BELLAVISTA CAPITAL, INC.
AND
MELLON INVESTOR SERVICES LLC
AS RIGHTS AGENT
SHAREHOLDER RIGHTS AGREEMENT
DATED AS OF JULY 19, 2004
SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of July 19, 2004, between BellaVista Capital, Inc.,
a Maryland corporation (the "Company"), and Mellon Investor Services LLC, a New
Jersey limited liability company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and
WHEREAS, the Company is authorized to issue up to 50,000,000 shares of
stock, of which 40,000,000 shares are designated as Class A Convertible
Preferred Stock, par value $0.01 per share (the "Preferred Stock") and
10,000,000 are designated as Common Stock, par value $0.01 per share (the
"Common Stock") and, at December 31, 2003, there were issued and outstanding
22,229,739 shares of Preferred Stock and 100 shares of Common Stock, issued and
outstanding; and
WHEREAS, under the automatic conversion provisions of the Company's
Articles Supplementary, each share of its Preferred Stock, both issued and
authorized but unissued, will automatically convert to one share of Common Stock
as of September 1, 2004; and
WHEREAS, on July 19, 2004 the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as such term is
hereinafter defined) for each share of Preferred Stock outstanding as of July 1,
2004 (the "Record Date"), and authorized the issuance of one Right for each
share of Preferred Stock and Common Stock of the Company issued (whether or not
originally issued or sold from the Company's treasury, except in the case of
treasury shares having associated Rights) between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Expiration Date
(as such terms are hereinafter defined), each Right initially representing the
right to purchase one share of Common Stock of the Company, upon the terms and
subject to the conditions hereinafter set forth (the "Rights"); and
WHEREAS, the Company desires to appoint the Rights Agent to act as
rights agent hereunder, in accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the shares of
Common Stock or Preferred Stock of the Company then outstanding, but
shall not include (i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee benefit plan or
compensation arrangement of the Company or any Subsidiary of the
Company or (iv) any Person holding shares of Common Stock or Preferred
Stock of the Company organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the terms of any
such employee benefit plan or compensation arrangement (the Persons
described in clauses (i) through (iv) above are referred to herein as
"Exempt Persons"); provided, however, that the term "Acquiring Person"
shall not include any Grandfathered Person, unless such Grandfathered
Person becomes the Beneficial Owner of a percentage of the shares of
Common Stock or Preferred Stock of the Company then outstanding equal
to or exceeding such Grandfathered Person's Grandfathered Percentage.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition by the Company of
Common Stock or Preferred Stock of the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares Beneficially Owned by such Person to 15% (or in the case of a
Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock or
Preferred Stock of the Company then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 15% (or in the
case of a Grandfathered Person, the Grandfathered Percentage applicable
to such Grandfathered Person) or more of the shares of Common Stock or
Preferred Stock of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional shares (other
than pursuant to a stock split, stock dividend or similar transaction)
of Common Stock or Preferred Stock of the Company and immediately
thereafter be the Beneficial Owner of 15% (or in the case of a
Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock or
Preferred Stock of the Company then outstanding, then such Person shall
be deemed to be an "Acquiring Person."
In addition, notwithstanding the foregoing, and notwithstanding
anything to the contrary provided in the Agreement including without
limitation in Sections 1(ii), 3(a) or 27, a Person shall not be an
"Acquiring Person" if the Board of Directors of the Company determines
at any time that a Person who would otherwise be an "Acquiring Person,"
has become such without intending to become an "Acquiring Person," and
such Person divests as promptly as practicable (or within such period
of time as the Board of Directors of the Company determines is
reasonable) a sufficient number of shares of Common Stock or Preferred
Stock of the Company so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of
this Section 1(a).
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "Rules") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this
2
Agreement; provided, however, that no Person who is a director or
officer of the Company shall be deemed an Affiliate or an Associate of
any other director or officer of the Company solely as a result of his
or her position as director or officer of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own" and have "Beneficial Ownership"
of, any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, Beneficially
Owns (as determined pursuant to Rule 13d-3 of the Rules under
the Exchange Act, as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has:
(A) the right to acquire (whether or not such
right is exercisable immediately or only after the
passage of time or upon the satisfaction of any
conditions or both) pursuant to any agreement,
arrangement or understanding (whether or not in
writing) (other than customary agreements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities)
or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own" or have "Beneficial
Ownership" of, (1) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange; (2) securities
issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event; or (3)
securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Sections 3(a), 11(i)
or 22 hereof; or
(B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or
not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own" or have "Beneficial Ownership" of,
any security under this clause (B) if the agreement,
arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent
given in response to a public proxy or consent
solicitation made pursuant to a written proxy or
consent solicitation statement filed with the
Securities and Exchange Commission in accordance with
the Rules of the Exchange Act and (2) is not also
then reportable by such person on Schedule 13D under
the Exchange Act (or any comparable or successor
report); or
(C) the right to dispose of pursuant to any
agreement, arrangement or understanding (whether or
not in writing) (other than customary agreements with
and between underwriters and selling group members
with respect to a bona fide public offering of
securities); or
(iii) which are Beneficially Owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) (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
3
(except pursuant to a revocable proxy or consent as described
in clause (B) of Section 1(d)(ii) hereof) or disposing of any
securities of the Company;
provided, however, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial Owner of any
securities acquired through such Person's participation as an
underwriter in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition, and
(2) no Person who is a director or an officer of the Company shall be
deemed, as a result of his or her position as director or officer of
the Company, the Beneficial Owner of any securities of the Company that
are Beneficially Owned by any other director or officer of the Company.
For all purposes of this Agreement, the phrase "then
outstanding," when used with reference to the percentage of the then
outstanding securities Beneficially Owned by a Person, shall mean the
number of securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding
which such Person would be deemed to Beneficially Own hereunder.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the States of
California or New Jersey are authorized or obligated by law or
executive order to close.
(f) "Charter or articles supplementary" when used in reference
to the Company shall mean the Charter or articles supplementary, as may
be amended from time to time, of the Company.
(g) "Close of Business" on any given date shall mean 5:00 p.m.,
San Francisco, California time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 p.m., San
Francisco, California time, on the next succeeding Business Day.
(h) "Common Stock" when used in reference to the Company shall
mean the common stock, par value $0.01 per share, of the Company or any
other shares of capital stock of the Company into which such stock
shall be reclassified or changed, and after the automatic conversion of
all Preferred Stock to Common Stock as of September 1, 2004, Common
Stock shall include all issued and outstanding shares of Preferred
Stock and authorized but unissued shares of Preferred Stock that have
automatically converted to Common Stock on such date. "Common Stock"
when used with reference to any Person other than the Company organized
in corporate form shall mean (i) the capital stock or other equity
interest of such Person with the greatest voting power, (ii) the equity
securities or other equity interest having power to control or direct
the management of such Person or (iii) if such Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person and which have issued any such outstanding
capital stock, equity securities or equity interest. "Common Stock"
when used with reference to any Person not organized in corporate form
shall mean units of beneficial interest which (x) shall represent the
right to participate generally in the profits and losses of such Person
(including without limitation any flow-through tax benefits resulting
from an ownership interest in such Person) and (y) shall be entitled to
exercise the greatest voting power of such Person or, in the case of a
limited partnership, shall have the power to remove or otherwise
replace the general partner or partners.
(i) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(k) "Depositary Agent" shall have the meaning set forth in
Section 7(c) hereof.
4
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Exchange Date" shall have the meaning set forth in Section
7(a) hereof.
(n) "Exempt Person" shall have the meaning set forth in the
definition of "Acquiring Person."
(o) "Exercise Price" shall have the meaning set forth in
Section 4(a) hereof.
(p) "Expiration Date" and "Final Expiration Date" shall have
the meanings set forth in Section 7(a) hereof.
(q) "Fair Market Value" of any securities or other property
shall be as determined in accordance with Section 11(d) hereof.
