: Relationship Title: Vice President
Manager
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _______Rights
NOT EXERCISABLE AFTER JULY 25, 2010 OR EARLIER
IF NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]1
THE EMPIRE DISTRICT ELECTRIC COMPANY
Right Certificate
This certifies that , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights Agreement
dated as of April 27, 2000 (the "Rights Agreement") between The
Empire District Electric Company, a Kansas corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C., a New
Jersey limited liability company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M. (New York City time) on July 25, 2010 at the
designated office of the Rights Agent, or its successors as
Rights Agent, in New York, New York, one one-hundredth of a
fully paid nonassessable share of the Series A Participating
Preference Stock, without par value (the "Preference Stock"),
1 The portion of the legend in brackets shall be inserted only if applicable.
of the Company, at a purchase price of $75.00 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 and related certificate duly executed,
along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. The
number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchased upon exercise thereof)
set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of April 27, 2000,
based on the Preference Stock of the Company as constituted at
such date.
Upon the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement), if the Rights
evidenced by this Right Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who
after such transfer, became an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, such Rights
shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence
of such Triggering Event.
Notwithstanding anything herein to the contrary,
neither UCU (as defined below) nor any of its Affiliates or
Associates is an "Acquiring Person" and no "Shares Acquisition
Date" or "Distribution Date" has occurred or shall occur as a
result of the approval, execution or delivery of the Agreement
and Plan of Merger, between UtiliCorp United Inc., a Delaware
corporation ("UCU"), and the Company, dated as of May 10, 1999,
or the consummation of the transactions contemplated
thereunder.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Preference Stock
(or, in certain circumstances, common stock and/or other
securities) which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain
events, including Triggering Events (as such term is defined in
the Rights Agreement).
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 above-mentioned office of the
Rights Agent, and at the executive offices of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the designated office of the
Rights Agent, along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably
request, 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 one
one-hundredths of a share of Preference 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, along with
a signature guarantee and such other and further documentation
as the Rights Agent may reasonably request, 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 (i) redeemed by
the Company at a redemption price of $.0l per Right or
(ii) exchanged by the Company in whole or in part for shares of
common stock or Preference Stock.
No fractional shares of Preference Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of
one one-hundredth of a share of Preference Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of the Preference Stock or of any other securities of
the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice
of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
CERTIFICATE
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
, 20[ ].
[SEAL]
ATTEST: THE EMPIRE DISTRICT ELECTRIC
COMPANY
By: By:
__________________________
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By:
Authorized Signature
Date:
[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 Certificates.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ___________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ________, ____
____________________________
_____
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a commercial bank or trust
company or by a member of the New York Stock Exchange.)
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 Guaranteed:
(Signatures must be guaranteed by a commercial bank or trust
company or by a member of the New York Stock Exchange.)
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the
face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
To The Empire District Electric Company:
The undersigned hereby irrevocably elects to exercise
_________ Rights represented by this Right Certificate to
purchase the shares of the Preference Stock issuable upon the
exercise of such Rights (or such other securities of the
Company or of any other Person which may be issuable upon the
exercise of the Rights) and requests that certificates for such
shares be issued in the name of:
Please insert social security or
other taxpayer identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate
for the balance remaining of such Rights shall be registered in
the name of and delivered to:
Please insert social security or
other taxpayer identifying number
(Please print name and address)
Dated: ________, ____
____________________________
_____
Signature
Signature Guaranteed:
(Signatures must be guaranteed by a commercial bank or trust
company or by a member of the New York Stock Exchange.)
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) 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
NOTICE
The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the
face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT C
Summary of Rights To Purchase Preference Stock
On April 27, 2000 the Board of Directors of The
Empire District Electric Company declared a dividend
distribution of one Right for each outstanding share of Common
Stock, $1 par value (the "Common Stock"), of the Company. The
distribution was payable on July 26, 2000 (the "Record Date")
to the stockholders of record on the Record Date. Each Right
entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Participating Preference
Stock (the "Preference Stock"), at a price of $75.00 per one
one-hundredth share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in the Rights Agreement between the Company and the
Rights Agent.
Until the earlier to occur of (i) ten calendar days
following the date (the "Shares Acquisition Date" (which date
shall not be deemed to have occurred solely by reason of the
approval, execution or delivery of the Agreement and Plan of
Merger (the "Merger Agreement"), dated as of May 10, 1999,
between the Company and UtiliCorp United Inc., a Delaware
corporation ("UCU") or the consummation of the transactions
contemplated thereby)) of public announcement that a person or
group of affiliated or associated persons (an "Acquiring
Person" (which term shall not include UCU or any of its
respective "Affiliates" and "Associates" which may otherwise
become Acquiring Persons solely by reason of the approval,
execution or delivery of the Merger Agreement or the
consummation of the transactions contemplated thereby))
acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of the
Common Stock (a "Substantial Block") or (ii) ten calendar days
following the commencement or announcement of an intention to
make a tender offer or exchange offer if, upon consummation
thereof, such person would be an Acquiring Person (the earlier
of such dates being called the "Distribution Date" (which date
shall not be deemed to have occurred solely by reason of the
approval, execution or delivery of the Merger Agreement or the
consummation of the transactions contemplated thereby)), the
Rights will be evidenced with respect to any of the Company's
Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificates. A Person shall not be deemed
the beneficial owner of a Substantial Block if such person,
together with all affiliates and associates of such person, (a)
beneficially own less than 20% of the outstanding shares of
Common Stock, (b) acquired all of such shares without the
intention of effecting control of the Company, and (c) dispose
of enough shares within ten calendar days of having acquired a
Substantial Block such that they would no longer beneficially
own 10% or more of the outstanding shares of Common Stock. 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 or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new
issuance of the Company's Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any of the Company's
Common Stock certificates outstanding as of the Record Date
will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Company's Common Stock as
of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on
July 25, 2010 unless earlier redeemed or exchanged by the
Company as described below.
