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Exhibit 4.2
REMEDYTEMP, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT
--------------
SHAREHOLDER RIGHTS AGREEMENT
DATED AS OF , 1996
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TABLE OF CONTENTS
1. Certain Definitions..................................................... 1
2. Appointment of Rights Agent............................................. 5
3. Issue of Rights Certificates............................................ 5
4. Form of Rights Certificates............................................. 7
5. Countersignature and Registration....................................... 7
6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates. ......... 8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights. ......... 9
8. Cancellation and Destruction of Rights Certificates..................... 10
9. Reservation and Availability of Capital Stock........................... 10
10. Preferred Stock Record Date............................................. 12
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights............................................................. 12
12. Certificate of Adjusted Purchase Price or Number of Shares ............. 19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. .. 19
14. Fractional Rights and Fractional Shares................................. 22
15. Rights of Actions....................................................... 23
16. Agreement of Rights Holders............................................. 24
17. Rights Certificate Holder Not Deemed a Shareholder...................... 24
18. Concerning the Rights Agent............................................. 24
19. Merger or Consolidation or Change of Name of Rights Agent. ............. 25
20. Duties of Rights Agent.................................................. 25
21. Change of Rights Agents................................................. 27
22. Issuance of New Rights Certificates..................................... 28
23. Redemption and Termination.............................................. 28
24. Exchange................................................................ 29
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25. Notice of Certain Events................................................ 31
26. Notices................................................................. 32
27. Supplements and Amendments.............................................. 32
28. Successors.............................................................. 33
29. Determination and Actions by the Board of Directors, etc. .............. 33
30. Benefits of this Agreement.............................................. 33
31. Severability............................................................ 33
32. Governing Law........................................................... 34
33. Counterparts............................................................ 34
34. Descriptive Headings; References........................................ 34
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SHAREHOLDER RIGHTS AGREEMENT
SHAREHOLDER RIGHTS AGREEMENT, dated as of , 1996
(the "AGREEMENT"), between RemedyTemp, Inc., a California corporation (the
"COMPANY") and American Stock Transfer & Trust Company, a New York corporation
(the "RIGHTS AGENT").
WHEREAS, on April 29, 1996 (the "RIGHTS DIVIDEND DECLARATION
DATE"), the Board of Directors of the Company authorized and declared a dividend
distribution, contingent upon and immediately prior to the consummation of the
initial public offering by the Company of its equity securities (the "EFFECTIVE
TIME") of one Right for each Common Share (as hereinafter defined) of the
Company outstanding at the close of business on the Effective Time (the "RECORD
DATE"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock (as hereinafter defined) of the Company issued from
the Record Date (whether originally issued or delivered from the Company's
treasury) until the earliest of the Distribution Date or a Section 13 Event or
the Expiration Date (each as hereinafter defined), each Right initially
representing the right to purchase one one-thousandth of a share of Series A
Junior Participating Preferred Stock of the Company having the rights,
preferences, privileges and restrictions set forth in the Company's Amended and
Restated Articles of Incorporation as effective as of the Record Date, upon the
terms and subject to the conditions hereinafter set forth (the "RIGHTS");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
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 the Board of Directors of the Company, shall become, after the date
hereof, the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) an Exempt Person, (ii) a Person who or
which, together with its Affiliates and Associates, shall become the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding solely as a
result of a reduction in the number of shares of Common Stock outstanding due to
a repurchase of Common Stock by the Company, unless such Person shall thereafter
purchase or otherwise become the Beneficial Owner of additional shares of Common
Stock. Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as practicable
a sufficient number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to
be an "Acquiring Person" for any purposes of this Agreement. Furthermore,
