Exhibit 99.1
HEARTLAND FINANCIAL USA, INC.
and
DUBUQUE BANK AND TRUST COMPANY,
as Rights Agent
RIGHTS AGREEMENT
Dated as of June 7, 2002
TABLE OF CONTENTS
Page
Section 1. Certain Definitions............................ 1
Section 2. Appointment of Rights Agent.................... 6
Section 3. Issue of Right Certificates.................... 6
Section 4. Form of Right Certificates..................... 8
Section 5. Countersignature and Registration.............. 8
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates... 9
Section 7. Exercise of Rights, Purchase Price; Expiration
Date of Rights............................... 10
Section 8. Cancellation and Destruction of Right
Certificates.................................. 11
Section 9. Availability of Shares of Preferred Stock..... 11
Section 10. Preferred Stock Record Date................... 12
Section 11. Adjustment of Purchase Price, Number of
Shares and Number of Rights................... 13
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares........................... 21
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.................... 21
Section 14. Fractional Rights and Fractional Shares....... 25
Section 15. Rights of Action.............................. 26
Section 16. Agreement of Right Holders.................... 26
Section 17. Right Certificate Holder Not Deemed
a Stockholder................................. 27
Section 18. Concerning the Rights Agent................... 27
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.............................. 28
Section 20. Duties of Rights Agent........................ 28
Section 21. Change of Rights Agent........................ 31
Section 22. Issuance of New Right Certificates............ 32
Section 23. Redemption.................................... 32
Section 24. Exchange...................................... 33
Section 25. Notice of Certain Events...................... 34
Section 26. Notices....................................... 35
Section 27. Supplements and Amendments.................... 35
Section 28. Successors.................................... 36
Section 29. Benefits of this Agreement.................... 36
Section 30. Determinations and Actions by the
Board of Directors........................... 36
Section 31. Severability.................................. 36
Section 32. Governing Law................................. 37
Section 33. Counterparts.................................. 37
Section 34. Descriptive Headings.......................... 37
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of June 7, 2002 (this
"Agreement"), is between HEARTLAND FINANCIAL USA, INC., a
Delaware corporation (the "Company"), and DUBUQUE BANK AND TRUST
COMPANY, an Iowa state bank, as Rights Agent (the "Rights
Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock (as hereinafter defined)
of the Company outstanding as of the Close of Business (as
defined below) on June 24, 2002 (the "Record Date"), each Right
representing the right to purchase one one-thousandth (subject to
adjustment) of a share of Preferred Stock (as hereinafter
defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of
one Right (subject to adjustment as provided herein) with respect
to each share of Common Stock that shall become outstanding
between the Record Date and the earlier of the Distribution Date
and the Expiration Date (as such terms are hereinafter defined);
provided, however, that Rights may be issued with respect to
shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance
with Section 22.
Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the
shares of Common Stock then outstanding, but shall not include an
Exempt Person (as such term is hereinafter defined); provided,
however, that (i) if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an
"Acquiring Person" became the Beneficial Owner of a number of
shares of Common Stock such that the Person would otherwise
qualify as an "Acquiring Person" inadvertently (including,
without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (B)
such Person was aware of the extent of its Beneficial Ownership
of Common Stock but had no actual knowledge of the consequences
of such Beneficial Ownership under this Agreement) and without
any intention of changing or influencing control of the Company,
then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement unless and
until such Person shall have failed to divest itself, as soon as
practicable (as determined, in good faith, by the Board of
Directors of the Company), of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person
would no longer otherwise qualify as an "Acquiring Person"; (ii)
if, as of the date hereof or prior to the first public
announcement of the adoption of this Agreement, any Person is or
becomes the Beneficial Owner of 15% or more of the shares of
Common Stock outstanding, such Person shall not be deemed to be
or to become an "Acquiring Person" unless and until such time as
such Person shall, after the first public announcement of the
adoption of this Agreement, become the Beneficial Owner of
additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of
the outstanding Common Stock), unless, upon becoming the
Beneficial Owner of such additional shares of Common Stock, such
Person is not then the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding; and (iii) no Person
shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned
by such Person to 15% or more of the shares of Common Stock then
outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding by reason of such share acquisitions by the
Company and shall thereafter become the Beneficial Owner of any
additional shares of Common Stock (other than pursuant to a
dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of
the outstanding Common Stock), then such Person shall be deemed
to be an "Acquiring Person" unless upon becoming the Beneficial
Owner of such additional shares of Common Stock such Person does
not beneficially own 15% or more of the shares of Common Stock
then outstanding. 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 Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as in effect on the
date hereof.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in
effect on the date hereof.
(c) "American Stock Exchange" shall mean the American
Stock Exchange LLC.
(d) A Person shall be deemed the "Beneficial Owner" of,
shall be deemed to have "Beneficial Ownership" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to beneficially own, directly
or indirectly, within the meaning of Rule l3d-3 of the General
Rules and Regulations under the Exchange Act as in effect on the
date hereof;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, (x) securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase, (y) securities which such Person has a right to acquire
upon the exercise of Rights at any time prior to the time that
any Person becomes an Acquiring Person or (z) securities issuable
upon the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such 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 hereof ("Original Rights") or pursuant to
Section 11(i) or Section 11(n) with respect to an adjustment to
Original Rights; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person and with respect to which such
Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting (except
to the extent contemplated by the proviso to Section 1(c)(ii)(B))
or disposing of such securities of the Company;
provided, however, that no Person who is an officer, director or
employee of an Exempt Person shall be deemed, solely by reason of
such Person's status or authority as such, to be the "Beneficial
Owner" of, to have "Beneficial Ownership" of or to "beneficially
own" any securities that are "beneficially owned" (as defined in
this Section l(c)), including, without limitation, in a fiduciary
capacity, by an Exempt Person or by any other such officer,
director or employee of an Exempt Person. Notwithstanding
anything contained herein to the contrary, no Person who is or
who at any time hereafter shall become a limited partner or a
general partner of Heartland Partnership, LP, an Illinois limited
partnership (the "Family Partnership"), shall, solely as a result
of such Person's status as a limited partner or general partner
of the Family Partnership, be deemed to beneficially own any of
the shares of Common Stock now or at any time hereafter owned by
the Family Partnership or by any other general partner or other
limited partners of the Family Partnership or by the family
members of any such other general partner or other limited
partners. Moreover, none of the shares of Common Stock now or at
any time hereafter owned by any general partner or limited
partner of the Family Partnership or that general or limited
partner's family members shall, solely as a result of that
Person's status as a general or limited partner of the Family
Partnership, be deemed to be beneficially owned by the Family
Partnership or by any other general partner or other limited
partners of the Family Partnership or by the family members of
any such other general partner or other limited partners.