In the event that (i) the Company is the surviving
corporation in a merger with an Acquiring Person and its Common
Stock is not changed or exchanged, (ii) a Person becomes the
beneficial owner of more than 10% of the then outstanding
shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which the Board of Directors
of the Company determines to be fair to and otherwise in the
best interests of the Company and its shareholders), (iii) an
Acquiring Person engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, or (iv)
during such time as there is an Acquiring Person, an event
occurs which results in such Acquiring Person's ownership
interest being increased by more than 1% (e.g., a reverse stock
split), at any time following the Distribution Date, each
holder of a Right will thereafter have the right to receive,
upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a
value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence
of any of the events set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring
Person will be null and void.
In the event that, at any time following the Shares
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction (other than a merger
described in the immediately preceding paragraph or a merger
which follows an offer described in the immediately preceding
paragraph), or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right
(except Rights which previously have been annulled and voided
as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a
value equal to two times the Exercise Price of the Right. The
events set forth in this paragraph and in the preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of shares
of Preference Stock (or Common Stock, cash, property or other
securities, as the case may be) issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Preference
Stock, (ii) upon the grant to holders of the Preference Stock
of certain rights or warrants to subscribe for shares of the
Preference Stock or convertible securities at less than the
current market price of the Preference Stock or (iii) upon the
distribution to holders of the Preference Stock of evidences of
indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings or dividends
payable in the Preference Stock) or of subscription rights or
warrants (other than those referred to above).
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 (other than fractional
shares which are integral multiples of one one-hundredth of a
share of Preference Stock) and, in lieu thereof, an adjustment
in cash will be made based on the market price of the
Preference Stock on the last trading date prior to the date of
exercise.
At any time after there is an Acquiring Person, and
prior to the acquisition by such Acquiring Person of 50% or
more of the outstanding Common Stock, the Board of Directors
may exchange the Rights (other than Rights owned by the
Acquiring Person which shall have become null and void), in
whole or in part, at an exchange ratio of one share of Common
Stock (or a fraction of a share of Preference Stock having the
same market value) per Right (subject to adjustment).
At any time prior to 5:00 P.M. New York City time on
the tenth calendar day following the Shares Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at
a price of $.0l per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
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.
The Preference Stock will rank junior to all series
of the Company's cumulative preferred stock with respect to
payment of dividends and as to distribution of assets in
liquidation. Each share of Preference Stock will have a
quarterly dividend rate per share equal to the greater of $1.00
or 100 times the per share amount of any dividend (other than a
dividend payable in shares of Common Stock or a subdivision of
the Common Stock) declared from time to time on the Common
Stock, subject to certain adjustments. The Preference Stock
will not be redeemable. In the event of liquidation, the
holders of the Preference Stock will be entitled to receive a
preferred liquidation payment per share of $7,500 (plus accrued
and unpaid dividends) or, if greater, an amount equal to 100
times the payment to be made per share of Common Stock, subject
to certain adjustments. Generally, each share of Preference
Stock will vote together with the Common Stock and any series
of cumulative preferred or preference stock entitled to vote in
such manner and will be entitled to 100 votes, subject to
certain adjustments. In the event of any merger,
consolidation, combination or other transaction in which shares
of Common Stock are exchanged for or changed into other stock
or securities, cash and/or other property, each share of
Preference Stock will be entitled to receive 100 times the
aggregate amount of stock, securities, cash and/or other
property, into which or for which each share of Common Stock is
changed or exchanged, subject to certain adjustments. The
foregoing dividend, voting and liquidation rights of the
Preference Stock are protected against dilution in the event
that additional shares of Common Stock are issued pursuant to a
stock split or stock dividend or distribution. Because of the
nature of the Preference Stock's dividend, voting, liquidation
and other rights, the value of the one one-hundredth of a share
of Preference Stock purchasable with each Right is intended to
approximate the value of one share of Common Stock.
Other than those provisions relating to the principal
economic terms of the Rights and the time period within which
to redeem the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the
Company prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company in order to cure any
ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, with
certain limitations, to shorten or lengthen any time period
under the Rights Agreement.
So long as the Rights are attached to the Common
Stock, the Company will issue one Right with each new share of
Common Stock so that all such shares will have attached Rights.
500,000 shares of Preference Stock have been reserved for
issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person who attempts
to acquire the Company without conditioning his offer on a
substantial number of Rights being acquired. The Rights will
not affect a transaction approved by the Company prior to the
existence of an Acquiring Person, because the Rights can be
redeemed before the consummation of such transaction.
_______________________________