notwithstanding the foregoing, no shareholder of the Company beneficially owning
(together with such shareholder's Affiliates and Associates) 15% or more of the
shares of Common Stock as of the Record Date and after giving effect to the
Company's initial public offering (an "ORIGINAL 15% SHAREHOLDER") and no
Affiliate or Associate of any such shareholder shall be an Acquiring Person
unless and until such Original 15% Shareholder (together with such shareholder's
Associates and Affiliates) shall become the
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Beneficial Owner of the Threshold Percentage (as applicable to such shareholder)
of the shares of Common Stock then outstanding, at which point such shareholder
shall be an Acquiring Person. Furthermore, notwithstanding the foregoing, no
Person who becomes the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding as a result of a bequest by Robert E. McDonough, Sr., or
the automatic conversion of shares of Class B Common Stock owned by such Person
into Common Stock on the tenth anniversary of the Company's initial public
offering or upon the death or legal incapacity of Robert E. McDonough, Sr. (an
"EXCLUDED SHAREHOLDER"), and no Affiliate or Associate of any such Excluded
Shareholder, shall be an Acquiring Person unless and until such Excluded
Shareholder (together with such shareholder's Associates and Affiliates) shall
become the Beneficial Owner of the Threshold Percentage (as applicable to such
shareholder) of the shares of Common Stock then outstanding. For purposes
hereof, (i) the "THRESHOLD PERCENTAGE" for an Original 15% Shareholder equals
the sum of 15 and the percentage of the shares of Common Stock as of the Record
Date after giving effect to the Company's initial public offering beneficially
owned by such shareholder and such shareholder's Affiliates and Associates; and
the "Threshold Percentage" for an Excluded Shareholder equals the sum of 15 and
the percentage of the shares of Common Stock beneficially owned by such Excluded
Shareholder and such shareholder's Affiliates and Associates immediately after
the event causing such shareholder to become an Excluded Shareholder. Thus, for
example, an Original 15% Shareholder owning (together with such shareholder's
Affiliates and Associates) 20% of the Common Stock as of the Record Date after
giving effect to the Company's initial public offering, or an Excluded
Shareholder owning (together with such shareholder's Affiliates and Associates)
20% of the Common Stock immediately after the event causing such shareholder to
become an Excluded Shareholder, would become an Acquiring Person when and if
that shareholder (together with such shareholder's Affiliates and Associates)
became the Beneficial Owner of 35% or more of the shares of Common Stock then
outstanding.
(b) "ACT" shall mean the Securities Act of 1933.
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in effect
on the date of this Agreement (the "EXCHANGE ACT").
(d) A Person shall be deemed the "BENEFICIAL OWNER" of, and
shall be deemed to "BENEFICIALLY OWN," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 (the "ORIGINAL RIGHTS") or pursuant to Section 11(i) in
connection with an adjustment made with respect to any Original Rights;
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(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if such agreement
arrangement or understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (d)) or
disposing of any voting securities of the Company; provided, however, that
nothing in this paragraph (d) shall cause a person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such person's participation in good faith
in a firm commitment underwriting until the expiration of forty days after the
date of such acquisition.
(e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
(f) "CLASS B COMMON STOCK" means the Class B Common Stock of
the Company, par value $.01 per share. "Class B Common Stock" excludes Common
Stock.
(g) "CLOSE OF BUSINESS" on any given date shall mean 5:00
P.M., California time on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., California time on the next succeeding
Business Day.
(h) "COMMON SHARES" means the Common Stock and the Class B
Common Stock.
(i) "COMMON STOCK" shall mean the Class A Common Stock, $0.01
par value, of the Company, except that "Common Stock" when used with reference
to any Person other than the Company shall mean the capital stock (or units of
beneficial interest which represent the right to participate in profits, losses,
deductions and credits) of such Person with the greatest voting power, or the
equity securities or other equity interest having power to control or direct the
management, of such Person. "Common Stock" excludes Class B Common Stock.
(j) "COMMON STOCK EQUIVALENTS" shall have the meaning set
forth in Section 11(a)(iii).
(k) "CONTINUING DIRECTOR" shall mean (i) any member of the
Board of Directors of the Company who is not, while a member of the Board, an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring
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Person or of any such Affiliate or Associate, and who was a member of the Board
prior to the Effective Date, or (ii) any Person who subsequently becomes a
member of the Board who is not , while a member of the Board, an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of the Continuing Directors.