(e) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which state or national banking
institutions in the State in which the principal office of the
Rights Agent is located are authorized or obligated by law or
executive order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., Dubuque, Iowa, time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
Dubuque, Iowa, time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the
Company shall mean the Common Stock, presently par value $1.00
per share, of the Company. "Common Stock" when used with
reference to any Person other than the Company shall mean the
common stock (or, in the case of an unincorporated entity, the
equivalent equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(i) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(j) "Distribution Date" shall have the meaning set forth
in Section 3 hereof.
(k) "Equivalent Preferred Shares" shall have the meaning
set forth in Section 11(b) hereof.
(l) "Exempt Person" shall mean the Company or any
Subsidiary (as such term is hereinafter defined) of the Company,
in each case including, without limitation, in its fiduciary
capacity, or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity or trustee holding
Common Stock for or pursuant to the terms of any such plan or for
the purpose of funding any such plan or funding other employee
benefits for employees of the Company or of any Subsidiary of the
Company.
(m) "Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
(n) "Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(o) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(p) "Flip-In Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(q) "Nasdaq" shall mean The Nasdaq Stock Market.
(r) "New York Stock Exchange" shall mean the New York
Stock Exchange, Inc.
(s) "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, trust or
other entity, and shall include any successor (by merger or
otherwise) to such entity.
(t) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company having the rights and preferences set forth in the Form
of Certificate of Designation attached to this Agreement as
Exhibit A.
(u) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(w) "Redemption Date" shall have the meaning set forth
in Section 7 hereof.
(x) "Redemption Price" shall have the meaning set forth
in Section 23 hereof.
(y) "Right Certificate" shall have the meaning set forth
in Section 3 hereof.
(z) "Securities Act" shall mean the Securities Act of
1933, as amended.
(aa) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(bb) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(cc) "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) of 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 Board of Directors shall become aware
of the existence of an Acquiring Person.
(dd) "Subsidiary" of any Person shall mean any
corporation or other entity of which securities or other
ownership interests having ordinary voting power sufficient to
elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or
indirectly, by such Person, and any corporation or other entity
that is otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the meaning set forth
in Section 3 hereof.
(gg) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(hh) "corporation" shall mean, solely in connection with
the appointment of any successor Rights Agent pursuant to
Section 21 of this Agreement, a corporation or a bank organized
and doing business under the laws of the United States or the
laws of any state of the United States or the District of
Columbia.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date be the holders of
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.
Section 3. Issue of Right Certificates.
(a) Until the Close of Business on the earlier of (i)
the tenth day after the Stock Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action
of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement
by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of such Person (other than
an Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person (other than an
Exempt Person) becoming the Beneficial Owner of shares of Common
Stock aggregating 15% or more of the Common Stock then
outstanding (the earlier of such dates being herein referred to
as the "Distribution Date", provided, however, that if either of
such dates occurs after the date of this Agreement and on or
prior to the Record Date, then the Distribution Date shall be the
Record Date), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common
Stock registered in the names of the holders thereof and not by
separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common
Stock. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign and the Company will send or cause to be sent (and
the Rights Agent will, if requested and at the expense of the
Company send) by first-class, insured, postage-prepaid mail, to
each record holder of Common Stock as of the close of business on
the Distribution Date (other than any Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of
such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right (subject to adjustment
as provided herein) for each share of Common Stock so held. As
of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Shares of Preferred Stock, in substantially the form
of Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person), at the address of such holder shown on the records of
the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in
the names of the holders thereof together with the Summary of
Rights. Until the Distribution Date (or, if earlier, the
Expiration Date), the surrender for transfer of any certificate
for Common Stock outstanding on the Record Date, with or without
a copy of the Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common Stock
represented thereby.
(c) Rights shall be issued in respect of all shares of
Common Stock issued or disposed of (including, without
limitation, upon disposition of Common Stock out of treasury
stock or issuance or reissuance of Common Stock out of authorized
but unissued shares) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date, or in
certain circumstances provided in Section 22 hereof, after the
Distribution Date. Certificates issued for Common Stock
(including, without limitation, upon transfer of outstanding
Common Stock, disposition of Common Stock out of treasury stock
or issuance or reissuance of Common Stock out of authorized but
unissued shares) after the Record Date but prior to the earlier
of the Distribution Date and the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Heartland Financial USA,
Inc. (the "Company") and Dubuque Bank and Trust
Company, as Rights Agent, dated as of June 7,
2002, and as amended from time to time (the
"Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a
copy of which is on file at the principal
executive offices of the Company. Under certain
circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt
of a written request therefor. Under certain
circumstances, as set forth in the Rights
Agreement, Rights owned by or transferred to any
Person who is or becomes an Acquiring Person (as
defined in the Rights Agreement) and certain
transferees thereof will become null and void and
will no longer be transferable.
With respect to such certificates containing the foregoing
legend, until the Distribution Date the Rights associated with
the Common Stock represented by such certificates shall be
evidenced by such certificates alone, and the surrender for
transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby. In the
event that the Company purchases or otherwise acquires any Common
Stock after the Record Date but prior to the Distribution Date,
any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no
longer outstanding.
Notwithstanding this paragraph (c), the omission of a
legend shall not affect the enforceability of any part of this
Agreement or the rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange or interdealer quotation system on which the Rights may
from time to time be listed or quoted, or to conform to usage.
Subject to the provisions of this Agreement, the Right
Certificates 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 Purchase Price, but the number
of such one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by the President of the Company, either manually
or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof and shall be attested by
the Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned either
manually or by facsimile signature by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the Person who
signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf
of the Company by any Person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of
the Company to sign such Right Certificate, although at the date
of the execution of this 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 an office or agency designated
for such purpose, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of this Agreement, at any
time after the Distribution Date and prior to the Expiration
Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a
share of Preferred Stock as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office or
agency of the Rights Agent designated for such purpose.
Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right
Certificates.
(b) Subject to the provisions of this Agreement, at any
time after the Distribution Date and prior to the Expiration
Date, upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price;
Expiration Date of Rights.
(a) Except as otherwise provided herein, the Rights
shall become exercisable on the Distribution Date, and thereafter
the registered holder of any Right Certificate may, subject to
Section 11(a)(ii) hereof and except as otherwise provided herein,
exercise the Rights evidenced thereby in whole or in part upon
surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the office or agency 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 the Rights are exercised,
at any time which is both after the Distribution Date and prior
to the time (the "Expiration Date") that is the earliest of (i)
the Close of Business on June 7, 2012 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date") or (iii)
the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price shall be initially $85.00 for
each one one-thousandth of a share of Preferred Stock purchasable
upon the exercise of a Right. The Purchase Price and the number
of one one-thousandths of a share of Preferred Stock or other
securities or property to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) of
this Section 7.
(c) Except as otherwise provided herein, upon receipt of
a Right Certificate representing exercisable Rights, with the
form of election to purchase duly executed, accompanied by
payment of the aggregate Purchase Price for the shares of
Preferred Stock to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof, in cash or
by certified check, cashier's check or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent of the Preferred
Stock, or make available if the Rights Agent is the transfer
agent for the Preferred Stock, certificates for the number of
shares of Preferred Stock to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from a depositary agent appointed by
the Company depositary receipts representing interests in such
number of one one-thousandths of a share of Preferred Stock as
are to be purchased (in which case certificates for the Preferred
Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent), and the Company hereby
directs any such depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) promptly after receipt
of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less
than all of the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the exercisable Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported transfer or
exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed
the certificate contained in the form of assignment or form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Availability of Shares of Preferred 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 or any shares of Preferred
Stock held in its treasury, the number of shares of Preferred
Stock that will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock issuable
upon the exercise of Rights may be listed or admitted to trading
on any national securities exchange, or quoted on Nasdaq, 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 or admitted to trading on such
exchange, or quoted on Nasdaq, upon official notice of issuance
upon such exercise.
(c) From and after such time as the Rights become
exercisable, the Company shall use its best efforts, if then
necessary to permit the issuance of shares of Preferred Stock
upon the exercise of Rights, to register and qualify such shares
of Preferred Stock under the Securities Act and any applicable
state securities or "Blue Sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement
and qualifications to become effective as soon as possible after
such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Expiration
Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order
to prepare and file a registration statement under the Securities
Act 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 under the Securities Act shall have been declared
effective, unless an exemption therefrom is available.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of
Preferred Stock delivered upon exercise of Rights shall, at the
time of delivery of the certificates therefor (subject to payment
of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares.
(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 Right Certificates or of any shares
of Preferred Stock 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 Right
Certificates to a Person other than, or the issuance or delivery
of certificates or depositary receipts for the Preferred Stock in
a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates or depositary receipts for
Preferred Stock upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by that
holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer
books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall
not be entitled to any rights of a holder of Preferred Stock for
which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of
any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares and Number of Rights. The Purchase Price, the
number of shares of Preferred Stock or other securities or
property purchasable upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a)(i) In the event the Company shall at any time after
the date of this Agreement (A) declare and pay 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 of
Preferred Stock 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), the number
and kind of shares of capital stock issuable upon exercise of a
Right as of the record date for such dividend or the effective
date of such subdivision, combination or reclassification shall
be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preferred Stock transfer books of the Company
were open, the holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification.
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person (the first
occurrence of such event being referred to hereinafter as the
"Flip-In Event"), then (A) the Purchase Price shall be adjusted
to be the Purchase Price in effect immediately prior to the Flip-
In Event multiplied by the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event, whether or not such
Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this Section 11(a)(ii) and
Section 11(a)(iii) hereof, shall thereafter have the right to
receive, upon exercise thereof at a price equal to the Purchase
Price (as so adjusted), in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock, such number
of shares of Common Stock as shall equal the result obtained by
dividing the Purchase Price (as so adjusted) by 50% of the
current per share market price of the Common Stock (determined
pursuant to Section 11(d) hereof) on the date of such Flip-In
Event; provided, however, that the Purchase Price (as so
adjusted) and the number of shares of Common Stock so receivable
upon exercise of a Right shall, following the Flip-In Event, be
subject to further adjustment as appropriate in accordance with
Section 11(f) hereof. Notwithstanding anything in this Agreement
to the contrary, however, from and after the Flip-In Event, any
Rights that are beneficially owned by (x) any Acquiring Person
(or any Affiliate or Associate of any Acquiring Person), (y) a
transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the Flip-In Event or
(z) a transferee of any Acquiring Person (or any such Affiliate
or Associate) who became a transferee prior to or concurrently
with the Flip-In Event pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of
avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be void without any further
action and any holder of such Rights shall thereafter have no
rights whatsoever with respect to such Rights under any provision
of this Agreement. The Company shall use all reasonable efforts
to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. From and after
the Flip-In Event, no Right Certificate shall be issued pursuant
to Section 3 or Section 6 hereof that represents Rights that are
or have become void pursuant to the provisions of this paragraph,
and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be canceled. From and after
the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only in
accordance with Section 13 and not pursuant to this
Section 11(a)(ii).
