Exhibit 4b
AMENDED AND RESTATED
RIGHTS AGREEMENT
Amended and Restated Rights Agreement, dated as of June
22, 1990 between Tandy Corporation, a Delaware corporation
(the "Company"), and The First National Bank of Boston, a
national banking association (the "Rights Agent").
Whereas, on August 15, 1986, the Board of Directors of
the Company authorized and declared a dividend of one
preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding as
of the close of business on August 29, 1986, each Right
representing the right to purchase one one-thousandth of a
share of Series A Junior Participating Preferred Stock,
without par value, of the Company having the rights and
preferences set forth in the form of the Certificate of
Designation, Preferences and Rights attached hereto as
Exhibit A, upon the terms and subject to the conditions
herein set forth, and further authorized the issuance of one
Right with respect to each Common Share that shall become
outstanding between August 29, 1986 and the earliest of the
Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are in defined in Sections 3
and 7 hereof);
Whereas, on June 24, 1988, the Board of Directors of the
Company resolved to amend this Agreement and such amendments
became effective by agreement with the Rights Agent;
Whereas, on June 22, 1990, the Board of Directors of the
Company resolved further to amend and to restate in its
entirety this Agreement, and such amendments became effective
by agreement with the Rights Agent (the "Second Amendment
Date").
Accordingly, 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 who
or which, together with all Affiliates and Associates of such
Person, without the prior approval of at least a majority of
the Disinterested Directors (as hereinafter defined), shall
be the Beneficial Owner of 15% or more of the Common Shares
then outstanding (other than as a result of a Permitted Offer
(as hereinafter defined)) or was such a Beneficial Owner at
any time after the date hereof, whether or not such person
continues to be the Beneficial Owner of 15% or more of the
then outstanding Common Shares. Notwithstanding the
foregoing, (A) the term "Acquiring Person" shall not include
(i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary
of the Company, or (iv) any Person or entity organized,
appointed or established by the Company for or pursuant to
the terms of any such plan, and (B) no Person shall be deemed
to be an "Acquiring Person" (X) as a result of the
acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases
the proportional number of shares beneficially owned by such
Person together with all Affiliates and Associates of such
Person, provided, that if (i) a Person would become an
Acquiring Person (but for the operation of this sentence) as
a result of the acquisition of Common Shares by the Company,
and (ii) after such share acquisition by the Company, such
Person, or an Affiliate of such Person becomes the Beneficial
Owner of any additional Common Shares, then such Person shall
be deemed an Acquiring Person, or (Y) if (i) within 8 days
after such Person would otherwise have become an Acquiring
Person, such Person notifies the Board of Directors that such
person did so inadvertently and (ii) within 2 days after such
notification, such Person is the Beneficial Owner of less
than 15% of the outstanding Common Shares.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2)
is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities)
relating to the acquisition, holding, voting (except to the
extent permitted by subparagraph (ii)(B) of this paragraph
(c)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or Federal holiday.
(e) "Close of Business" on any given date shall
mean 5:00 P.M., Boston time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Boston time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to
the Company shall mean shares of Common Stock, par value
$1.00 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest
voting power of such Person or, if such Person is a
Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Disinterested Directors" shall mean the
members of the Board of Directors who are not officers of the
Company and who are not Acquiring Persons or their
Affiliates, Associates or representatives of any of them, or
any Person who was directly or indirectly proposed or
nominated as a director of the Company by a Transaction
Person.
(h) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(i) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(j) "Interested Stockholder" shall mean any
Acquiring Person or any Affiliate or Associate of an
Acquiring Person or any other Person in which any such
Acquiring Person, Affiliate or Associate has an interest, or
any other Person acting directly or indirectly on behalf of
or in concert with any such Acquiring Person, Affiliate or
Associate.
(k) "Permitted Offer" shall mean a tender or
exchange offer which is for all outstanding Common Shares at
a price and on terms determined, prior to the purchase of
shares under such tender or exchange offer, by at least a
majority of the Disinterested Directors to be adequate
(taking into account all factors that such Disinterested
Directors deem relevant including, without limitation, prices
that could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize
maximum value) and 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) taking into account all factors that such
Disinterested Directors may deem relevant.
(l) "Person" shall mean any individual, firm,
partnership, corporation, trust, association, joint venture
or other entity, and shall include any successor (by merger
or otherwise) of such entity.