(r) "Grandfathered Percentage" shall mean the percentage of the
outstanding shares of Common Stock of the Company that a Grandfathered
Person, together with all Affiliates and Associates of such
Grandfathered Person, Beneficially Owns as of the Grandfathered Time,
plus an additional 1/2%; provided, however, that, in the event any
Grandfathered Person shall sell, transfer, or otherwise dispose of any
outstanding shares of Common Stock of the Company after the
Grandfathered Time, the Grandfathered Percentage shall, subsequent to
such sale, transfer or disposition, mean, with respect to such
Grandfathered Person, the lesser of (i) the Grandfathered Percentage as
in effect immediately prior to such sale, transfer or disposition or
(ii) the percentage of outstanding shares of Common Stock of the
Company that such Grandfathered Person Beneficially Owns immediately
following such sale, transfer or disposition, plus an additional 1/2%.
(s) "Grandfathered Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, is, as of
the Grandfathered Time, the Beneficial Owner of 15% or more of the
shares of Common Stock of the Company then outstanding. Notwithstanding
anything to the contrary provided in this Agreement, any Grandfathered
Person who after the Grandfathered Time becomes the Beneficial Owner of
less than 15% of the shares of Common Stock of the Company then
outstanding shall cease to be a Grandfathered Person and shall be
subject to all of the provisions of this Agreement in the same manner
as any Person who is not and was not a Grandfathered Person.
(t) "Grandfathered Time" shall mean 11:00 a.m., San Francisco
time, on July 1, 2004.
(u) "Group" shall have the meaning set forth in clause (b) of
the definition of "Person."
(v) "Person" shall mean (a) an individual, a corporation, a
partnership, a limited liability company, an association, a joint stock
company, a trust, a business trust, a government or political
subdivision, any unincorporated organization, or any other association
or entity including any successor (by merger or otherwise) thereof or
thereto, and (b) a "group" as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.
(w) "Preferred Stock" shall mean the Class A Convertible
Preferred Stock, par value $0.01 per share, of the Company or any other
shares of capital stock of the Company into which such stock shall be
reclassified or changed, including the shares of Common Stock into
which the Preferred Stock shall be automatically converted on September
1, 2004.
(x) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
5
(y) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(z) "Redemption Price" shall have the meaning set forth in
Section 23 hereof.
(aa) "Registered Common Stock" shall have the meaning set forth
in Section 13(b) hereof.
(bb) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(cc) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(dd) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ee) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(ff) "Section 24(a)(i) Exchange Ratio" shall have the meaning
set forth in Section 24(a)(i) hereof.
(gg) "Section 24(a)(ii) Exchange Ratio" shall have the meaning
set forth in Section 24(a)(ii) hereof.
(hh) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ii) "Stock Acquisition Date" shall mean the date of the first
public announcement (which for purposes of this definition shall
include, without limitation, the issuance of a press release or the
filing of a publicly-available report or other document with the
Securities and Exchange Commission or any other governmental agency) by
the Company, acting pursuant to a resolution adopted by the Board of
Directors of the Company, or by an Acquiring Person, subject in each
case to the last paragraph of Section 1(a), that an Acquiring Person
has become an Acquiring Person.
(jj) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions of such corporation or other
entity are at the time directly or indirectly Beneficially Owned or
otherwise controlled by such Person either alone or together with one
or more Affiliates of such Person.
(kk) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ll) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and any Co-Rights Agents shall
be as the Company shall determine. The Company shall give ten (10) days' prior
written notice to the Rights Agent of the appointment of one or more Co-Rights
Agents and the respective duties of the Rights Agent and any such Co-Rights
Agents. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.
6
Section 3. Issue of Right Certificates.
(a) From the date hereof until the earlier of (i) the Close of
Business on the tenth calendar day after the Stock Acquisition Date or
(ii) the Close of Business on the tenth Business Day (or such later
calendar day, if any, as the Board of Directors of the Company may
determine in its sole discretion) after the date a tender or exchange
offer by any Person, other than an Exempt Person, is first published or
sent or given within the meaning of Rule 14d-4(a) of the Exchange Act,
or any successor rule, if, upon consummation thereof, such Person could
become the Beneficial Owner of 15% (or in the case of a Grandfathered
Person, the Grandfathered Percentage applicable to such Grandfathered
Person) or more of the shares of Common Stock or Preferred Stock of the
Company then outstanding (including any such date which is after the
date of this Agreement and prior to the issuance of the Rights) (the
earliest of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for the Common Stock or
Preferred Stock of the Company registered in the names of the holders
of the Common Stock or Preferred Stock of the Company (which
certificates for Common Stock or Preferred Stock of the Company shall
be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
or Preferred Stock of the Company. 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 so requested by written notice, and
provided with a shareholder list and all other relevant information
which the Rights Agent may request, send) by first-class,insured,
postage prepaid mail, to each record holder of the Common Stock and
Preferred Stock of the Company as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records
of the Company, one or more certificates, in substantially the form of
Exhibit A hereto (the "Right Certificates"), evidencing one Right for
each share of Common Stock or Preferred Stock of the Company so held,
subject to adjustment as provided herein. As of and after the Close of
Business on the Distribution Date, the Rights will be evidenced solely
by such Right Certificates. In the event that an adjustment in the
number of Rights per Common Share has been made pursuant to Section 11
hereof, then at the time of distribution of the Right Certificates, the
Company shall make the necessary and appropriate rounding adjustments
(in accordance with Section 14(a) hereof) so that Right Certificates
representing only whole numbers of Rights are distributed and cash is
paid in lieu of any fractional Rights. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates and may be
transferred by the transfer of the Rights Certificates as permitted
hereby, separately and apart from any transfer of Common Shares, and
the holders of such Right Certificates as listed in the records of the
Company or any transfer agent or registrar for the Rights shall be the
record holders thereof. The Company shall promptly notify the Rights
Agent in writing upon the occurrence of the Distribution Date. Until
such notice is received by the Rights Agent, the Rights Agent may
presume conclusively for all purposes that the Distribution Date has
not occurred.
(b) With respect to certificates for the Common Stock or
Preferred Stock of the Company issued prior to the Close of Business on
the Record Date, the Rights will be evidenced by such certificates for
the Common Stock or Preferred Stock of the Company on or until the
Distribution Date (or the earlier redemption, expiration or termination
of the Rights), and the registered holders of the Common Stock and
Preferred Stock of the Company also shall be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier
redemption, expiration or termination of the Rights), the transfer of
any of the certificates for the Common Stock or Preferred Stock of the
Company outstanding prior to the date of this Agreement shall also
constitute the transfer of the Rights associated with the Common Stock
or Preferred Stock of the Company represented by such certificate.
(c) Certificates for the Common Stock or Preferred Stock of the
Company issued after the Record Date, but prior to the earliest of the
7
Distribution Date, Redemption Date, Exchange Date or Final Expiration
Date, shall be deemed also to be certificates for Rights, and shall
bear a legend, substantially in the form set forth below:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Shareholder Rights
Agreement between BellaVista Capital, Inc. and Mellon Investor
Services LLC (or any successor thereto), as Rights Agent,
dated as of July 19, 2004 as amended, restated, renewed,
supplemented or extended 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
offices of BellaVista Capital, Inc. and the designated office
of the Rights Agent. 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. BellaVista Capital, Inc. may redeem the Rights at
a redemption price of $0.01 per Right, subject to adjustment,
under the terms of the Rights Agreement. BellaVista Capital,
Inc. will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to or held by
Acquiring Persons or any Affiliates or Associates thereof (as
defined in the Rights Agreement), and any subsequent holder of
such Rights, may become null and void. The Rights shall not be
exercisable, and shall be void so long as held, by a holder in
any jurisdiction where the requisite qualification, if any, to
the issuance to such holder, or the exercise by such holder,
of the Rights in such jurisdiction shall not have been
obtained or be obtainable without unreasonable effort or
expense.