(l) "CURRENT MARKET PRICE" shall have the meaning set forth in
Section 11(d)(i).
(m) "CURRENT VALUE" shall have the meaning set forth in
Section 11(a)(iii).
(n) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a).
(o) "EQUIVALENT PREFERRED STOCK" shall have the meaning set
forth in Section 11(b).
(p) "EXCHANGE ACT" shall have the meaning set forth in Section
1(c).
(q) "EXEMPT PERSON" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan or employee stock plan of the Company or
any Subsidiary of the Company, or any person or entity organized, appointed, or
established by the Company or any Subsidiary of the Company, for or pursuant to
the terms of any such plan.
(r) "EXPIRATION DATE" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in
Section 23, (iii) the time at which the Board of Directors orders the exchange
of Rights as provided in Section 24, or (iv) the consummation of a transaction
contemplated by Section 13(d).
(s) "FINAL EXPIRATION DATE" shall mean the close of business
on the tenth anniversary of the Record Date.
(t) "PERSON" shall mean any individual, firm, corporation,
partnership or other entity.
(u) "PREFERRED STOCK" shall mean shares of Series A Junior
Participating Preferred Stock, $.01 par value, of the Company and, to the extent
that there is not a sufficient number of shares of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the Rights, any other
series of Preferred Stock, $.01 par value, of the Company designated for such
purpose containing terms substantially similar to the terms of the Series A
Junior Participating Preferred Stock.
(v) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b).
(w) "PURCHASE PRICE" shall have the meaning set forth in
Section 4(a).
(x) "RECORD DATE" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
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(y) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a).
(z) "RIGHTS" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(aa) "RIGHTS CERTIFICATES" shall have the meaning set forth in
Section 3(a).
(bb) "RIGHTS DIVIDEND DECLARATION DATE" shall-have the meaning
set forth in the WHEREAS clause at the beginning of this Agreement.
(cc) "SECTION 11(A)(II) EVENT" shall mean any event described
in Section 11(a)(ii).
(dd) "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning
set forth in Section 11(a)(iii).
(ee) "SECTION 13 EVENT" shall mean any event described in
clause (x), (y) or (z) of Section 13(a).
(ff) "SPECIAL VOTE:" An action of the Company's Board of
Directors by "Special Vote" means an action that is taken (and can only be
taken) at a time when there are two or more Continuing Directors, and that is
approved by both (i) a majority of the Continuing Directors, and (ii) a majority
of the entire Board of Directors, including the Continuing Directors.
(gg) "SPREAD" shall have the meaning set forth in Section
11(a)(iii).
(hh) "STOCK 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 Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such or such earlier date as a majority of the directors shall become aware of
the existence of an Acquiring Person; provided that, if such person is
thereafter determined not to have become an Acquiring Person within the meaning
of Section 1(a), then no Stock Acquisition Date shall be deemed to have
occurred.
(ii) "SUBSIDIARY" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect at least a majority of the
directors of such corporation (or other persons performing similar functions) is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(jj) "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii).
(kk) "TRADING DAY" shall have the meaning set forth in Section
11(d)(i).
(ll) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
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Any determination required by the definitions contained in
this Section 1 shall be made by the Board of Directors of the Company in its
good faith judgment, which determination shall be binding on the Rights Agent
and the holders of the Rights.