(m) "Preferred Shares" shall mean shares of Series
A Junior Participating Preferred Stock, without par value, of
the Company having the relative rights, preferences and
limitations set forth in the Form of Certificate of Amendment
attached to this Agreement as Exhibit A.
(n) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(o) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event
described in clause (i), (ii) or (iii) of Section 13(a)
hereof.
(q) "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition shall include, without limitation, a report filed
pursuant to the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(r) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interests is
owned, directly or indirectly, by such Person.
(s) "Transaction" shall mean any merger,
consolidation or sale of assets described in Section 13(a)
hereof or any acquisition of Common Shares of the Company
which would result in a Person becoming a Transaction Person.
(t) "Transaction Person" with respect to a
Transaction shall mean (x) any Person who (i) is or will
become an Acquiring Person if the Transaction were to be
consummated, and (ii) directly or indirectly proposed or
nominated a director of the Company which director is in
office at the time of consideration of the Transaction, or
(y) an Affiliate or Associate of such a Person.
(u) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agents shall be as the Company shall
determine.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Shares
Acquisition Date or (ii) the Close of Business on the tenth
day (or such later date as may be determined by action of the
Company's Board of Directors), after the date of the
commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person or
entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) of, or of the
first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of
the Company or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of
any such plan) to commence (which intention to commence
remains in effect for five Business Days after such
announcement), a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring
Person, the earlier of such dates being herein referred to as
the "Distribution Date," (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section
3) by the certificates for Common Shares registered in the
names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of
Common Shares; provided, however, that if a tender offer is
terminated prior to the occurrence of a Distribution Date,
then no Distribution Date shall occur as a result of such
tender offer. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be
sent, by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate substantially in
the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of
and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) As soon as practicable after the Second
Amendment Date, the Company will send a copy of an amended
Summary of Rights to Purchase Preferred Shares, in
substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the Close of
Business on the Second Amendment Date, at the address of such
holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Second
Amendment Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of
the holders thereof (together with a copy of the Summary of
Rights). Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificates for Common Shares
outstanding on the Second Amendment Date, with or without a
copy of the Summary of Rights attached thereto, shall also
constitute a transfer of the Rights associated with the
Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph
(c)) after the Second Amendment Date but prior to the
earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in an
Amended and Restated Rights Agreement between Tandy
Corporation and The First National Bank of Boston,
dated as of June 22, 1990 (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 Tandy Corporation
Under certain circumstances set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. Tandy Corporation
will mail to the holder of this certificate a copy
of the Rights Agreement without charge promptly
following receipt of a written request therefor.
Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as defined in the
Rights Agreement) and certain related persons,
whether currently held by or on behalf of such
Person or by any subsequent holder, may become null
and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of
election to purchase and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the
Rights Certificate shall entitle the holders thereof to
purchase such number of one one-thousandths of a Preferred
Share as shall be set forth therein at the price per one
one-thousandth of a Preferred Share set forth therein (the
"Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided
herein.
(b) Any Right Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
which are null and void pursuant to Section 7(e) of this
Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was
or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented
hereby are null and void.
Provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on
any such Right Certificate.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signatue, and
have affixed thereto the Company's seal or a facsimile
thereof, and shall be attested by the Secretary, or an
Assistant Secretary, of the Company, either manually or by
facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and
effect as though the person who signed such Right
Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at the office of the Rights Agent
designated for such purposes, 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 and certificate number 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 Sections
4(b), 7(e), 11 and 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a
like number of one one- thousandths of a Preferred Share (or,
following a Triggering Event, other securities, as the case
may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or its transferor in
the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be
transferred, split-up, combined or exchanged, with the form
of assignment and certificate appropriately executed, at the
principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect
to the transfer of any such surrendered Right Certificate
until the registered holder shall have 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 shall reasonably
request. Thereupon the Rights Agent shall, subject to the
provisions of Sections 4(b), 7(e), 11 and 14 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 of a sum
sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split-up,
combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date 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 and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price for the
total number of one one-thousandths of a Preferred Share (or
other securities as the case may be) as which such
surrendered Rights are exercised, at or prior to the earlier
of (i) the Close of Business on June 22, 2000 (the "Final
Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption
Date").