With respect to such certificates containing the foregoing
legend, the Rights associated with the Common Stock or Preferred Stock
of the Company represented by such certificates shall be evidenced by
such certificates alone until the earliest of the Distribution Date,
Redemption Date, Exchange Date or Final Expiration Date, and the
transfer of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock or Preferred Stock of
the Company represented by such certificates. In the event that the
Company purchases or acquires any shares of Common Stock or Preferred
Stock of the Company after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock or
Preferred Stock of the Company shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights
associated with the shares of Common Stock or Preferred Stock of the
Company which are no longer outstanding. The failure to print the
foregoing legend on any such certificate representing Common Stock or
Preferred Stock of the Company or any defect therein shall not affect
in any manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment and certificate to be printed on the
reverse thereof) shall each be substantially in the form of Exhibit A
hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company
may deem appropriate (but which do not affect the rights, duties,
liabilities and obligations of the Rights Agent as set forth in this
Agreement) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law,
rule or regulation or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
customary usage. The Right Certificates shall be in a machine printable
format and in a form reasonably satisfactory to the Rights Agent.
Subject to the provisions of Section 11 and Section 22 hereof, the
Right Certificates, whenever distributed, shall be dated as of the
Record Date (or in the case of Rights issued with respect to Common
Shares issued by the Company after the Record Date, as of the date of
issuance of such Common Shares), shall show the date of
countersignature, and on their face shall entitle the holders thereof
to purchase such number of shares of Common Stock of the Company as
8
shall be set forth therein at the price set forth therein (the
"Exercise Price"), but the number of such shares and the Exercise Price
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights Beneficially Owned by (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any Associate or
Affiliate of an Acquiring Person) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred
Rights, the shares of Common Stock of the Company associated with such
Rights or the Company or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
Section 7(e) hereof, and provided that the Company shall have notified
the Rights Agent that this Section 4(b) applied, any Right Certificate
issued pursuant to Section 6, Section 11 or Section 22 upon transfer,
exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall have deleted therefrom the second
sentence of the existing legend on such Right Certificate and in
substitution therefor shall contain the following legend:
The Rights represented by this Right Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the Rights
represented hereby may become null and void under certain circumstances
as specified in Section 7(e) of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person or any
Associate or Affiliate thereof. The Company shall instruct the Rights Agent in
writing of the Rights which should be so legended. The failure to print the
foregoing legend on any such Right Certificate or any defect therein shall not
affect in any manner whatsoever the application or interpretation of the
provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board of Directors, or its President or
any Vice President and by its Treasurer or any Assistant Treasurer, or
by its Secretary or any Assistant Secretary, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal
or a facsimile thereof which shall be attested to by the Secretary or
any Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by an
authorized signatory of the Rights Agent and shall not be valid for any
purpose unless so countersigned, and such countersignature upon any
Right Certificate shall be conclusive evidence, and the only evidence,
that such Right Certificate has been duly countersigned as required
hereunder. 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 an authorized signatory of 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 Certificates may be
signed on behalf of the Company by any Person who, at the actual date
of the execution of such Right Certificate, shall be a proper officer
of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an
officer.
9
(b) Following the Distribution Date and receipt by the Rights
Agent of the notice referred to in Section 7(e)and list of record
holders of Rights, the Rights Agent will keep or cause to be kept, at
one of its offices designated as the appropriate place for surrender of
Right Certificates upon exercise or transfer, 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 Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Right Certificate or Certificates (other than
Rights Certificates representing Rights and that have become null and
void pursuant to Section 7(e) hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of
Common Stock of the Company (or following a Triggering Event, Common
Stock of the Company, cash, property, debt securities, Preferred Stock
or any combination thereof, including any such securities, cash or
property following a Section 13 event) as the Right Certificate or
Certificates surrendered then entitled such holder to purchase and at
the same Exercise Price. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Certificates
shall make such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of
assignment and certificate duly executed, at the office or offices of
the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Right Certificate or
Certificates, as the case may be, as so requested. The Company may
require payment by the registered holder of a Right Certificate, of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates. The Rights Agent shall have no duty or
obligation to take any action under any Section of this Agreement which
requires the payment by a Rights holder of applicable taxes or
governmental charges unless and until the Rights Agent is satisfied
that all such taxes and/or charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security satisfactory to them,
and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate, if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
10
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the office or offices of
the Rights Agent designated for such purpose, together with payment of
the aggregate Exercise Price for the total number of shares of Common
Stock of the Company (or other securities, cash or other assets, as the
case may be) as to which such surrendered Rights are then exercised, at
or prior to the earlier of (i) the Close of Business on the tenth
anniversary of the Record Date (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 (the "Exchange Date") (the
earliest of (i), (ii) or (iii) being herein referred to as the
"Expiration Date"). Except as set forth in Section 7(e) hereof and
notwithstanding any other provision of this Agreement, any Person who
prior to the Distribution Date becomes a record holder of shares of
Common Stock of the Company may exercise all of the rights of a
registered holder of a Right Certificate with respect to the Rights
associated with such shares of Common Stock of the Company in
accordance with the provisions of this Agreement, as of the date such
Person becomes a record holder of shares of Common Stock of the
Company.
(b) The Exercise Price for each share of Common Stock of the
Company pursuant to the exercise of a Right shall initially be ten
United States Dollars (U.S. $10.00), shall be subject to adjustment
from time to time as provided in Section 11 and Section 13 hereof and
shall be payable in lawful money of the United States of America in
accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, accompanied by
payment of the Exercise Price for the shares to be purchased and an
amount equal to any applicable transfer tax (as determined by the
Rights Agent) by certified check or bank draft payable to the order of
the Company or by money order, the Rights Agent shall, subject to
Section 20(k) and Section 14(b) hereof, thereupon promptly (i)
requisition from any transfer agent for the Common Stock of the Company
(the "Depositary Agent") (or make available, if the Rights Agent is the
transfer agent for the Common Stock of the Company) depositary receipts
or certificates for the number of shares of Common Stock of the Company
to be purchased and the Company hereby irrevocably authorizes the
Depositary Agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if any,
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 of such certificate or depositary receipts
promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is
obligated to issue other securities (including Common Stock) of the
Company, pay cash or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash or other property are available for
distribution by the Rights Agent, if and when necessary to comply with
this Agreement. The payment of the Exercise Price may be made by
certified or bank check payable to the order of the Company, or by
money order or wire transfer of immediately available funds to the
account of the Company (provided that prior written notice of such wire
transfer shall be given by the holder of the related Right to the
Rights Agent).
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
11
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Sections 6 and 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event or
Section 13 Event, any Rights Beneficially Owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any Associate or Affiliate of
an Acquiring Person) who becomes a transferee after the Acquiring
Person becomes such or (iii) a transferee of an Acquiring Person (or of
any Associate or Affiliate of an Acquiring Person) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights, the shares of Common
Stock of the Company associated with such Rights or the Company, or (B)
a transfer which the Board of Directors of the Company has determined
is part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall notify the
Rights Agent when this Section 7(e) applies and shall use all
reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but neither the Company nor
the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the Company's failure to
make any determinations with respect to an Acquiring Person or any
Affiliates or Associates of an Acquiring Person or any transferee of
any of them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon
the occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) properly completed and
signed the certificate contained in the form of election to purchase
set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent
shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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 all such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that on and after the
Distribution Date, it will use reasonable efforts to cause to be
reserved and kept available, out of its authorized and unissued shares
of Common Stock, the number of shares of Common Stock that, except as
provided in Section 11(a)(iii) hereof, would then be sufficient to
permit the exercise in full of all outstanding Rights; provided,
however, that the reservation of such shares shall be subject and
subordinate to any other reservation of shares of Common Stock of the
Company made by the Company at any time for any lawful purpose; and
further provided, however, that in no event shall such failure to so
reserve shares affect the rights of any holder of Rights hereunder.