(iii) The Company may at its option substitute for a
share of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) a number of
shares of Preferred Stock or fraction thereof such that the
current per share market price of one share of Preferred Stock
multiplied by such number or fraction is equal to the current per
share market price of one share of Common Stock. In the event
that there shall not be sufficient shares of Common Stock issued
but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall with respect to
such deficiency, to the extent permitted by applicable law and
any material agreements then in effect to which the Company is a
party (A) determine the excess (such excess, the "Spread") of (1)
the value of the shares of Common Stock issuable upon the
exercise of a Right in accordance with the foregoing subparagraph
(ii) (the "Current Value") over (2) the Purchase Price (as
adjusted in accordance with the foregoing subparagraph (ii)), and
(B) with respect to each Right (other than Rights which have
become void pursuant to the foregoing subparagraph (ii)), make
adequate provision to substitute for the shares of Common Stock
issuable in accordance with the foregoing subparagraph (ii) upon
exercise of the Right and payment of the Purchase Price (as
adjusted in accordance therewith), (1) cash, (2) a reduction in
such Purchase Price, (3) shares of Preferred Stock or other
equity securities of the Company (including, without limitation,
shares or fractions of shares of preferred stock which, by virtue
of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock, are deemed in
good faith by the Board of Directors to have substantially the
same value as the shares of Common Stock (such shares of
Preferred Stock and shares or fractions of shares of preferred
stock are hereinafter referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having a value
which, when added to the value of the shares of Common Stock
issued upon exercise of such Right, shall have an aggregate value
equal to the Current Value (less the amount of any reduction in
such Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good
faith by the Board of Directors; provided, however, that if the
Company shall not make adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the Flip-In Event (the date of the Flip-In Event being the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, to the extent permitted by applicable law
and any material agreements then in effect to which the Company
is a party, upon the surrender for exercise of a Right and
without requiring payment of such Purchase Price, shares of
Common Stock (to the extent available), and then, if necessary,
such number or fractions of shares of Preferred Stock (to the
extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If,
upon the occurrence of the Flip-In Event, the Board of Directors
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, then, if the Board
of Directors so elects, 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 stockholder approval for the
authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution
Period"). To the extent that the Company determines that some
action need be taken pursuant to the second and/or third sentence
of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) hereof, that such action shall apply uniformly
to all outstanding Rights and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant
to such second 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 shares of
Common Stock shall be the current per share market price (as
determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii)
Trigger Date and the per share or fractional value of any "Common
Stock Equivalent" shall be deemed to equal the current per share
market price of the Common Stock. The Board of Directors of the
Company may, but shall not be required to, establish procedures
to allocate the right to receive shares of Common Stock upon the
exercise of the Rights among holders of Rights pursuant to this
Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("Equivalent
Preferred Shares")) or securities convertible into Preferred
Stock or Equivalent Preferred Shares at a price per share of
Preferred Stock or Equivalent Preferred Shares (or having a
conversion price per share, if a security convertible into shares
of Preferred Stock or Equivalent Preferred Shares) less than the
then current per share market price of the Preferred Stock
(determined pursuant to Section 11(d) hereof) on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock and Equivalent Preferred Shares outstanding on such record
date plus the number of shares of Preferred Stock and Equivalent
Preferred Shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred
Shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such record date plus
the number of additional shares of Preferred Stock and/or
Equivalent Preferred Shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
Shares of Preferred Stock and Equivalent Preferred Shares owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market
price of the Preferred Stock (determined pursuant to
Section 11(d) hereof) on such record date, less the fair market
value (as determined in good faith by the Board of Directors of
the Company whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of
Preferred Stock, and the denominator of which shall be such
current per share market price (determined pursuant to
Section 11(d) hereof) of the Preferred Stock; provided, however,
that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise
of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d)(i) Except as otherwise provided herein, for the
purpose of any computation hereunder, the "current per share
market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that
in the event that the current per share market price of the
Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security, and prior to the expiration
of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported by the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the American or the New York Stock
Exchange or, if the Security is not listed or admitted to trading
on the American or the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading
or, if the Security is not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other
system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market
price" of the Preferred Stock shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Preferred
Stock is not publicly traded but the Common Stock is publicly
traded, the "current per share market price" of the Preferred
Stock shall be conclusively deemed to be the current per share
market price of the Common Stock as determined pursuant to
Section 11(d)(i) multiplied by the then applicable Adjustment
Number (as defined in and determined in accordance with the
Certificate of Designation for the Preferred Stock). If neither
the Common Stock nor the Preferred Stock is publicly traded,
"current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest one one-thousandth of a share of Preferred Stock or one-
hundredth of a share of Common Stock or other share or security
as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock of the Company other than the Preferred Stock, thereafter
the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), 11(b), 11(c), 11(e),
11(h), 11(i) and 11(m) hereof, as applicable, 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 11(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-
thousandths of a share of Preferred Stock (calculated to the
nearest one one-thousandth of a share of Preferred Stock)
obtained by (i) multiplying (x) the number of one one-thousandths
of a share purchasable upon the exercise of a Right immediately
prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price pursuant to Sections 11(b) or
11(c) hereof to adjust the number of Rights, in substitution for
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 such adjustment of 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-hundredth)
obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the
adjustment to be made. Such record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company may, as
promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date
specified in the public announcement.
(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 a Right, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-thousandths
of a share of Preferred Stock which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value,
if any, of the fraction of Preferred Stock or other shares of
capital stock issuable upon exercise of a Right, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Preferred
Stock or other such shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event issuing to the holder of
any Right exercised after such record date the Preferred Stock
and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the 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 upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
adjustments in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, issuance
wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock,
dividends on Preferred Stock payable in shares of Preferred Stock
or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company
shall (i) declare and pay any dividend on the Common Stock
payable in Common Stock or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or
otherwise than by payment of a dividend payable in Common Stock)
into a greater or lesser number of shares of Common Stock, then,
in each such case, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered
thereafter, shall be proportionately adjusted so that the number
of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following the
occurrence of such event.