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, shall prior to the Distribution Date also be the holders of the Common Stock)
in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date), or (ii) the close of business on the tenth day after the date that
a tender or exchange offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof, such
Person, together with its Affiliates and Associates, would be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding, or, if such
Person is an Original 15% Shareholder or an Excluded Shareholder, then such
Person, together with such Person's Affiliates and Associates, would be the
Beneficial Owner of the Threshold Percentage (as applicable to such shareholder)
of the shares of Common Stock then outstanding (irrespective of whether any
shares are actually purchased pursuant to any such offer) (each of the time
periods in (i) and (ii) being subject to extension as provided in Section 27 and
the earliest of (i) and (ii) being herein referred to as the "DISTRIBUTION
DATE"), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Shares registered in
the names of the holders of the Common Shares (which certificates for Common
Shares shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) each Right will be transferable only in connection with
the transfer of the underlying Common Share (including a transfer to the
Company), and until the earlier of the Distribution Date or the Expiration Date,
the transfer of any certificates representing Common Shares in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such Common Shares. As soon as practicable after the
Distribution Date, the Rights Agent will send to the record holder of each
Common Share as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A hereto (the "RIGHTS
CERTIFICATES"), evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(p), at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)) so that
Rights Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) Rights shall be issued in respect of all Common Shares
which are issued after the Record Date but prior to the earliest of the Stock
Acquisition Date or a
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Section 13 Event or the Expiration Date. Certificates representing such Common
Shares (including, without limitation, certificates issued upon transfer or
exchange of Common Stock) shall also be deemed to be certificates for Rights,
and shall bear the following legend:
"This certificate also represents Rights that entitle
the holder hereof to certain rights as set forth in a Shareholder
Rights Agreement between the Corporation and American Stock Transfer &
Trust Company, as Rights Agent, dated as of __________ ____, 1996 (the
"Rights Agreement"), the terms, conditions and limitations of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal offices of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Corporation will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or beneficially owned by, any Person who
is, was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void."
4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of an election to
purchase and of assignment and of certificates to be printed on the reverse
thereof) when, as and if issued, shall each be substantially in the form set
forth in Exhibit A 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 Section 11 and Section 22, the
Rights Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set forth therein
at the price set forth therein (such exercise price per one one-thousandth of a
share, 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) Notwithstanding any other provision of this Agreement, any
Rights Certificate issued pursuant to Section 3(a) or Section 22 that represents
Rights beneficially owned by any Person known to be: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
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 avoidance of Section 7(e), and any Rights
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Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend, modified
as applicable to apply to such Person:
"The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby may become null
and void in the circumstances specified in Section 7(e) of such
Agreement."
5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any other officer of the
Company designated by the Chairman or President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates
shall be manually 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 Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the certificate number and the date of each of the Rights
Certificates.
6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
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exchanged at the office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Sections 7(e), 23(b) and 24(b), the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a)), in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of one one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each one one-thousandth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be
$65.00, and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) and shall be payable in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-thousandth of a share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k), thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one- thousandths of a share of
Preferred Stock to be purchased and the Company hereby authorizes its transfer
agent to comply with all such requests, or (B) if
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the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depository
agent, requisition from the depository agent depository receipts representing
such number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depository agent) and the Company will direct the depository agent to comply
with such request, (ii) requisition from the Company an amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14, (iii)
after receipt of such certificates or depository receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii)) may be made by bank draft, certified bank check or money order
payable to the order of the Company. In the event that the Company is obligated
to issue other securities (including Common Stock) of the Company, pay cash
and/or distribute other property pursuant to Section 11(a), the Company will
make all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate of Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) by or for the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer 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) are complied with, but shall have no liability
to any holder of Rights Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or any of their
respective 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 Rights
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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.
8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercises, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and, or other securities) that, as provided in this Agreement including
Section 11(a)(iii), will be sufficient to permit the exercise in full of all
outstanding Rights, provided, however, that the Company shall not be required to
reserve and keep available shares of Preferred Stock, Common Stock or other
securities sufficient to permit the exercise in full of all outstanding Rights
pursuant to the adjustments set forth in Section 11(a)(ii), Section 11(a)(iii)
or Section 13 unless, and only to the extent that, the Rights become exercisable
pursuant to such adjustments.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable 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.