(b) The Purchase Price for each one one-thousandth
of a Preferred Share pursuant to the exercise of a Right
shall initially be $140, shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
Anything in this Agreement to the contrary notwithstanding,
in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common
Shares, then in any such case, the number of Rights shall be
similarly adjusted such that each Common Share outstanding
thereafter shall carry with it one Right, and the Purchase
Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the
Purchase Price immediately prior to such event by a fraction
the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number
of Common Shares outstanding immediately following the
occurrence of such event. The adjustment provided for in the
preceding sentence shall be made successively whenever such a
dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares (or
other securities, as the case may be) and an amount equal to
any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 6 and
Section 9 hereof by certified check, cashier's check or money
order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares certificates for the
number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company, in its sole
discretion, shall have elected to deposit the Preferred
Shares issuable upon exercise of the Rights hereunder into a
depositary, requisition from the depositary agent depositary
receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional interests in
shares in accordance with Section 14 hereof, (iii) promptly
after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and
(iv) when appropriate, after receipt thereof, promptly
deliver such cash to or upon the order of the registered
holder of such Right Certificate.
In the event that the Company is obligated to issue
other securities (including Common Shares) of the Company
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities are
available for distribution by the Rights Agent, if and when
appropriate.
In addition, in the case of an exercise of the Rights by
a holder pursuant to Section 11(a)(ii), the Rights Agent
shall return such Right Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating
thereon that the Rights represented by such Right Certificate
no longer include the rights provided by Section 11(a)(ii) of
the Rights Agreement and if less than all the Rights
represented by such Right Certificate were so exercised, the
Rights Agent shall indicate on the Right Certificate the
number of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof, or an appropriate notation
shall be put on the Right Certificate with respect to those
Rights exercised.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned by (i)
an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a
transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) 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 interest in such Acquiring Person or to
any Person with whom the Acquiring Person has a continuing
agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result
of its 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) 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 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 canceled form, or if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Preferred
Shares. The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued Preferred Shares, or any authorized and issued
Preferred Shares held in its treasury, the number of
Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the
occurrence of a Section 11(a)(ii) Event, shall to the extent
reasonably practicable so reserve and keep available a
sufficient number of Common Shares (and/or other securities)
which may be required to permit the exercise in full of the
Rights pursuant to this Agreement.
So long as the Preferred Shares (and, after the
occurrence of a Section 11(a)(ii) event, Common Shares or any
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, all shares reserved for such
issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred
Shares (or Common Shares and/or other securities, as the case
may be) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares or other
securities (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and
nonassessable shares or securities.
The Company further covenants and agrees that it will
pay when due and payable any and all U.S. federal and state
transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preferred Shares (or Common Shares and/or other securities,
as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preferred Shares (or Common Shares 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 to issue or deliver any
certificates or depositary receipts for Preferred Shares (or
Common Shares and/or other securities as the case may be)
upon the exercise of any Rights, until any such tax shall
have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no
such tax is due.
The Company shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date, a
registration statement under the Securities Act of 1933 (the
"Act"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the
rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii). The
Company will also take such action as may be appropriate
under the blue sky laws of the various states.
Section 10. Record Date. Each person in whose name any
certificate for Preferred Shares (or Common Shares 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 the Preferred Shares (or
Common Shares 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 transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares (or Common Shares and/or
other securities, as the case maybe) transfer books of the
Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company
are open.