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not,
except as permitted by Sections 23, 24 or 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action
will diminish substantially or eliminate the benefits intended to
be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Stock
and the Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof (if so required under
Section 25 hereof). The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event, directly or indirectly, at any time
after the Flip-In Event (i) the Company shall consolidate with or
shall merge into any other Person, (ii) any Person shall merge
with and into the Company and the Company shall be the continuing
or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other
Person (or of the Company) or cash or any other property, or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in
one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than
the Company or one or more wholly-owned Subsidiaries of the
Company), then upon the first occurrence of such event, proper
provision shall be made so that: (A) each holder of a Right
(other than Rights which have become void pursuant to
Section 11(a)(ii) hereof) shall thereafter have the right to
receive, upon the exercise thereof at the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in
lieu of shares of Preferred Stock or Common Stock of the Company,
such number of validly authorized and issued, fully paid, non-
assessable and freely tradeable 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 equal the result obtained by
dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the current
per share market price of the Common Stock of such Principal
Party (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer;
provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the
number of shares of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject to further
adjustment as appropriate in accordance with Section 11(f) hereof
to reflect any events occurring in respect of the Common Stock of
such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (B) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal
Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its shares of Common Stock in accordance with Section 9
hereof) in connection with such 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 the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; provided that, upon
the subsequent occurrence of any consolidation, merger, sale or
transfer of assets 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 as provided in this Section 13(a), such cash,
shares, rights, warrants and other property which such holder
would have been entitled to receive had such holder, at the time
of such transaction, owned the Common Stock of the Principal
Party receivable upon the exercise of a Right pursuant to this
Section 13(a), 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.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (i)
or (ii) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which the shares
of Common Stock are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer the shares
of Common Stock of which have the greatest aggregate market value
of shares outstanding, or (B) if no securities are so issued, (x)
the Person that is the other party to the merger, if such Person
survives said merger, or, if there is more than one such Person,
the Person the shares of Common Stock of which have the greatest
aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the
Company if it survives) or (z) the Person resulting from the
consolidation; and
(ii) in the case of any transaction described in
(iii) of the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving
the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of Common
Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described
in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of
such Person is not at such time or has not been continuously over
the preceding 12-month period registered under Section 12 of the
Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has
been so registered, the term "Principal Party" shall refer to
such other Person, or (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stock
of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the
issuer of Common Stock having the greatest aggregate market value
of shares outstanding, or (3) if such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person,
the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all
of such joint venturers, and the Principal Party in each such
case shall bear the obligations set forth in this Section 13 in
the same ratio as its interest in such Person bears to the total
of such interests.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) hereof
unless prior thereto the Company and the Principal Party involved
therein shall have executed and delivered to the Rights Agent an
agreement confirming that the requirements of Sections 13(a) and
(b) hereof shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and
providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Securities Act, if necessary, with respect to the Rights and
the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the
Expiration Date and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the Common Stock of
the Principal Party shall be listed or admitted to trading on the
American or New York Stock Exchange or on another national
securities exchange, to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on the American or New York Stock Exchange
or such other national securities exchange, or, if the Common
Stock of the Principal Party shall not be listed or admitted to
trading on the American or New York Stock Exchange or other
national securities exchange, to cause the Rights and the
securities receivable upon exercise of the Rights to be
authorized for quotation on Nasdaq or on such other system then
in use;
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party which
comply in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal
or preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
(d) In case the Principal Party has provision in any of
its authorized securities or in its certificate of incorporation
or by-laws or other instrument governing its affairs, which
provision would have the effect of (i) causing such Principal
Party to issue (other than to holders of Rights pursuant to this
Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13,
shares of Common Stock or Common Stock Equivalents of such
Principal Party at less than the then current market price per
share thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock or
Common Stock Equivalents of such Principal Party at less than
such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance
of the Common Stock of such Principal Party pursuant to the
provisions of Section 13, then, in such event, the Company hereby
agrees with each holder of Rights that it shall not consummate
any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed,
so that the applicable provision will have no effect in
connection with, or as a consequence of, the consummation of the
proposed transaction.
(e) The Company covenants and agrees that it shall not,
at any time after the Flip-In Event, enter into any transaction
of the type described in clauses (i) through (iii) of
Section 13(a) hereof if (i) at the time of or immediately after
such consolidation, merger, sale, transfer or other transaction
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, (ii) prior to, simultaneously with or
immediately after such consolidation, merger, sale, transfer or
other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for
purposes of Section 13(b) hereof shall have received a
distribution of Rights previously owned by such Person or any of
its Affiliates or Associates or (iii) the form or nature of
organization of the Principal Party would preclude or limit the
exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights (except prior to the Distribution Date in accordance
with Section 11(n) hereof) or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the American or New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the American or
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 Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) 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)
upon the exercise or exchange of Rights. Interests in fractions
of Preferred Stock in integral multiples of one one-thousandth of
a share of Preferred Stock may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners
of the Preferred Stock represented by such depositary receipts.
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 shall pay to the registered holders of Right
Certificates at the time such Rights are exercised or exchanged
as herein provided an amount in cash equal to the same fraction
of the current market value of a whole share of Preferred Stock
(as determined in accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such exercise or
exchange.
(c) The Company shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock upon the exercise or
exchange of Rights. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole share
of Common Stock (as determined in accordance with Section 14(a)
hereof) for the Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise or exchange of a Right
(except as provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), on his own behalf and for his own benefit, may
enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
Right Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided therein and in this
Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowl
edged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of
a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Stock;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the office or agency of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Right Certificates or the Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject
to Section 7(c) hereof, shall be affected by any notice to the
contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Stock or any other securities
of the Company which may at any time be issuable on the exercise
or exchange of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in
this Agreement), or to receive dividends or subscription rights,
or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised or exchanged in accordance
with the provisions hereof. The costs and expenses of enforcing
the right of indemnification shall also be paid by the Company.
The indemnification provided for hereunder shall survive the
expiration of the Rights and termination of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense,
incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending
against any claim of liability arising therefrom, directly or
indirectly. The costs and expenses of enforcing this right of
indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the
expiration of the Rights and termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and
shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance
upon any Right Certificate or certificate for the Preferred Stock
or 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, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including, but not limited to lost, profits), even if
the Rights Agent has been advised of the likelihood of such loss
or damage and regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(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
stock transfer or corporate trust powers of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in
its prior name or in its changed name and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, and no implied duties or
obligations shall be read into this Agreement against the Rights
Agent, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from
acting, the Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the President and the
Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights provided for in Sections 3,
11, 13, 23 and 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates
after receipt of a certificate furnished pursuant to Section 12,
describing such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Preferred Stock
or other securities to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of Preferred
Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any person reasonably believed by the
Rights Agent to be one of the President or the Secretary 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 by it in good faith in accordance with
instructions of any such officer or for any delay in acting while
waiting for those instructions. Any application by the Rights
Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be
taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application
(which date shall not be less than five Business Days after the
date any officer of the Company actually receives such
application unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of
election to purchase set forth on the reverse thereof, as the
case may be, has not been completed to certify the holder is not
an Acquiring Person (or an Affiliate or Associate thereof), the
Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with
the Company.