(c) If necessary to permit the offer and issuance of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock and/or
other securities) issuable and deliverable upon the exercise of Rights, the
Company shall use its best efforts to (i) file, as soon as practicable following
the earliest date after the occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the Rights has
been determined in accordance with Section 11(a)(iii), or as soon as is required
by law following the Distribution Date, as the case may be, a registration
statement under 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) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities,
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and (B) the date of the expiration of the Rights. The Company will also take
such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. Upon 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. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction, unless the
requisite qualification in such jurisdiction shall have been obtained and until
a registration statement (if required) has been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-thousandths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby and such certificate
shall be dated as of the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be)
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transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights. The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e), the Purchase Price
in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 23(a) and Section 24, in the event any
Person (other than an Exempt Person or an Original 15% Shareholder or an
Excluded Shareholder), alone or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend Declaration Date, become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding,
or any Original 15% Shareholder or Excluded Shareholder alone or together with
such shareholder's Affiliates or Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of the Threshold
Percentage of the shares of Common Stock then outstanding, unless the event
causing the 15% threshold or the Threshold Percentage, as the case may be, to be
crossed is an acquisition of shares of Common Stock pursuant to a tender offer
or an exchange offer for all outstanding shares of Common Stock at a price and
on terms determined by the Board of Directors of the Company acting by Special
Vote and by at least a majority of the Continuing Directors who are not officers
of the Company, after receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to shareholders of the Company (taking
into account all factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the Company and its
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shareholders, then, proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e)) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one
one-thousandths of a share of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately prior to the
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such occurrence, shall thereafter be referred to as the "PURCHASE
PRICE" for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined pursuant to Section 11(d)) per share of Common
Stock on the date of such occurrence (such number of shares is herein called the
"ADJUSTMENT SHARES"); provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such occurrence.
(iii) In the event that the number of shares of Common Stock which
are authorized by the Company's Articles of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a) and the Rights shall become so
exercisable, to the extent permitted by applicable law and any agreements in
effect on the date hereof to which the Company is a party, the Company shall:
(A) determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price (such
excess, the "SPREAD"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as shares of Common
Stock (such shares of preferred stock, "COMMON STOCK EQUIVALENTS")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "SECTION 11(A)(II) TRIGGER DATE"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such
period, as it may be extended, the "SUBSTITUTION PERIOD"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares
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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. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the Current
Market Price (as determined pursuant to Section 11(d)) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such
date. The Board of Directors may, but shall not be required to, establish
procedures to allocate the right to receive Common Stock upon the exercise of
Rights pursuant to this Section 11(a)(iii).
(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
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("EQUIVALENT PREFERRED STOCK")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as determined pursuant to Section 11(d)) per
share of Preferred Stock 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 shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock (and/or
Equivalent Preferred Stock so to be offered and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board 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 and the holders of the Rights. Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other then Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as determined pursuant to
Section 11(d)) per share of
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Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price (as determined pursuant
to Section 11(d)) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record dated is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "CURRENT MARKET PRICE" per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date and for purposes of computations made pursuant to Section 11(a)(iii), the
"Current Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common Stock for
the then ten (10) consecutive Trading Days immediately following such date;
provided, however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange or the NASDAQ National
Market on which the shares of Common Stock are listed or admitted to trading or,
if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange or the NASDAQ National Market the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Common Stock selected by
the Board of Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
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 or the NASDAQ National Market on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, "Current Market Price" per share shall
mean the fair value per share as determined
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in good faith by the board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the Current Market Price per share of
the Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "Current Market Price" per share of the
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the Current Market Price of one
one-thousandth of a share of Preferred Stock shall be equal to the Current
Market Price of one share of Preferred Stock divided by 1,000.