12
(b) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Common
Stock of the Company issued or reserved for issuance to be listed, upon
official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock of the Company is listed
or, if the principal market for the Common Stock of the Company is not
on any national securities exchange, to be eligible for quotation on
the system, if any, which does constitute the principal market for the
Common Stock.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, or as soon as required by
law following the Distribution Date, as the case may be, a registration
statement under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement
to become effective as soon as practicable after such filing and (iii)
cause such registration statement to remain effective (with a
prospectus that at all times meets the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities or (B) the Expiration Date. The
Company will also take such action as may be appropriate under, and
which will ensure compliance with, the securities or "blue sky" laws of
the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date determined in accordance with the
provisions of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon 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, in each case with prompt written notice to the Rights
Agent. Notwithstanding any such 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.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock
(and, following the occurrence of a Triggering Event, shares of Common
Stock and/or other securities) of the Company delivered upon the
exercise of the Rights shall, at the time of delivery of the
certificates or depositary receipts for such shares (subject to payment
of the Exercise Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all taxes and governmental charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any certificates for shares of Common Stock of the
Company and/or other consideration upon the exercise of Rights. The
Company shall not, however, be required to pay any tax or charge which
may be payable in respect of any transfer or delivery of Right
Certificates or the issuance or delivery of certificates for any shares
of Common Stock of the Company and/or other consideration to a Person
other than, or in respect of the issuance or delivery of securities in
a name other than that of, the registered holder of the Right
Certificates evidencing Rights surrendered for exercise or to issue or
deliver any certificates for securities in a name other than that of
the registered holder upon the exercise of any Rights until such tax or
charge shall have been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax
or charge is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for any shares of Common Stock of the Company (or other securities)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such shares of Common Stock of the Company (or
such other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
13
such Rights was duly surrendered and payment of the Exercise Price (and any
applicable taxes and governmental charges) was made; provided, however, that if
the date of such surrender and payment is a date upon which the transfer books
for the Common Stock of the Company (or, if applicable, such other securities)
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 such transfer books are open; and further provided, however, that if
delivery of shares of Common Stock of the Company (or, if applicable, other
securities) is delayed pursuant to Section 9(c), such Person shall be deemed to
have become the record holder of such shares of Common Stock of the Company (or,
if applicable, such other securities) only when such shares first become
deliverable. Prior to the exercise of the Right evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind of Shares or
Number of Rights. The Exercise Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common
Stock of the Company payable in shares of Common Stock of the
Company, (B) subdivide the outstanding Common Stock of the
Company, (C) combine the outstanding Common Stock of the
Company into a smaller number of shares or (D) issue, change
or alter any shares of its capital stock in a reclassification
or recapitalization (including any such reclassification or
recapitalization in connection with a consolidation or merger
in which the Company is the continuing or surviving Person),
except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Exercise Price in effect at the time of the
record date for such dividend or the effective time of such
subdivision, combination, reclassification or
recapitalization, and the number and kind of shares of capital
stock issuable at such time, 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 time at the Exercise Price
then in effect and at a time when the transfer books for such
capital stock were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, reclassification or
recapitalization; provided, however, that in no event shall
the consideration to be paid upon the exercise of a Right be
less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of a Right. If an
event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24 hereof,
in the event any Person, alone or together with its Affiliates
and Associates, shall become an Acquiring Person, then,
promptly following any such occurrence (a "Section 11(a)(ii)
Event"), proper provision shall be made so that each holder of
a Right, except as provided in Section 7(e) hereof, shall
thereafter have a right to receive, upon exercise thereof at
the then current Exercise Price in accordance with the terms
of this Agreement, such number of shares of Common Stock of
the Company as shall equal the result obtained by (x)
multiplying the then current Exercise Price by the then number
of shares of Common Stock of the Company for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and dividing that product by (y) 50% of the Fair
Market Value per share of Common Stock of the Company
(determined pursuant to Section 11(d)) on the date of the
14
occurrence of a Section 11(a)(ii) Event (such number of shares
being referred to as the "Adjustment Shares").
(iii) In lieu of issuing any shares of Common Stock of
the Company in accordance with Section 11(a)(ii) hereof, the
Company, acting by or pursuant to a resolution of the Board of
Directors of the Company, may, and in the event that the
number of shares of Common Stock of the Company which are
authorized by the Company's charter or articles supplementary
but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by or pursuant to a resolution of the Board of
Directors of the Company, shall take such action as may be
necessary to authorize additional shares of Common Stock of
the Company for issuance upon exercise of the Rights. In the
event that the Company shall, after good faith effort, be
unable to take such actions as may be necessary to authorize
such additional shares of Common Stock of the Company, the
Company, acting by or pursuant to a resolution of the Board of
Directors of the Company, shall: (A) determine the excess of
(X) the Fair Market Value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") over (Y)
the Exercise Price attributable to each Right (such excess
being referred to as the "Spread") and (B) with respect to all
or a portion of each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Exercise Price, (1)
Common Stock of the Company or other equity securities, if
any, of the Company (including without limitation shares, or
units of shares, of Preferred Stock that the Board of
Directors of the Company has determined to have the same value
as shares of Common Stock of the Company (such shares of
equity securities being referred to herein as "Common Stock
Equivalents")), to the extent permitted by the Company's
charter or articles supplementary, (2) cash, (3) a reduction
in the Exercise Price, (4) debt securities of the Company, (5)
other assets or securities of the Company or (6) any
combination of the foregoing having an aggregate value equal
to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company after
receiving advice of a nationally recognized investment banking
firm selected by the Board of Directors of the Company;
provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the
Exercise Price, shares of Common Stock of the Company (to the
extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If
the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of
Common Stock of the Company could be authorized for issuance
upon exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such period,
as it may be extended, being referred to herein as the
"Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended (with prompt written notice thereof
to the Rights Agent) and a public announcement at such time as
15
the suspension is no longer in effect (with prompt written
notice thereof to the Rights Agent). For purposes of this
Section 11(a)(iii), the value of the Common Stock of the
Company shall be the Fair Market Value (as determined pursuant
to Section 11(d) hereof) per share of the Common Stock of the
Company on the Section 11(a)(ii) Trigger Date and the value of
any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock of the Company on such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock of the
Company entitling them (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or purchase
shares of Common Stock of the Company or Common Stock Equivalents, or
securities convertible into shares of Common Stock of the Company or
Common Stock Equivalents, at a price per share of Common Stock of the
Company or per share of Common Stock Equivalents (or having a
conversion price per share, if a security convertible into Common Stock
of the Company or Common Stock Equivalents) less than the Fair Market
Value (as determined pursuant to Section 11(d) hereof) per share of
Common Stock of the Company Stock on such record date, the Exercise
Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number
of shares of Common Stock of the Company outstanding on such record
date, plus the number of shares of Common Stock of the Company that the
aggregate offering price of the total number of shares of Common Stock
of the Company and/or Common Stock Equivalents to be offered (and the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such Fair Market Value, and the
denominator of which shall be the number of shares of Common Stock of
the Company outstanding on such record date, plus the number of
additional shares of Common Stock of the Company and/or Common Stock
Equivalents 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 a Right be less than the aggregate par value of
the shares of stock of the Company issuable upon exercise of a 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 the Fair Market Value thereof determined in
accordance with Section 11(d) hereof and shall be described in a
written statement filed with the Rights Agent. Shares of Common Stock
of the Company owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustments shall be made successively whenever such a record date is
fixed; and in the event that such rights or warrants are not so issued,
the Exercise Price shall be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock of the Company (including
any such distribution made in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), of
evidences of indebtedness, cash (other than a regular periodic cash
dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Common Stock of the Company,
but including any dividend payable in stock other than Common Stock of
the Company) or convertible securities, subscription rights or warrants
(excluding those referred to in Section 11(b)), the Exercise Price to
be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof and described in a written
statement filed with the Rights Agent) per share of Common Stock of the
Company on such record date, less the Fair Market Value (as determined
pursuant to Section 11(d) hereof) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such convertible
securities, subscription rights or warrants distributable in respect of
a share of Common Stock of the Company, and the denominator of which
shall be the Fair Market Value (as determined pursuant to Section 11(d)
hereof) per share of Common Stock of the Company on such record date;
16
provided, however, that in no event shall the consideration to be paid
upon the exercise of a Right be less than the aggregate par value of
the shares of stock of the Company issuable upon exercise of a 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
Exercise Price shall again be adjusted to be the Exercise Price which
would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value"
of any share of Common Stock or any other class of stock or any Right
or other security or any other property shall be determined as provided
in this Section 11(d).