(k) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(l) Except as expressly provided in this Agreement, the
Rights Agent shall not be required to take notice or be deemed to
have any notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement
or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the
Company of such fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date and at the expense of the
Company, to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail, and, following the Distribution
Date, to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by
the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the
United States or the laws of any state of the United States or
the District of Columbia, in good standing, which is authorized
under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the
Common Stock or Preferred Stock, and, following the Distribution
Date, mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such forms as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale
of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock
options, (ii) under any employee plan or arrangement, (iii) upon
the exercise, conversion or exchange of securities, notes or
debentures issued by the Company or (iv) a contractual obligation
of the Company, in each case existing prior to the Distribution
Date, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at any
time prior to the Flip-In Event, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring in respect of the
Common Stock after the date hereof (the redemption price being
hereinafter referred to as the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish. The Redemption Price shall be
payable, at the option of the Company, in cash, shares of Common
Stock, or such other form of consideration as the Board of
Directors shall determine.
(b) Immediately upon the action of the Board of
Directors ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23 (or at such later time as the
Board of Directors may establish for the effectiveness of such
redemption), 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. The Company shall promptly give
public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption of
the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common 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 shall state
the method by which the payment of the Redemption Price will be
made.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after the Flip-In Event, exchange all or part
of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring in respect of the Common Stock after the
date hereof (such amount per Right being hereinafter referred to
as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange
at any time after an Acquiring Person shall have become the
Beneficial Owner of shares of Common Stock aggregating 50% or
more of the shares of Common Stock then outstanding. From and
after the occurrence of an event specified in Section 13(a)
hereof, any Rights that theretofore have not been exchanged
pursuant to this Section 24(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged
pursuant to this Section 24(a). The exchange of the Rights by
the Board of Directors may be made effective at such time, on
such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of
the Board of Directors of the Company ordering the exchange of
any Rights pursuant to paragraph (a) of this Section 24 and
without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all
of the holders of the Rights so exchanged at their last addresses
as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) The Company may at its option substitute, and, in
the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to
permit an exchange of Rights for Common Stock as contemplated in
accordance with this Section 24, the Company shall substitute to
the extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a
number of shares of Preferred Stock or fraction thereof (or
Equivalent Preferred Shares, as such term is defined in
Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one share of
Preferred Stock (or Equivalent Preferred Share) multiplied by
such number or fraction is equal to the current per share market
price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such exchange.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the
earlier of the Distribution Date or the Stock Acquisition Date
propose (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Stock or to make any other
distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of
its Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or
combination of outstanding Preferred Stock), (iv) to effect the
liquidation, dissolution or winding up of the Company, or (v) to
pay any dividend on the Common Stock payable in Common Stock or
to effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such dividend
or distribution or offering of rights or warrants, or the date on
which such liquidation, dissolution, winding up,
reclassification, subdivision, combination or consolidation is to
take place and the date of participation therein by the holders
of the Common Stock and/or 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 10 days prior
to the record date for determining holders of the Preferred Stock
for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever
shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or
Section 13 shall occur then the Company shall as soon as
practicable thereafter give to each holder of a Right Certificate
(or if occurring prior to the Distribution Date, the holders of
the Common Stock) in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Section 11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by, first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Heartland Financial USA, Inc.
1398 Central Street
Dubuque, Iowa 52004
Attention: President
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
registered or certified mail and shall be deemed given upon
receipt, addressed (until another address is filed in writing
with the Company) as follows:
Dubuque Bank and Trust Company
1398 Central Street
Dubuque, Iowa 52004
Attention: President
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Except as
provided in the penultimate sentence of this Section 27, for so
long as the Rights are then redeemable, the Company may in its
sole and absolute discretion, and the Rights Agent shall if the
Company so directs and at the expense of the Company, supplement
or amend any provision of this Agreement in any respect without
the approval of any holders of the Rights. At any time when the
Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the
Rights Agent shall, if the Company so directs and at the expense
of the Company, supplement or amend this Agreement without the
approval of any holders of Rights, provided that no such
supplement or amendment may (a) adversely affect the interests of
the holders of Rights as such (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person), (b) cause this
Agreement again to become amendable other than in accordance with
this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes
the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the
supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or
amendment, provided that any supplement or amendment that does
not amend Sections 18, 19, 20 or 21 hereof in a manner adverse to
the Rights Agent shall become effective against all parties
immediately upon execution by the Company, whether or not also
executed by the Rights Agent, and provided further, that any
supplement or amendment that amends Section 18, 19, 20 or 21
hereof in a manner adverse to the Rights Agent shall become
effective against the Rights Agent only upon the execution of
such supplement or amendment by the Rights Agent.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 30. Determinations and Actions by the Board of
Directors. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise the 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, without limitation,
a determination to redeem or not redeem the Rights or to amend or
not amend this Agreement). All such actions, calculations,
interpretations and determinations that are done or made by the
Board of Directors of the Company in good faith, shall be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties.
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
[THIS SPACE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first
above written.
HEARTLAND FINANCIAL USA, INC.