(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 one percent (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 share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), an 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 which mandates such adjustments, or
(ii) the Expiration date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of
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such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one ten-thousandth) obtained by (i) multiplying (x)
the number of one one-thousandths of a share covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
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 to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandths of a
share and the number of one one-thousandths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause adjustment reducing the
Purchase Price below the then stated value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-thousandths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the
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Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of one
one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the Current Market Price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o)), if (x) at the time of or immediately after such consolidation, merger,
sale or transfer there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger, sale or transfer, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23, 24 or 27, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller
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number of shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 25. Notwithstanding the foregoing sentence, the failure
of the Company to give such notice shall not affect the validity of or the force
or effect of or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained. Any adjustment to be made pursuant to Sections 11 and 13 shall be
effective as of the date of the event giving rise to such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o)) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger, and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)),
then, and in each such case, proper provisions shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e), shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the by the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the occurrence of a Section 11(a)(ii) Event
by the
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Purchase Price in effect immediately prior to such Section 11(a)(ii) Event, and
(2) dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "PURCHASE PRICE" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)(i)) per share of the Common Stock of such Principal
Party on the date of consummation of such Section 13 Event (or the fair market
value on such date of other securities or property of the Principal Party, as
provided for herein); provided that the Purchase Price and the number of shares
of Common Stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of the first occurrence of a Section 13 event; (ii)
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; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property; and (v) the provisions of
Section 11(a)(ii) shall be of no effect following the first occurrence of any
Section 13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a): (A) the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer whose issued and outstanding Common Stock has the greatest aggregate
market value or (B) if no securities are so issued, (x) the Person that is the
other party to such merger or consolidation and survives said merger or
consolidation, or, if there is more than one such Person, the Person whose
issued and outstanding Common Stock has the greatest aggregate market value or
(y) if the Person that is the other party to the merger or consolidation does
not survive the merger or consolidation, the Person that does survive the merger
or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of
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the assets or earning power cannot be determined, whichever of such Persons as
is the issuer of Common Stock having the greatest market value of shares
outstanding;
provided, however, that in any such case, (l) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) if such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such persons is the
issuer of the issued and outstanding Common Stock having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
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 will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date and similarly comply with applicable state
securities laws;
(ii) will deliver to holders of the Rights historical financial
statements of the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act;
(iii) use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and, if the Common Stock of the
Principal Party shall not be listed on a national securities exchange, to cause
the Rights and the securities purchasable upon exercise of the Rights to be
reported by NASDAQ or such other system then in use; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event,
the Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
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(d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock which complies with
the provisions of Section 11(a)(ii) hereof (or a wholly owned Subsidiary of any
such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer, and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution date as provided in Section 11(p), or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Current Market
Value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Current Market Value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the Current Market Value of
one one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of
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Preferred Stock (as determined pursuant to Section 11(d)(ii)) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
Current Market Value of one (1) share of Common Stock. For purposes of this
Section 14(c), the Current Market Value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i)) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights 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 Rights 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 Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
16. Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of
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ownership or writing on the Rights Certificates or the associated Common Share
certificate made by anyone other than the Company or the Rights Agents) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e), shall be required to be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or 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.
17. Rights Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purposes the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder as set forth in a
separately executed written fee agreement. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
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19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (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 any Acquiring Person and the
determination of "Current Market Price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder only for its own gross
negligence or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt of the certificate described in Section 12
setting forth any such adjustment); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or reservation of
any shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificates or as to whether any shares of Common Stock
or Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board or the President of the Company or any other officer of
the Company designated to the Rights Agent in writing by the Chairman of the
Board or President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(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 or any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
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(j) No provision of this Agreement shall require the Rights Agents 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 either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty (30) days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent (with or without
cause) upon thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) days after giving notice
of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or any
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
of any other state of the United States in good standing, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus deemed by the Company's Board of Directors to be reasonable under the
circumstances. 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 Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agents as the case may be.
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22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date), subject to extension as provided in Section 27 or
(ii) the close of business on the Final Expiration Date, redeem all but not less
than all the then outstanding Rights at a redemption price of $0.01 per Right,
as such amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "REDEMPTION PRICE"). Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the occurrence of an event described in Section 11(a)(ii)
until such time as the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the "Current Market Price," as defined in Section 11(d)(i), of
the Common Stock at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors. Such redemption of the Rights by
the Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish;
provided, however, that any redemption of Rights occurring as of or after the
time a Person becomes an Acquiring Person may be effected, and the method of
payment of the redemption price and conditions to redemption may be determined,
only by the Company's Board of Directors acting by Special Vote.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held, without any interest thereon. Promptly
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption
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to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. The failure to
give notice required by this Section 23(b) or any defect therein shall not
affect the legality or validity of the action taken by the Company.