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (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
capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number 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 Preferred Shares transfer books of the Company were open,
such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event any Person, alone or
together with its Affiliates and Associates, shall become an
Acquiring Person, then proper provision shall be made so that
each holder of a Right (except as provided below and in
Section 7(e) hereof) shall, for a period of 60 days after the
later of the occurrence of any such event or the effective
date of an appropriate registration statement under the Act
pursuant to Section 9 hereof, have a right to receive, upon
exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this
Agreement, such number of Common Shares (or, in the
discretion of the Board of Directors, one one-thousandths of
a Preferred Share) as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of one one-thousandths of a Preferred Share for which
a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and dividing that
product by (y) 50% of the then current per share market price
of the Company's Common Shares (determined pursuant to
Section 11(d) hereof) on the date of such first occurrence
(such number of shares being referred to as the "Adjustment
Shares"); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii);
(iii) In the event that there shall not be
sufficient treasury shares or authorized but unissued (and
unreserved) Common Shares to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii)
and the Rights become so exercisable (and the Board has
determined to make the Rights exercisable into fractions of a
Preferred Share), notwithstanding any other provision of this
Agreement, to the extent necessary and permitted by
applicable law, each Right shall thereafter represent the
right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, (x) a number of (or fractions of) Common Shares
(up to the maximum number of Common Shares which may
permissibly be issued) and (y) a number of (or fractions of)
one one-thousandths of a Preferred Share or a number of, or
fractions of other equity securities of the Company (or, in
the discretion of the Board of Directors, debt) which the
Board of Directors of the Company has determined to have the
same aggregate current market value (determined pursuant to
Section 11(d)(i) and (ii) hereof, to the extent applicable),
as one Common Share (such number of, or fractions of,
Preferred Shares, debt, or other equity securities or debt of
the Company being referred to as a "capital stock
equivalent"), equal in the aggregate to the number of
Adjustment Shares; provided, however, if sufficient Common
Shares and/or capital stock equivalents are unavailable, then
the Company shall, to the extent permitted by applicable law,
take all such action as may be necessary to authorize
additional Common Shares or capital stock equivalents for
issuance upon exercise of the Rights, including the calling
of a meeting of stockholders; and provided, further, that if
the Company is unable to cause sufficient Common Shares
and/or capital stock equivalents to be available for issuance
upon exercise in full of the Rights, within thirty (30) days
following the date of occurrence of the first to occur of the
events listed in the foregoing clause (ii) of this Section
11(a) (such date being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company (A) shall
determine the excess of (1) the value of the Common Shares
issuable upon the exercise of a Right pursuant to the
foregoing clause (ii) of this Section 11(a) (the "Current
Value") over (2) the then current Purchase Price (such excess
being referred to herein as the "Spread") and (B) shall be
obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. Notwithstanding the immediately
preceding sentence, if the Board of Directors of the Company
shall determine in good faith that it is likely that
sufficient additional Common Shares 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 to 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, being
referred to herein as 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
the foregoing clause (ii) of this Section 11(a), that such
action shall apply uniformly to all outstanding Rights
(except that, to the extent reasonably necessary to avoid the
issuance of fractional Common Shares, such action may provide
for the issuance of Common Shares upon the exercise of more
than a specified number of Rights, and issuance of other
equity or debt securities upon the exercise of such specified
number (or any lesser number) of 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
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.
(b) In case the Company shall fix a record date
for the issuance of rights (other than the Rights), options
or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences
as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent
preferred shares) less than the current per share market
price of the Preferred Shares (as defined in Section 11(d))
on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase
(or into which the convertible securities so to be offered
are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on
the Rights Agent. Preferred Shares 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 the
Preferred Shares (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
quarterly cash dividend or a dividend payable in Preferred
Shares) 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, the numerator of which shall
be the then current per share market price (as determined
pursuant to Section 11(d)) of the Preferred Shares 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 and shall be binding on 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 Preferred Share and the denominator of
which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price that would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the
thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per
share market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (1) a dividend or distribution on such Security
payable in shares of such Security or securities convertible
into such Security, or (2) any subdivision, combination or
reclassification of such Security, and prior to the
expiration of thirty (30) Trading Days after the ex-dividend
date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price
shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on
any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market
in the Security selected by the Board of Directors of the
Company. If on any such date no such market maker is making
a market in the Security, the fair value of the Security on
such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading
Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the
Preferred Shares shall be determined in the same manner as
set forth in clause (i) of this Section 11(d). If the
Preferred Shares are not publicly traded, the "current per
share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price
of the Common Shares as determined pursuant to Section
11(d)(i) (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the
date hereof), multiplied by one thousand. If neither the
Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent.
(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 the Purchase Price; provided,
however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one-millionth of a Preferred Share 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 (3)
years from the date of the transaction that requires such
adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of
any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares 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 Preferred Shares
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) The Company may elect on or after the date of
any adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c) to adjust the
number of Rights, in lieu of any adjustment in the number of
Preferred Shares purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the
number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any date thereafter,
but, if the Right Certificates have been issued, shall be at
least ten (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(h), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(i) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-thousandths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-thousandths of Preferred Shares which were expressed in
the initial Right Certificates issued hereunder.
(j) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of one one-thousandths of Preferred Shares,
Common Shares or other securities 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 such number of
fully paid and nonassessable one one-thousandths of Preferred
Shares, Common Shares or other securities at such adjusted
Purchase Price.