(i) In the case of a publicly-traded stock or other
security, the Fair Market Value on any date shall be deemed to
be the average of the daily closing prices per share of such
stock or per unit of such other security for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to but not including such date; provided,
however, that in the event that the Fair Market Value per
share of any share of stock is determined during a period
following the announcement by the issuer of such stock of (x)
a dividend or distribution on such stock payable in shares of
such stock or securities convertible into shares of such stock
or (y) any subdivision, combination or reclassification of
such stock, and prior to the expiration of the 30 Trading Day
period after but not including 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 Fair Market Value shall be properly
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the
securities are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which such
security is listed or admitted to trading; or, if not listed
or admitted to trading on any national securities exchange,
the last quoted price (or, if not so quoted, the average of
the last quoted 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 no bids for such
security are 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 such security
selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in such security,
the Fair Market Value of such security on such date shall be
determined reasonably and with utmost good faith to the
holders of the Rights by the Board of Directors of the
Company, provided, however, that if at the time of such
determination there is an Acquiring Person, the Fair Market
Value of such security on such date shall be determined by a
nationally recognized investment banking firm selected by the
Board of Directors of the Company, which determination shall
be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the
Rights. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which such security
is listed or admitted to trading is open for the transaction
of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) If a security is not publicly held or not so
listed or traded, "Fair Market Value" shall mean the fair
value per share of stock or per other unit of such security,
determined reasonably and in good faith to the holders of the
Rights by the Board of Directors of the Company; provided,
however, that if at the time of such determination there is an
Acquiring Person, the Fair Market Value of such security on
such date shall be determined by a nationally recognized
investment banking firm or other independent third party
expert - selected by the Board of Directors of the Company,
17
which determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights.
(iii) In the case of property other than securities,
the Fair Market Value thereof shall be determined reasonably
and in good faith to the holders of Rights by the Board of
Directors of the Company; provided, however, that if at the
time of such determination there is an Acquiring Person, the
Fair Market Value of such property on such date shall be
determined by a nationally recognized investment banking firm
or other independent third party expert selected by the Board
of Directors of the Company, which determination shall be
described in a statement filed with the Rights Agent and shall
be binding upon the Rights Agent and the holders of the
Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Exercise 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 hundred-thousandth of a share of Common Stock or to
such other figure as the Board of Directors of the Company may deem
appropriate. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a) or Section
13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Common Stock of the Company, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock of the Company contained in Section 11(a), (b), (c), (d), (e),
(g) through (m), inclusive, and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to the Common Stock of the Company 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 Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of shares
of Common Stock of the Company (or other securities or amount of cash
or combination thereof) 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 Exercise Price
as a result of the calculations made in Section 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares of Common Stock of the Company
(calculated to the nearest one hundred-thousandth of a share) as the
Board of Directors of the Company determines is appropriate to preserve
the economic value of the Rights, including, by way of example, that
number obtained by (i) multiplying (x) the number of shares of Common
Stock of the Company for which a Right may be exercisable immediately
prior to this adjustment by (y) the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any
adjustment of the Exercise Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Common Stock
of the Company purchasable upon the exercise of a Right. Each of the
Rights outstanding after the adjustment in the number of Rights shall
be exercisable for the number of shares of Common Stock of the Company
18
for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one ten-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise
Price in effect immediately after adjustment of the Exercise Price. The
Company shall make a public announcement of its election to adjust the
number of Rights (with prompt written notice thereof to the Rights
Agent), indicating the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made. This record date may
be the date on which the Exercise Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement.
If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Common Stock of the Company issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Exercise Price per share
and the number of shares which were expressed in the initial Right
Certificates issued hereunder without prejudice to any adjustment or
change.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below the then stated value, if any, of the
number of shares of Common Stock of the Company issuable upon exercise
of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable shares of
Common Stock of the Company at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date
for a specified event, the Company may elect (with prompt written
notice of such election to the Rights Agent) to defer until the
occurrence of such event the issuing to the holder of any Right
exercised after such record date the number of shares of Common Stock
of the Company or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the number of shares of
Common Stock of the Company and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Exercise Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in its good
faith judgment the Board of Directors of the Company shall determine to
be advisable in order that any consolidation or subdivision of the
Common Stock of the Company, issuance wholly for cash of any shares of
Common Stock of the Company at less than the Fair Market Value,
issuance wholly for cash of shares of Common Stock of the Company or
securities which by their terms are convertible into or exchangeable
for shares of Common Stock of the Company, stock dividends or issuance
19
of rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of Common Stock of the
Company, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not
been redeemed pursuant to Section 23 hereof or exchanged pursuant to
Section 24 hereof, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning power of
the Company and its Subsidiaries taken as a whole, to any other Person
or Persons if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments outstanding or agreements or arrangements in effect which
would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale the
shareholders of a Person who constitutes, or would constitute, the
"Principal Party" for the purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates; provided, however, that, subject
to the following sentence, this Section 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, or merge
with or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company. The Company further covenants and agrees
that after the Distribution Date it will not, except as permitted by
Section 23 or Section 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) Notwithstanding anything to the contrary set forth herein,
in the event that the Company declares a dividend per share (whether
cash, securities, rights or other distribution) in respect of the
Common Stock of the Company for holders as of a record date and if
Rights become exercisable (automatically or otherwise) and are
exercised after the date of such declaration but prior to such record
date, the aggregate amount (or number of securities or other rights) of
such dividend shall remain the same and the per share dividend shall be
reduced to reflect the increased number of shares of Common Stock of
the Company outstanding following such exercise of Rights.
(p) In the event that the Rights become exercisable following a
Section 11(a)(ii) Event, the Company, by action of the Board of
Directors (and with prompt written notice thereof to the Rights Agent),
may permit the Rights, subject to Section 7(e), to be exercised for 50%
of the shares of Common Stock of the Company (or cash, other securities
or property) that would otherwise be purchasable under Section 11(a),
in consideration of the surrender to the Company of the Rights so
exercised and without other payment of the Exercise Price. Rights
exercised under this Section 11(p) shall be deemed to have been
exercised in full and shall be canceled.