24. Exchange.
(a) Subject to applicable laws, rules and regulations, and subject to
subsection (c) below, at any time after the occurrence of a Triggering Event,
the Board of Directors of the Company, acting by Special Vote, may cause the
Company to exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 7(e)) for Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "RATIO OF EXCHANGE"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Ratio of Exchange. The Company
shall give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall mail a notice of any such exchange to all of
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights that will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e)) held by each
holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with Section 24(a), the Company shall either take such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights or alternatively, at the option of the Board of Directors
acting by Special Vote, with respect to each Right (i) pay cash in an amount
equal to the Current Value (as hereinafter defined), in lieu of issuing Common
Stock in exchange therefor, or (ii) issue debt or equity securities or a
combination thereof, having a value equal to the Current Value, in lieu of
issuing Common Stock in exchange for each such Right, where the value of such
securities shall be determined by a nationally recognized investment banking
firm selected by the Board of Directors acting by Special Vote, or (iii) deliver
any combination of cash,
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property, Common Stock and/or other securities having a value equal to the
Current Value in exchange for each Right. For purposes of this Section 24(c)
only, the "CURRENT VALUE" shall mean the product of the current per share market
price of Common Stock (determined pursuant to Section 11(d) on the date of the
occurrence of the event described above in subparagraph (a)) multiplied by the
number of shares of Common Stock for which the Right otherwise would be
exchangeable if there were sufficient shares available. To the extent that the
Company determines that some action need be taken pursuant to clauses (i), (ii),
or (iii) of this Section 24(c), the Board of Directors acting by Special Vote
may temporarily suspend the exercisability of the Rights for a period of up to
sixty (60) days following the date on which the event described in Section 24(a)
shall have occurred, in order to seek any authorization of additional Common
Stock and/or to determine the appropriate form of distribution to be made
pursuant to the above provision 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.
(d) The Company shall not be required to issue fractions of Common
Stock or to distribute certificates that evidence fractional Common Stock. In
lieu of such fractional Common Stock, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Common
Stock would otherwise be issuable, an amount in cash equal to the same fraction
of the current per share market value of a whole Common Stock (as determined
pursuant to the second sentence of Section 11(d)).
(e) The Company may, at the option of the Board of Directors acting by
Special Vote, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board of
Directors acting by Special Vote, based upon the advice of one or more
nationally recognized investment banking firms.
(f) Immediately upon the action of the Board of Directors acting by
Special Vote ordering the exchange of any Rights pursuant to subsection (e) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of rights in exchange
therefore as has been determined by the Board of Directors in accordance with
subsection (e) above. The Company shall give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the transfer agent for the Common Stock
of the Company. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Rights will be
effected.
25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to
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purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least ten (10) days prior to the record date for determining holders of the
shares of Preferred Stock for purposes of such action, and in the case of any
such other action, at least ten (10) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
shares of Preferred Stock whichever shall be the earlier. The failure to give
notice required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
(b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii), and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock
and/or, if appropriate, other securities.
26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
RemedyTemp, Inc.
32122 Camino Capistrano
San Juan Capistrano, California 92675
Attention: Chief Financial Officer
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent 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:
American Stock Transfer & Trust Company
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40 Wall Street
New York, New York 10005
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) 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 Transfer Agent.
27. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, the Board of Directors
of the Company may, in its sole and absolute discretion and the Rights Agent
shall, if the Board of Directors so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock, whether or not such supplement or amendment
is adverse to any holders of Rights. From and after the Distribution Date, and
subject to the penultimate sentence of this Section 27, the Board of Directors
acting by Special Vote may, and the Rights Agent shall, if the Board of
Directors acting by Special Vote so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order to (i) cure
any ambiguity, (ii) correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions hereunder, (iii)
shorten or lengthen any time period hereunder, or (iv) otherwise change or
supplement the provisions hereunder in any manner which the Board of Directors
acting by Special Vote may deem necessary or desirable and which shall not
materially and adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of any
such Person); provided, this Agreement may not be supplemented or amended after
the Distribution Date to (A) make the Rights again redeemable after the Rights
have ceased to be redeemable, or (B) change any other time period unless such
change is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to the holders of Rights (other than any Acquiring Person
and its Associates or Affiliates). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price or the Final Expiration Date. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
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.