(k) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event
the issuance to the holder of any Right exercised after such
record date the Preferred Shares, Common Shares, or other
securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares, Common Shares,
or other 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.
(l) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that (i) any consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for
cash of Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to suchshareholders.
(m) 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 does not violate Section 11(n)
hereof), (ii) merge with or into any other Person (other than
a Subsidiary of the Company in a transaction which does not
violate Section 11(n) hereof), or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions
each of which does not violate Section 11(n) hereof), if (x)
at the time of or immediately after such consolidation,
merger, sale or transfer there are any charter or by-law
provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect or other
actions taken, which would materially 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. The Company
may not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other
Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this
Section 11(m).
(n) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or
if at the time such action is taken it is reasonably
foreseeable that the effect of such action is to, materially
diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The exercise of rights under Section 11(a)(ii)
shall only result in the loss of rights under Section11(a)(ii)
to the extent so exercised and shall not otherwise
affect the rights represented by the Rights under this Rights
Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided
in Sections 11 and 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent
for the Common Shares and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. (a) In the event that, on or
following the Shares Acquisition Date, directly or
indirectly, (i) the Company shall consolidate with, or merge
with and into, any Interested Stockholder or, if in such
merger or consolidation all holders of Common Stock are not
treated alike, any other Person, (ii) the Company shall
consolidate with, or merge with, any Interested Stockholder
or, if in such merger or consolidation all holders of Common
Stock are not treated alike, any other Person, and the
Company shall be the continuing or surviving corporation of
such consolidation or merger (other than, in a case of any
transaction described in (i) or (ii), a merger or
consolidation which would result in all of the securities
generally entitled to vote in the election of directors
("voting securities") of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the
surviving entity) all of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities
not having changed as a result of such merger or
consolidation), or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Interested Stockholder
or Stockholders or, if in such transaction all holders of
Common Stock are not treated alike, any other Person (other
than the Company or any Subsidiary of the Company in one or
more transactions each of which does not violate Section
11(n) hereof), then, and in each such case, proper provision
shall be made so that (A) each holder of a Right (except as
provided in Section 7(e) hereof), shall thereafter have the
right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such
number of freely tradeable Common Shares of the Principal
Party (as hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal, or other adverse
claims, as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing
that product by (y) 50% of the current per share market price
of the Common Shares of such Principal Party (determined
pursuant to Section 11(d) hereof) on the date of consummation
of such Section 13 Event; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company"
shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; and (D) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its
Common Shares) in connection with the consummation of any
such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (i) or (ii) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
Common Shares of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation
(including, if applicable, the Company if it is the surviving
corporation ); and
(ii) in the case of any transaction described
in clause (iii) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any of the foregoing cases, (1) if
the Common Shares of such Person are not at such time and
have not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another
Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two
or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market
value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply
to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or
all of such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of its authorized Common
Shares which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the
Right 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, sale or transfer mentioned in
paragraph (a) of this Section 13, the Principal Party at its
own expense shall:
(i) prepare and file a registration statement
under the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or
register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party which
comply in all respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. The rights under this Section 13 shall be in
addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any exercise
thereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York
Stock Exchange, or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then is 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 Preferred Shares (other than fractions that are
one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the
Rights or to issue certificates which evidence fractional
Preferred Shares (other than fractions that are one
one-thousandth or integral multiples of one one-thousandth of
a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share
may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided
that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as Beneficial Owners
of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are
not one one-thousandth or integral multiples of one
one-thousandth of a Preferred share, the Company shall 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
Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of one of the
transactions or events specified in Section 11 giving rise to
the right to receive Common Shares, capital stock equivalents
(other than Preferred Shares) or other securities upon the
exercise of a Right, the Company shall not be required to
issue fractions of shares or units of such Common Shares,
capital stock equivalents or other securities upon exercise
of the Rights or to distribute certificates which evidence
fractions of such Common Shares, capital stock equivalents or
other securities. In lieu of fractional shares or units of
such Common Shares, capital stock equivalents or other
securities, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction
of the current market value of a share or unit of such Common
Shares, capital stock equivalents or other securities. For
purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(d)
hereof for the Trading Day immediately prior to the date of
such exercise, and if such capital stock equivalent is not
traded, each such capital stock equivalent shall have the
value of one one-thousandth of a Preferred Share.