(q) The exercise (or, pursuant to Section 24, exchange) of
Rights under Section 11(a)(ii) shall only result in the loss of rights
under Section 11(a)(ii) to the extent so exercised and shall not
otherwise affect the rights of holders of Right Certificates under this
Rights Agreement, including rights to purchase securities of the
Principal Party following a Section 13 Event which has occurred or may
thereafter occur, as set forth in Section 13 hereof. Upon exercise of a
Right Certificate under Section 11(a)(ii), the Rights Agent shall
return such Right Certificate duly marked to indicate that such
exercise has occurred.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made or any event affecting the Rights or their
exercisability (including without limitation, an event which causes Rights to
become null and void) occurs as provided in Section 11 or Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts and calculations accounting for such
adjustment or describing such event, (b) promptly file with the Rights Agent and
with each transfer agent for the Common Stock of the Company a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
20
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock of the Company) in accordance
with Section 26 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment or statement contained therein and
shall have no duty or liability with respect to and shall not be deemed to have
knowledge of any such adjustment or event unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which is not prohibited by Section 11(n)
hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than
a Subsidiary of the Company in a transaction which is not prohibited by
the proviso at the end of the first sentence of Section 11(n) hereof)
shall consolidate with the Company, or 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
shares of Common Stock of the Company shall be changed into or
exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell, mortgage or
otherwise transfer (or one or more of its Subsidiaries shall sell,
mortgage or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 50% or more
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions,
each of which is not prohibited by the proviso at the end of the first
sentence of Section 11(n) hereof), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall have the right to receive, upon
the exercise thereof at the then current Exercise Price in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid and nonassessable shares of freely tradable Common
Stock of the Principal Party (as hereinafter defined in Section 13(b)),
free and clear of rights of call or first refusal, liens, encumbrances,
transfer restrictions or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Exercise Price by
the number of shares of Common Stock of the Company for which a Right
is exercisable immediately prior to the first occurrence of a Section
13 Event (without taking into account any adjustment previously made
pursuant to Section 11(a)(ii) or 11(a)(iii) hereof), and dividing that
product by (2) 50% of the Fair Market Value (determined pursuant to
Section 11(d) hereof) per share of the Common Stock of such Principal
Party on the date of consummation of such consolidation, merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale,
mortgage or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter
be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such
Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock to permit exercise of all outstanding
Rights in accordance with this Section 13(a) and the making of payments
in cash and/or other securities in accordance with Section 11(a)(iii)
hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer of Common Stock that has the highest aggregate Fair
Market Value (determined pursuant to Section 11(d)), and if no
securities are so issued, the Person that is the other party
21
to the merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the
highest aggregate Fair Market Value (determined pursuant to
Section 11(d)); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such
transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the
highest aggregate Fair Market Value (determined pursuant to
Section 11(d)); provided, however, that in any such case
described in clauses (i) or (ii) of Section 13(b) hereof, (1)
if the Common Stock of such Person is not at such time and has
not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act ("Registered
Common Stock") or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary or Affiliate of
another Person who has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the
Common Stock of such Person is not Registered Common Stock or
such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person but is not a direct
or indirect Subsidiary of another Person which has Registered
Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such first-mentioned Person; (3) if
the Common Stock of such Person is not Registered Common Stock
or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of
such other Persons is the issuer of the Registered Common
Stock having the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or
indirectly controlled by more than one Person, and none of
such other Persons has Registered Common Stock outstanding,
"Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest shareholders'
equity or, if no such ultimate parent entity is a corporation,
"Principal Party" shall refer to whichever ultimate parent
entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto (x) the Principal Party
shall have a sufficient number of authorized shares of its Common
Stock, which have not been issued or reserved for issuance, to permit
the exercise in full of the Rights in accordance with this Section 13,
and (y) the Company and each Principal Party and each other Person who
may become a Principal Party as a result of such consolidation, merger,
sale or transfer shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in Section
13(a) and (b) and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer of assets
mentioned in Section 13(a), the Principal Party at its own expense
will:
(i) prepare and file a registration statement under
the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, cause such registration statement to become
effective as soon as practicable after such filing and cause
such registration statement to remain effective (with a
prospectus that at all times meets the requirements of the
Securities Act) until the Expiration Date;
(ii) qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or
appropriate;
22
(iii) list (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of
its authorized securities or in its charter or articles supplementary
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 of
such Principal Party at less than the then current Fair Market Value
(determined pursuant to Section 11(d)) or securities exercisable for,
or convertible into, Common Stock of such Principal Party at less than
such Fair Market Value, or (ii) providing for any special payment, tax
or similar provisions in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of this
Section 13, then, in such event, the Company 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.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(o) hereof, or to distribute Right Certificates which evidence
fractional Rights. If the Company elects not to issue such fractional
Rights, the Company shall pay, in lieu of such fractional Rights, 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 Fair Market Value of a whole Right,
as determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Common Stock of the Company upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common
Stock of the Company. In lieu of fractional shares of Common Stock of
the Company, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the Fair Market Value
of one share of Common Stock of the Company. For purposes of this
Section 14(b), the Fair Market Value of one share of Common Stock of
the Company shall be determined pursuant to Section 11(d) hereof for
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
(d) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i)
promptly prepare and deliver to the Rights Agent a certificate setting
forth in reasonable detail the facts related to such payments and the
23
prices and/or formulas utilized in calculating such payments, and (ii)
provide sufficient monies to the Rights Agent in the form of fully
collected funds to make such payments. The Rights Agent shall be fully
protected in relying upon such a certificate and shall have no duty
with respect to, and shall not be deemed to have knowledge of any
payment for fractional Rights or fractional shares under any Section of
this Agreement relating to the payment of fractional Rights or
fractional shares unless and until the Rights Agent shall have received
such a certificate and sufficient monies.
Section 15. Rights of Action.
(a) All rights of action in respect of this Agreement, other
than rights of action vested in the Rights Agent pursuant to Sections
18 and 20 hereof, are vested in the respective registered holders of
the Right Certificates (or, prior to the Distribution Date, the
registered holders of the Common Stock of the Company); and any
registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock of the Company), 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 of
the Company), may, in such registered holder's own behalf and for such
registered holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the Right
evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement. Holders of Rights shall be
entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the
provisions of this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, judgment, decree or
ruling (whether interlocutory or final) issued by a court or by a
governmental, regulatory, self-regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided,
however, that the Company must use all reasonable efforts to have any
such injunction, order, judgment, decree or ruling lifted or otherwise
overturned as soon as possible.
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, each Right will be
transferable only simultaneously and together with the transfer of
shares of Common Stock of the Company;
(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 offices of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer;
(c) subject to Sections 6(a) and 7(f), the Company and the
Rights Agent may deem and treat the Person in whose name a Right
Certificate (or, prior to the Distribution Date, the associated
certificate representing Common Stock of the Company) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated certificate representing Common Stock of
the Company made by anyone other than the Company or the Rights Agent)
24
for all purposes whatsoever, and, subject to the last sentence of
Section 7(e), neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as the result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining performance
of such obligations; provided, however, that the Company must use its
best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. 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 shares of Common Stock
of the Company or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to in writing between the Company and
the Rights Agent 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 disbursements and other disbursements incurred in
the preparation, administration, delivery, execution and amendment of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense (including,
without limitation, the reasonable fees and expenses of legal counsel),
incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (which gross negligence, bad faith or
willful misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction), for
any action taken, suffered or omitted by the Rights Agent in connection
with the acceptance exercise, performance or administration of its
duties under this Agreement, including, without limitation, the costs
and expenses of defending against any claim of liability in the
premises. The costs and expenses incurred by the Rights Agent in
enforcing this right of indemnification shall be paid by the Company.
The provisions of this Section 18(a) shall survive the expiration of
the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its acceptance and
administration of this Agreement or the exercise or performance of its
duties hereunder in reliance upon any Right Certificate or certificate
representing Common Stock of the Company or 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 and executed by the proper Person or Persons,
or otherwise upon the advice of counsel as set forth in Section 20
hereof. The Rights Agent shall not be deemed to have knowledge of any
event of which it was supposed to receive notice thereof hereunder, and
the Rights Agent shall be fully protected and shall incur no liability
for failing to take any action in connection therewith, unless and
until it has received such notice.
25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
Person resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any Person
succeeding to the corporate trust or shareholder services business of
the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section
21 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 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 to
perform only the duties and obligations expressly imposed by this Agreement (and
no implied duties or obligations) upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by
it (who may be legal counsel for the Company or any employee of the
Rights Agent), and the advice or opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted by it and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "Fair Market Value") be
proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless
other evidence in respect thereof shall be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the President, a Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or an Assistant Secretary of the
Company and delivered to the Rights Agent. Any such certificate shall
be full and complete authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it 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 gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful
misconduct must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction).
Anything to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, punitive, indirect, consequential or
26
incidental 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. Any and all liability of the
Rights Agent under this Agreement will be limited to the amount of
annual fees paid by the Company to the Rights Agent pursuant to this
Agreement.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for or be
under any responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability of the
Rights (including the Rights becoming null and void pursuant to Section
7(e) hereof) or any adjustment required under the provisions of
Sections 11, 13 or 23(c) hereof or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after receipt by
the Rights Agent of a certificate describing any such adjustment
furnished in accordance with Section 12 describing such change or
adjustment, upon which the Rights Agent may rely), nor shall it be
responsible for any determination by the Board of Directors of the
Company of the Fair Market Value of the Rights or shares of Common
Stock of the Company pursuant to the provisions of Section 14 hereof;
nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of
Common Stock of the Company to be issued pursuant to this Agreement or
any Right Certificate or as to whether or not any shares of Common
Stock of the Company will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept advice or instructions with respect to the performance of its
duties hereunder and certificates delivered pursuant to any provision
hereof from any person believed by the Rights Agent to be the Chairman
of the Board of Directors, the Chief Executive Officer, a Vice
President, the Secretary, an Assistant Secretary, or the Chief
Financial Officer of the Company, and is authorized to apply to such
officers for advice or instructions in connection with its duties, and
such instructions shall be full authorization and protection to the
Rights Agent, and the Rights Agent shall not be liable for any action
taken, suffered or omitted to be taken by itin accordance with
instructions of any such officer or for any delay in acting while
waiting for such 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 or after which
such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken, or suffered or
omitted by, or omission of, the Rights Agent in accordance with a
proposal included in 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, suffering or omitting 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, suffered or
omitted.