By:___________________________
Name: Lynn B. Fuller
Title: President
DUBUQUE BANK AND TRUST COMPANY,
as Rights Agent
By:____________________________
Name: John K. Schmidt
Title: President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
HEARTLAND FINANCIAL USA, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Heartland Financial USA, Inc., a corporation organized
and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), in accordance with the provisions
of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate of
Incorporation of the said Corporation, the said Board of
Directors on June 3, 2002, adopted the following resolution
creating a series of 16,000 shares of Preferred Stock designated
as "Series A Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority
vested in the Board of Directors of this
Corporation in accordance with the provisions of
the Certificate of Incorporation, a series of
Preferred Stock, par value $1.00 per share, of
the Corporation be and hereby is created, and
that the designation and number of shares thereof
and the voting and other powers, preferences and
relative, participating, optional or other rights
of the shares of such series and the
qualifications, limitations and restrictions
thereof are as follows:
Series A Junior Participating Preferred Stock
1. Designation and Amount. There shall be a series of
Preferred Stock that shall be designated as "Series A Junior
Participating Preferred Stock," and the number of shares
constituting such series shall be 16,000. Such number of shares
may be increased or decreased by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the
number of shares of Series A Junior Participating Preferred Stock
to less than the number of shares then issued and outstanding
plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the
holders of any shares of any class or series of stock of the
Corporation ranking prior and superior to the shares of Series A
Junior Participating Preferred Stock with respect to dividends,
the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of any class or
series of stock of the Corporation ranking junior to the Series A
Junior Participating Preferred Stock in respect thereof, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first business day of
January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A
Junior Participating Preferred Stock, in an amount per one one-
thousandth of a share (rounded to the nearest cent) equal to the
greater of (a) $0.10 or (b) the Adjustment Number (as defined
below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock,
par value $1.00 per share, of the Corporation (the "Common
Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction
of a share of Series A Junior Participating Preferred Stock. The
"Adjustment Number" shall initially be 1,000. In the event the
Corporation shall at any time after June 7, 2002, (i) declare and
pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock
as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Junior Participating
Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Junior
Participating Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of
Series A Junior Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-
share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following
voting rights:
(A) Each share of Series A Junior Participating
Preferred Stock shall entitle the holder thereof to a number of
votes equal to the Adjustment Number on all matters submitted to
a vote of the stockholders of the Corporation.
(B) Except as required by law, by Section 3(C) and
by Section 10 hereof, holders of Series A Junior Participating
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
(C) If, at the time of any annual meeting of
stockholders for the election of directors, the equivalent of six
quarterly dividends (whether or not consecutive) payable on any
share or shares of Series A Junior Participating Preferred Stock
are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In
addition to voting together with the holders of Common Stock for
the election of other directors of the Corporation, the holders
of record of the Series A Junior Participating Preferred Stock,
voting separately as a class to the exclusion of the holders of
Common Stock, shall be entitled at said meeting of stockholders
(and at each subsequent annual meeting of stockholders), unless
all dividends in arrears on the Series A Junior Participating
Preferred Stock have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors
of the Corporation, the holders of any Series A Junior
Participating Preferred Stock being entitled to cast a number of
votes per share of Series A Junior Participating Preferred Stock
as is specified in paragraph (A) of this Section 3. Each such
additional director shall serve until his successor shall be
elected and shall qualify, or until his right to hold such office
terminates pursuant to the provisions of this Section 3(C). If
and when such default shall cease to exist, the holders of the
Series A Junior Participating Preferred Stock shall be divested
of the foregoing special voting rights, subject to revesting in
the event of each and every subsequent like default in payments
of dividends. Upon the termination of the foregoing special
voting rights, the terms of office of all persons who may have
been elected directors pursuant to said special voting rights
shall forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(C) shall be in addition
to any other voting rights granted to the holders of the Series A
Junior Participating Preferred Stock in this Section 3.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled; or
(iii) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking on a parity with
the Series A Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of Series A Junior Participating Preferred Stock, or to
such holders and holders of any such shares ranking on a parity
therewith, upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired
promptly after the acquisition thereof. All such shares shall
upon their retirement become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to any conditions and restrictions on
issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation, dissolution or winding up of the Corporation,
voluntary or otherwise, no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Series A Junior Participating Preferred
Stock shall have received an amount per one thousandth of a share
(the "Series A Liquidation Preference") equal to the greater of
(i) $0.01 plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date
of such payment, or (ii) the Adjustment Number times the per
share amount of all cash and other property to be distributed in
respect of the Common Stock upon such liquidation, dissolution or
winding up of the Corporation.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other classes and series of stock of the Corporation, if
any, that rank on a parity with the Series A Junior Participating
Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of
the Series A Junior Participating Preferred Stock and the holders
of such parity shares in proportion to their respective
liquidation preferences.
(C) Neither the merger or consolidation of the
Corporation into or with another entity nor the merger or
consolidation of any other entity into or with the Corporation
shall be deemed to be a liquidation, dissolution or winding up of
the Corporation within the meaning of this Section 6.
7. Consolidation, Merger, Etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the outstanding shares of Common Stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share
equal to the Adjustment Number times the aggregate amount of
stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged.
8. No Redemption. Shares of Series A Junior
Participating Preferred Stock shall not be subject to redemption
by the Corporation.
9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Preferred Stock as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding
up, unless the terms of any such series shall provide otherwise,
and shall rank senior to the Common Stock as to such matters.
10. Amendment. At any time that any shares of Series A
Junior Participating Preferred Stock are outstanding, the
Certificate of Incorporation of the Corporation shall not be
amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the
outstanding shares of Series A Junior Participating Preferred
Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share that shall
entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate
in distributions and to have the benefit of all other rights of
holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this [____] day of [___________], 2002.
HEARTLAND FINANCIAL USA, INC.
By:
Name:
Title:
Exhibit B
Form of Right Certificate
Certificate No. R-______
NOT EXERCISABLE AFTER June 7, 2012, OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN
ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
RIGHT CERTIFICATE
HEARTLAND FINANCIAL USA, 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 June 7, 2002, as the same may be amended
from time to time (the "Rights Agreement"), between Heartland
Financial USA, Inc., a Delaware corporation (the "Company"), and
Dubuque Bank and Trust Company, an Iowa state bank, as Rights
Agent (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., Dubuque, Iowa time, on
June 7, 2012, at the office or agency of the Rights Agent
designated for such purpose, or of its successor as Rights Agent,
one one-thousandth of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $1.00
per share (the "Preferred Stock"), of the Company at a purchase
price of $85.00 per one one-thousandth of a share of Preferred
Stock (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights
Certificate (and the number of one one-thousandths of a share of
Preferred Stock which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of June 7, 2002, based on the
Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of
one one-thousandths of a share of Preferred Stock (or other
securities or property) which may be purchased upon the exercise
of the Rights and the number of Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-
mentioned office or agency of the Rights Agent. The Company will
mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or agency of the
Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at a redemption price of $0.01 per Right or (ii) may be
exchanged in whole or in part for shares of the Company's Common
Stock, par value $1.00 per share, or shares of Preferred Stock.