(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 provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the
Common Shares), may in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of the Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder
of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder
of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer
and with the appropriate form fully executed;
(c) Subject to Section 6 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 Shares certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be affected by any
notice to the contrary; and
(d) Notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or a beneficial
interest in a Right or other Person as a result of its
inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the
Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to
receive dividends or other distributions or to exercise any
preemptive or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company
agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises. The indemnity provided for herein shall survive
the expiratation of the Rights and the termination of this
Agreement.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of, any action taken, suffered
or omitted by it in connection with, its administration of
this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent. Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it
may be consolidated, or any corporation resulting from any
merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or all or substantially all
of the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of
the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name:
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only those duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter (including, without
limitation, the identity of an Acquiring Person and the
determination of the current market price of any Security) be
proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the
Chairman of the Board, 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 to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any 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 change in the exercisability
of the Rights (including the Rights becoming void pursuant to
Section 7(e) hereof) or any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible
for the manner, method or amount of any such adjustment, or
the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after receipt of a
certificate described in Section 12 hereof); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any one of the
Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in
actions while waiting for those instructions. Any
application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the
Rights Agent with respect to its duties or obligations under
this Rights Agreement and the date on or after which such
action shall be taken or omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date
specified therein (which date shall not be less than five
Business Days after the date any such officer of the Company
actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless,
prior to taking such action (or the effective date in the
case of an omission), the Rights Agent has received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) 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 not been
completed, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of
the Common Shares and Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates
by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Shares 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 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 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 corporation organized and doing business under the
laws of the United States (or of any state of the United
States), in good standing, that is authorized under such laws
to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by federal or state
authority and that has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100
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 Common Shares and Preferred Shares, 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
Common Shares following the Distribution Date and prior to
the earlier of the Redemption Date and the Final Expiration
Date, the Company (a) shall with respect to Common Shares 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, notes or debentures
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) the Company shall not be
obligated to issue any such Right Certificates 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 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) (i) The Board of Directors of the Company
may, at its option, redeem all but not less than all the then
outstanding Rights at a redemption price of $.05 per Right,
as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), at any
time prior to the earlier of (x) the occurrence of a Section
11(a)(ii) Event, or (y) the Final Expiration Date.
(ii) In addition, the Board of Directors of
the Company may, at its option, at any time following the
occurrence of a Section 11(a)(ii) Event and the expiration of
any period during which the holder of Rights may exercise the
Rights under Section 11(a)(ii) but prior to any Section 13
Event, redeem all but not less than all of the then
outstanding Rights at the Redemption Price (aa) in connection
with any merger, consolidation, or sale or other transfer (in
one transaction or in a series of related transactions) of
assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken
as a whole), in which all holders of Common Shares are
treated alike and not involving (other than as a holder of
Common Shares being treated like all other such holders) an
Interested Stockholder or (bb) if and for so long as the
Acquiring Person is not thereafter the Beneficial Owner of
15% of the Common Shares, and at the time of redemption there
are no other persons who are Acquiring Persons.
(b) Notwithstanding the provisions of Section
23(a), in the event that a majority of the Board of Directors
of the Company is comprised of (i) persons elected at a
meeting of or by written consent of stockholders and who were
not nominated by the Board of Directors in office immediately
prior to such meeting or action by written consent and/or
(ii) successors of such persons elected to the Board of
Directors for the purpose of either facilitating a
Transaction with a Transaction Person or circumventing
directly or indirectly the provisions of this Section 23(b),
then (I) the Rights may not be redeemed for a period of 180
days following the effectiveness of such election if such
redemption is reasonably likely to have the purpose or effect
of facilitating a Transaction with a Transaction Person and
(II) the Rights may not be redeemed thereafter if (x) during
such 180-day period, the Company enters into any agreement,
arrangement or understanding with any Transaction Person
which is reasonably likely to have the purpose or effect of
facilitating a Transaction with any Transaction Person and
(y) such redemption is reasonably likely to have the purpose
or effect of facilitating a Transaction with any Transaction
Person.
(c) In the case of a redemption permitted under
Section 23(a)(i), immediately upon the date for redemption
set forth (or determined in the manner specified in) in a
resolution of the Board of Directors of the Company ordering
the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further
action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price
for each Right so held. In the case of a redemption
permitted only under Section 23(a)(ii), evidence of which
shall have been filed with the Rights Agent, the right to
exercise the Rights will terminate and represent only the
right to receive the Redemption Price upon the later of ten
Business Days following the giving of such notice or the
expiration of any period during which the rights under
Section 11(a)(ii) may be exercised. The Company shall
promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption.