27
(h) The Rights Agent and any shareholder, Affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself (through its directors, officers and employees) or by or through
its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, omission, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or any
other Person resulting from any such act, omission, default, neglect or
misconduct, absent gross negligence, bad faith or willful misconduct in
the selection and continued employment thereof (which gross negligence,
or bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of
competent jurisdiction).
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause (1) or clause (2) thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent known by the Rights Agent by first class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Preferred Shares and the Common
Shares by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the incumbent Rights Agent or 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) a Person organized and
doing business under the laws of the United States or of the State of California
(or of any other state of the United States so long as such corporation is
authorized to do business in the State of California), in good standing, which
is authorized under such laws to exercise stock transfer or corporate trust
powers and is subject to supervision or examination by federal or state
authority or (b) an Affiliate of a Person described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; 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 of
the Company, and give notice to the holders of the Right Certificates by any
means reasonably determined by the Company to inform such holders of such
appointment (including without limitation, by including such information in one
or more of the Company's reports to shareholders or reports or filings with the
28
Securities and Exchange Commission). Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by the Board of Directors of the Company to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustments
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
and with the approval of the Board of Directors, at any time prior to
the Close of Business on the earlier of (i) the fifth day following the
Shares Acquisition Date (or such later date as may be determined by
action of the Company's Board of Directors and publicly announced by
the Company) and (ii) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of
$0.01 per Right, appropriately adjusted to reflect any stock dividend
declared or paid, any subdivision or combination of the outstanding
shares of Common Stock of the Company or any similar event occurring
after the date of this Agreement (such redemption price, as adjusted
from time to time, being hereinafter referred to as the "Redemption
Price"). The Rights may be redeemed only until the earlier to occur of
(i) the time at which any Person becomes an Acquiring Person or (ii)
the Final Expiration Date.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights in accordance with
Section 23 hereof, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of
the Board of Directors of the Company ordering the redemption of the
Rights in accordance with Section 23 hereof, the Company shall give
written notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to the Rights
Agent and to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the
Common Stock of the Company. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth
in this Section 23 or Section 24 hereof or in connection with the
purchase of shares of Common Stock of the Company prior to the
Distribution Date.
29
(c) The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock of the Company (based on the Fair Market
Value of the Common Stock of the Company as of the time of redemption)
or any other form of consideration deemed appropriate by the Board of
Directors of the Company.
Section 24. Exchange.
(a) (i) The Board of Directors of the Company may, at its
option, at any time on or after the occurrence of a Section
11(a)(ii) Event, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of
Section 7(e) hereof) for shares of Common Stock of the Company
at an exchange ratio of one share of Common Stock of the
Company per Right (or a lesser ratio as determined by the
Board of Directors of the Company, if the Company does not
have sufficient authorized and unreserved shares of Common
Stock of the Company), appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter
referred to as the "Section 24(a)(i) Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock of the
Company.
(ii) Notwithstanding the foregoing, the Board of
Directors of the Company may, at its option, at any time on or
after the occurrence of a Section 11(a)(ii) Event, exchange
all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become null and void
pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock of the Company at an exchange ratio specified
in the following sentence (or a lesser ratio as determined by
the Board of Directors of the Company, if the Company does not
have sufficient authorized and unreserved shares of Common
Stock of the Company), as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction
occurring after the date of this Agreement. Subject to the
adjustment described in the foregoing sentence, each Right may
be exchanged for that number of shares of Common Stock of the
Company obtained by dividing the Spread (as defined in Section
11(a)(iii)) by the then Fair Market Value of one share of
Common Stock of the Company on the earlier of (x) the date on
which any person becomes an Acquiring Person or (y) the date
on which a tender or exchange offer by any Person (other than
an Exempt Person) is first published or sent or given within
the meaning of Rule 14d-4(a) of the Exchange Act or any
successor rule, if upon consummation thereof such Person could
become an Acquiring Person (such exchange ratio being referred
to herein as the "Section 24(a)(ii) Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock of the
Company.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights pursuant to Section 11(a)(ii)
shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock of the
Company equal to the number of such Rights held by such holder
multiplied by the Section 24(a)(i) Exchange Ratio or the Section
24(a)(ii) Exchange Ratio, as applicable; provided, however, that the
holder of a Right exchanged pursuant to this Section 24 shall continue
to have the right to purchase securities of the Principal Party
following a Section 13 Event which has occurred or may thereafter
occur, as set forth in Section 13 hereof. The Company shall promptly
give notice of any such exchange in accordance with Section 26 (with
30
prompt written notice thereof to the Rights Agent) hereof and shall
promptly mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry
books of the Rights Agent; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock of the Company for Rights will
be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have
become null and void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Common Stock Equivalents for Common Stock
of the Company exchangeable for Rights, at the applicable Section
24(a)(i) Exchange Ratio or Section 24(a)(ii) Exchange Ratio, for each
share of Common Stock of the Company, as appropriately adjusted to
reflect adjustments in the voting, liquidation and dividend rights of
the Common Stock Equivalents pursuant to the terms thereof, so that
such Common Stock Equivalents delivered in lieu of each share of Common
Stock of the Company shall have the same voting, liquidation and
dividend rights as one share of Common Stock of the Company.
(d) In the event that there shall not be sufficient shares of
Common Stock of the Company (or Common Stock Equivalents) issued but
not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, (i) the
Company shall take all such action as may be necessary to authorize
additional shares of Common Stock of the Company (or Common Stock
Equivalents) for issuance upon exchange of the Rights and (ii) the
Board of Directors of the Company may determine to exchange shares of
Common Stock of the Company for then outstanding and exercisable Rights
at an exchange ratio of less than one share of Common Stock of the
Company per Right, appropriately adjusted so that all (and not less
than all) shares of Common Stock of the Company issued but not
outstanding or authorized but unissued (and not reserved for issuance
other than upon exercise of the Rights) are issued in the exchange
contemplated by this Section 24. To the extent that the Company
determines that some action need be taken pursuant to this Section
24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days
following the date on which the event described in Section 24(a) shall
have occurred, in order to seek any authorization of additional Common
Shares and/or to decide the appropriate form of distribution to be made
pursuant to the above provision and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended (with prompt written notice thereof to the Rights
Agent).
(e) The Company shall not be required to issue fractions of
Common Stock of the Company or to distribute certificates which
evidence fractional shares of Common Stock of the Company. If the
Company elects not to issue such fractional shares of Common Stock of
the Company, the Company shall pay, in lieu of such fractional shares
of Common Stock of the Company, to the registered holders of the Right
Certificates with regard to which such fractional shares of Common
Stock of the Company would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole share of
Common Stock of the Company. For the purposes of this paragraph (e),
the Fair Market Value of a whole share of Common Stock of the Company
shall be the closing price of a share of Common Stock of the Company
(as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of shares of Common Stock of the Company or to
31
make any other distribution to the holders of shares of Common Stock of
the Company (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the
holders of shares of Common Stock of the Company rights or warrants to
subscribe for or to purchase any additional shares of shares of Common
Stock of the Company or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification
of its shares of Common Stock of the Company (other than a
reclassification involving only the subdivision of outstanding shares
of shares of Common Stock of the Company), or (iv) to effect any
consolidation or merger into or with, or to effect any sale, mortgage
or other transfer (or to permit one or more of its Subsidiaries to
effect any sale, mortgage or other transfer), in one transaction or a
series of related transactions, of 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any
other Person (other than a Subsidiary of the Company in one or more
transactions each of which is not prohibited by the proviso at the end
of the first sentence of Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then in each
such case, the Company shall give to each holder of a Right Certificate
and to the Rights Agent, in accordance with Section 26 hereof, prompt
written notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders of the
shares of Common Stock of the Company, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the record
date for determining holders of the shares of Common Stock of the
Company for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by the
holders of the shares of Common Stock of the Company, whichever shall
be the earlier; provided, however, no such notice shall be required
pursuant to this Section 25 as a result of any Subsidiary of the
Company effecting a consolidation or merger with or into, or effecting
a sale or other transfer of assets or earnings power to, any other
Subsidiary of the Company in a manner not inconsistent with the
provisions of this Agreement.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give
to each registered holder of a Right Certificate and to the Rights
Agent, in accordance with Section 26 hereof, a written notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
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, by facsimile transmission or by nationally-recognized
overnight courier addressed (until another address is filed in writing with the
Rights Agent) as follows:
BellaVista Capital, Inc.