29. Determination and Actions by the Board of Directors, etc. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company (acting by Special Vote
where specifically provided for herein) shall have the exclusive power and
authority to
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administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, but not limited to, a
determination to redeem or not redeem the Rights, or to amend 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 of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject any member of
the Board of Directors to any liability to the holders of the Rights or to any
other Person.
30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors of the Company
(acting by Special Vote) determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23, if
lapsed, shall be reinstated and shall not expire until the close of business on
the tenth Business Day following the date of such determination by the Board of
Directors of the Company.
32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of California and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
33. Counterparts. This Agreement may be executed in 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.
34. Descriptive Headings; References. 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.
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References herein to Sections and Exhibits shall, unless otherwise specified, be
to the referenced section or exhibit hereof or hereto.
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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.
REMEDYTEMP, INC.
By:
-----------------------------------
Name: Paul W. Mikos
Title: President
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT A
(FORM OF RIGHTS CERTIFICATE)
CERTIFICATE NO. R______________ ________________RIGHTS
NOT EXERCISABLE AFTER ________, 2006 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.*]
RIGHTS CERTIFICATE
REMEDYTEMP, INC.
This certifies that ________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of ________________, 1996 (the "Rights
Agreement"), between RemedyTemp, Inc., a California corporation (the "Company"),
and American Stock Transfer & Trust Company, a __________________ corporation
(the "Rights Agent"), to purchase from the Company at any time prior to 5:00
P.M. (California time) on _____________, 2006 at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of the Company, at a
purchase price of $65.00 per one one-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The Purchase
Price may be paid by bank draft, certified bank check or money order payable to
the order of the Company.
The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price
- ---------------------
* The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person, and shall replace the
preceding sentence.
41
per share set forth above, are the number and Purchase Price as of
______________, based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate an Acquiring of Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of an Acquiring Person, (or of any such Associate
or Affiliate), or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
The Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the Rights,
limitations of Rights, and obligations, duties and immunities of the Rights
Agent, the Company and the holders of the Rights Certificates, which limitations
of Rights include the temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the office of the Rights Agent and are also
available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate amount of securities as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be (i) redeemed by the Company at its option at a
redemption price of $0.01 per Right or (ii) exchanged by the Company in whole or
part for Common Shares, substantially equivalent rights, or other consideration
as determined by the Company.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depository receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or
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of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meeting or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
The Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _____________________,
(Seal)
ATTEST: REMEDYTEMP, INC.
By: By:
------------------------------- --------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
---------------------------- -----------------------------
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY, as Rights Agent
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
3
43
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________________ hereby sells,
assigns and transfers unto ______________________________________________
___________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
__________________________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company with full power of
substitution.
Dated: ___________________,
______________________________
Signature
Signature Guaranteed:
______________________________
44
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Person (as such terms are defined pursuant to
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated:
-------------------,
- ------------------------------
Signature
Signature Guaranteed:
- ------------------------------
45
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
46
FORM OF ELECTION TO PURCHASE
(TO BE EXECUTED IF HOLDER DESIRES TO
EXERCISE RIGHTS REPRESENTED BY THE
RIGHTS CERTIFICATE)
To: REMEDYTEMP, INC.
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the number of one
one-thousandths of a share of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other Person which may
be issuable upon the exercise of the Rights) and requests that certificates for
such shares be issued in the name of and delivered to:
Please insert social security or other identifying number _____________
(Please print name and address) ____________________________________
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number _____________
(Please print name and address) _______________________________________
________________________________________________________________________________
Dated: ___________________,
______________________________
Signature
Signature Guaranteed:
______________________________
47
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(l) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated:
-------------------,
- ------------------------------
Signature
Signature Guaranteed:
- ------------------------------
48
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.