No fractional shares of Preferred Stock or Common Stock
will be issued upon the exercise or exchange of any Right or
Rights evidenced hereby (other than fractions of Preferred Stock
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 Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Stock or of any other
securities of the Company which may at any time be issuable on
the exercise or exchange hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have
been exercised or exchanged as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of ,
________.
HEARTLAND FINANCIAL USA, INC.
By:__________________________________
[Title]
ATTEST:
____________________________________
[Title]
Countersigned:
DUBUQUE BANK AND TRUST COMPANY, as Rights Agent
By__________________________________
[Title]
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________________ hereby
sells, assigns and transfers unto:
_________________________________________________________________
(Please print name and address of transferee)
_______ Rights represented by this Right Certificate, together
with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ___________________________
Attorney, to transfer said Rights on the books of the within-
named Company, with full power of substitution.
Dated: ____________________________
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company,
broker, dealer or other eligible institution participating in a
recognized signature guarantee medallion program.
...................................................................
(To be completed)
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by, were not acquired by the undersigned from, and are not being
assigned to an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
________________________________
Signature
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To HEARTLAND FINANCIAL USA, INC.:
The undersigned hereby irrevocably elects to exercise
________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock (or other securities or property)
issuable upon the exercise of such Rights and requests that
certificates for such shares of Preferred Stock (or such other
securities) be issued in the name of:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated:________________________
________________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a bank, trust company,
broker, dealer or other eligible institution participating in a
recognized signature guarantee medallion program.
Form of Reverse Side of Right Certificate - continued
_________________________________________________________________
(To be completed)
The undersigned certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by, and were
not acquired by the undersigned from, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement).
________________________________
Signature
_________________________________________________________________
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, such Assignment or Election to
Purchase will not be honored.
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED
TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK OF
HEARTLAND FINANCIAL USA, INC.
On June 3, 2002, the Board of Directors of Heartland
Financial USA, Inc. (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $1.00 per share, of the Company
(the "Common Stock"). The dividend is payable on June 26, 2002,
to the stockholders of record on, June 24, 2002 (the "Record
Date"). Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company (the "Preferred Stock") at a price of $85.00 per
one one-thousandth of a share of Preferred Stock (the "Purchase
Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of June 7,
2002, as the same may be amended from time to time (the "Rights
Agreement"), between the Company and Dubuque Bank and Trust
Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (with certain exceptions, an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock or (ii) 10 business days (or
such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated
persons becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates
being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Stock certificates
outstanding as of the Record Date, by such Common Stock
certificate together with a copy of this Summary of Rights. A
person who is a general or limited partner of Heartland
Partnership, LP, will not be deemed, solely as a result of that
person's status as a partner, to beneficially own any of the
shares of Common Stock owned by that partnership or by any other
partners of that partnership. Additionally, Heartland
Partnership, LP will not be deemed to beneficially own any of the
shares of Common Stock owned by its partners, solely as a result
of a person's status as a general or limited partner. This is
more fully described in the Rights Agreement.
The Rights Agreement provides that, until the
Distribution Date (or earlier expiration of the Rights), the
Rights will be transferred with and only with the Common Stock.
Until the Distribution Date (or earlier expiration of the
Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuances of Common Stock will contain
a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier expiration of the Rights), the
surrender for transfer of any certificates for shares of Common
Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights, will also
constitute the transfer of the Rights associated with the shares
of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close
of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on June 7, 2012 (the "Final
Expiration Date"), unless the Final Expiration Date is advanced
or extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights is subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred
Stock at a price, or securities convertible into Preferred Stock
with a conversion price, less than the then-current market price
of the Preferred Stock or (iii) upon the distribution to holders
of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable
in Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
The number of outstanding Rights is subject to adjustment
in the event of a stock dividend on the Common Stock payable in
shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of
the Rights will not be redeemable. Each share of Preferred Stock
will be entitled, when, as and if declared, to a minimum
preferential quarterly dividend payment of the greater of (a)
$0.10 per one one-thousandth of a share, and (b) an amount equal
to 1,000 times the dividend declared per share of Common Stock.
In the event of liquidation, dissolution or winding up of the
Company, the holders of the Preferred Stock will be entitled to a
minimum preferential payment of the greater of (a) $0.01 per
share (plus any accrued but unpaid dividends), and (b) an amount
equal to 1,000 times the payment made per share of Common Stock.
Each one one-thousandth of a share of Preferred Stock will have
one vote, voting together with the Common Stock. Finally, in the
event of any merger, consolidation or other transaction in which
outstanding shares of Common Stock are converted or exchanged,
each one one-thousandth of a share of Preferred Stock will be
entitled to receive the same amount received per one share of
Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of the one one-
thousandth interest in a share of Preferred Stock purchasable
upon exercise of each Right should approximate the value of one
share of Common Stock.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereupon become void), will thereafter have
the right to receive upon exercise of a Right that number of
shares of Common Stock having a market value of two times the
exercise price of the Right.
In the event that, after a person or group has become
an Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provisions
will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become
void) will thereafter have the right to receive upon the exercise
of a Right that number of shares of common stock of the person
with whom the Company has engaged in the foregoing transaction
(or its parent) that at the time of such transaction have a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the earlier of one of the events
described in the previous paragraph or the acquisition by such
Acquiring Person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such Acquiring Person
which will have become void), in whole or in part, for shares of
Common Stock or Preferred Stock (or a series of the Company's
preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of Common Stock,
or a fractional share of Preferred Stock (or other preferred
stock) equivalent in value thereto, per Right.
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
shares of Preferred Stock or Common Stock will be issued (other
than fractions of Preferred Stock 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 depositary
receipts), and in lieu thereof an adjustment in cash will be made
based on the current market price of the Preferred Stock or the
Common Stock.
At any time prior to the time an Acquiring Person
becomes such, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price") payable, at the option of the
Company, in cash, shares of Common Stock or such other form of
consideration as the Board of Directors of the Company shall
determine. The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
For so long as the Rights are then redeemable, the
Company may, except with respect to the Redemption Price, amend
the Rights Agreement in any manner. After the Rights are no
longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner that
does not adversely affect the interests of holders of the Rights.
Until a Right is exercised or exchanged, the holder
thereof, as such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote or to
receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a report on
Form 8-K dated [___________], 2002. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is
hereby incorporated herein by reference.