99 El Camino
Menlo Park, California 94025
Facsimile No. (650) 328-3066
Attention: Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, by facsimile transmission or by
nationally-recognized overnight courier addressed (until another address is
filed in writing with the Company) as follows:
32
Mellon Investor Services LLC
235 Montgomery, 23rd Floor
San Francisco, CA 94104
Facsimile No. (415) 989-5241
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate representing
shares of Common Stock of the Company) shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the occurrence of a
Section 11(a)(ii) Event, the Company and the Rights Agent shall, if the Board of
Directors of the Company so directs, supplement or amend any provision of this
Agreement as the Board of Directors of the Company may deem necessary or
desirable without the approval of any holders of certificates representing
shares of Common Stock of the Company, subject to other terms and conditions of
this Agreement. From and after the occurrence of a Section 11(a)(ii) Event, the
Company and the Rights Agent shall, if the Board of Directors of the Company so
directs, supplement or amend this Agreement without the approval of any holder
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereof in any manner
which the Board of Directors of the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or any Affiliate or Associate of an
Acquiring Person); provided, however, that from and after the occurrence of a
Section 11(a)(ii) Event this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and the benefits
to, the holders of Rights (other than an Acquiring Person or any Affiliate or
Associate of an Acquiring Person). Without limiting the foregoing, the Company
may at any time prior to the occurrence of a Section 11(a)(ii) Event amend this
Agreement to lower the threshold set forth in Section 1(a) to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
Common Stock or Preferred Stock of the Company then known by the Company to be
Beneficially Owned by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Stock or Preferred Stock of the Company
for or pursuant to the terms of any such plan) and (ii) 10%. Upon the delivery
of a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment, and any
failure of the Rights Agent to so execute such supplement or amendment shall not
affect the validity of the actions taken by the Board of Directors of the
Company pursuant to this Section 27. Prior to the occurrence of a Section
11(a)(ii) Event, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock and Preferred Stock
of the Company. Notwithstanding any other provision hereof, the Rights Agent's
consent must be obtained regarding any amendment or supplement pursuant to this
Section 27 which alters the Rights Agent's rights, duties or liabilities.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors 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)
33
make all determinations and calculations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject any member of the Board of Directors to any liability to the
holders of the Rights or to any other person. The Rights Agent shall always be
entitled to assume that the Board of Directors of the Company acted in good
faith and the Rights Agent shall be fully protected and shall incur no liability
in reliance therein.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock and Preferred Stock of the Company) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock and Preferred Stock of
the Company).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from the Agreement would adversely affect the purpose or effect
of the Agreement, the right of redemption set forth in Section 23 hereof shall
be reinstated (with prompt written notice thereof to the Rights Agent) and shall
not expire until the Close of Business on the tenth day following the date of
such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be governed by the laws of the State of
Maryland to the extent that Maryland law applies to the Company as a Maryland
corporation, and otherwise shall be deemed a contract made and to be performed
in the State of California and for all purposes shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts to be made and to be performed entirely within the State of
California, provided, however, that all provisions regarding the rights, duties,
liabilities and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be 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.
34
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and attested, all as of the day and
year first above written.
ATTEST: BELLAVISTA CAPITAL, INC.
By: /s/ __________________ By: /s/ ____________________
Name: ___________________
Title: __________________
ATTEST: MELLON INVESTOR SERVICES LLC
as Rights Agent
By: /s/ __________________ By: /s/ ____________________
Name: ___________________
Title: __________________
Exhibit A
[Form of Right Certificate]
Certificate No. R-_______ Rights
NOT EXERCISABLE AFTER JULY 1, 2014 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF BELLAVISTA
CAPITAL, INC., AT $0.01 PER RIGHT, ON THE TERMS SET FORTH IN THE SHAREHOLDER
RIGHTS AGREEMENT BETWEEN BELLAVISTA CAPITAL, INC. ANDMELLON INVESTOR SERVICES
LLC, AS RIGHTS AGENT, DATED AS OF JULY 19, 2004 (THE "RIGHTS AGREEMENT"). UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
BELLAVISTA CAPITAL, 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
Shareholder Rights Agreement dated as of ___________, 2004 (the "Rights
Agreement") between BellaVista Capital, Inc. (the "Company") and [Name of Rights
Agent], 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 the close of business on ____________, 2014 at the
office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one fully paid, non-assessable share of the common
stock, no par value (the "Common Stock"), of the Company, at a purchase price of
per share (the "Exercise Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and the related Certificate
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Exercise Price per share set forth above, are the number and Exercise
Price as of __________ based on the Common Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person or Associate or
Affiliate thereof, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a Person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Common Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
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
36
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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also available
upon written request to the Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or 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
Certificates for the number of whole Rights not exercised. If this Right
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Right
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
or any part of the Rights evidenced by this Certificate for shares of the
Company's Common Stock at an exchange ratio (subject to adjustment) specified in
the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Board of Directors of the Company at
its option at a redemption price of $0.01 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of stock upon
the exercise of any Right or Rights evidenced hereby. If the Company elects not
to issue such fractional shares, 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 shares of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by an authorized signatory of the Rights
Agent.
37
WITNESS the facsimile signature of the proper officers of the Company as
a document under corporate seal.
Attested: BELLAVISTA CAPITAL, INC.
By: _______________________ By: __________________________
[Secretary or Assistant Name:
Secretary] Title: [Chairman, Vice Chairman,
President or Vice President]
Countersigned:
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By: _______________________ Date: _______________________
Name:
Title:
38
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________ hereby sells, assigns and transfers
unto ________________ (Please print name and address of transferee)
________________ this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
________________ Attorney, to transfer the within Right Certificate on the books
of the within-named Company, with full power of substitution. Dated:
_____________________
Signature
Signature Medallion Guaranteed: __________________________
39
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate _______ are _______
are not being transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned _______ did _______ did not directly or indirectly acquire the
Rights evidenced by this Right Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of any such Person.
Dated: _____________________
Signature
40
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
41
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To BELLAVISTA CAPITAL, INC.:
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security or other identifying taxpayer number: ____________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying taxpayer number: ____________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print name and address)
Dated: _____________________
Signature
Signature Guaranteed: _________________________________
42
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate _______ are _______
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned _______ did _______ did not directly or indirectly acquire the
Rights evidenced by this Right Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of any such Person.
Dated: _____________________
Signature
43
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
44
TABLE OF CONTENTS
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................7
Section 3. Issue of Right Certificates.......................................8
Section 4. Form of Right Certificates.......................................10
Section 5. Countersignature and Registration................................11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates..........12
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights....12
Section 8. Cancellation and Destruction of Right Certificates...............14
Section 9. Reservation and Availability of Common Stock.....................15
Section 10. Common Stock Record Date.........................................16
Section 11. Adjustment of Exercise Price, Number and Kind of Shares or Number
of Rights........................................................17
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.......25
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power............................................................25
Section 14. Fractional Rights and Fractional Shares..........................28
Section 15. Rights of Action.................................................29
Section 16. Agreement of Right Holders.......................................30
Section 17. Right Certificate Holder Not Deemed a Shareholder................30
Section 18. Concerning the Rights Agent......................................31
Section 19. Merger or Consolidation or Change of Name of Rights Agent........32
Section 20. Duties of Rights Agent...........................................32
Section 21. Change of Rights Agent...........................................35
Section 22. Issuance of New Right Certificates...............................36
Section 23. Redemption.......................................................36
Section 24. Exchange.........................................................36
Section 25. Notice of Certain Events.........................................39
Section 26. Notices..........................................................40
Section 27. Supplements and Amendments.......................................41
Section 28. Successors.......................................................42
Section 29. Determinations and Actions by the Board of Directors.............42
Section 30. Benefits of this Agreement.......................................42
Section 31. Severability.....................................................42
Section 32. Governing Law....................................................43
Section 33. Counterparts.....................................................43
Section 34. Descriptive Headings.............................................43
45