Within ten (10) days after such date for redemption set forth
in a resolution of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights
at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. 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 except in connection with the
purchase of Common Shares prior to the Distribution Date.
(d) The Company may, at its option, discharge all
of its obligations with respect to the Rights by (i) issuing
a press release announcing the manner of redemption of the
Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of
the Rights at their last addresses as they appear on the
registry books of the Rights Agent or, prior the Distribution
Date, on the registry books of the Transfer Agent of the
Common Shares, and upon such action, all outstanding Rights
and Right Certificates shall be null and void without any
further action by the Company.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay
any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with any Person (other than a
Subsidiary of the Company in a transaction which does not
violate 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 50% or more 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 does not violate Section 11(n) hereof), or (v) to
effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of such proposed action to the
extent feasible and file a certificate with the Rights Agent
to that effect, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Preferred Shares,
if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii)
above at least twenty (20) days prior to the record date for
determining holders of the Preferred Shares 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 Preferred Shares, whichever shall be the
earlier.
(b) In case of a Section 11(a)(ii) Event, then (i)
the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with
Section 25 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences
of such event to holders of rights under Section 11(a)(ii)
hereof and (ii) all references in the preceding paragraph (a)
to Preferred Shares shall be deemed thereafter to refer also
to Common Shares and/or, if appropriate, other securities of
the Company.
Section 25. 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 Company) as follows:
Tandy Corporation
1800 One Tandy Center
Fort Worth, TX 76102
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or
on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as
follows:
The First National Bank of Boston
50 Morrissey Boulevard
Dorchester, MA 02125
Attention: Shareholder Services Division
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 or, if prior to the Distribution Date,
to the holder of certificates representing Common Shares
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 26. Supplements and Amendments. The Company
and the Rights Agent may from time to time supplement or
amend any provision of 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 make any other
provisions in regard to matters or questions arising
hereunder which the Company and the Rights Agent may deem
necessary or desirable, including but not limited to
extending the Final Expiration Date and providing that at the
time of such amendment there is no Acquiring Person, the
period up to which the Rights may be redeemed, and which
shall not adversely affect the interests of the holders of
the Right Certificates. 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 26, the Rights Agent shall execute
such supplement or amendment, provided that such supplement
or amendment does not adversely affect the rights or
obligations of the Rights Agent under Section 18 or Section
20 of this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Shares.
Notwithstanding anything contained in this Rights Agreement
to the contrary, in the event that a majority of the Board of
Directors of the Company is comprised of (i) persons elected
at a meeting of or by written consent of stockholders and who
were not nominated by the Board of Directors in office
immediately prior to such meeting or action by written
consent and/or (ii) successors of such persons elected to the
Board of Directors for the purpose of either facilitating a
Transaction with a Transaction Person or circumventing
directly or indirectly the provisions of this Section 26,
then for a period of 180 days following the effectiveness of
such action, this Rights Agreement shall not be amended or
supplemented in any manner reasonably likely to have the
purpose or effect of facilitating a Transaction with a
Transaction Person.
Section 27. Determination and Actions by the Board of
Directors, etc. 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, 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, without
limitation, a determination to redeem or not redeem the
Rights or to amend the Agreement and whether any proposed
amendment adversely affects the interests of the holders of
Right Certificates). For all purposes of this Agreement, any
calculation of the number of Common Shares or other
securities outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (y) not subject the
Board to any liability to the holders of the Right
Certificates.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date,
the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 31. Governing Law. This Agreement, each Right
and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to
contracts to be made and performed entirely within such
State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day
and year first above written.
TANDY CORPORATION
Attest:
By /s/ HC Winn By /s/ John V. Roach
Name: Herschel C. Winn Name: John V. Roach
Chairman of the Board,
Senior Vice President Chief Executive Officer
Title: and Secretary Title: and President
THE FIRST NATIONAL BANK OF BOSTON
as Rights Agent
Attest:
By /s/ Craig A. Alie By /s/ Darlene M. DioDato
Name: Craig A. Alie Name: Darlene M.n DioDato
Title: Account Manager Title: Vice President