Exhibit 10.1
DST SYSTEMS, INC.
and
EQUISERVE TRUST COMPANY, N.A., Rights Agent
RIGHTS AGREEMENT
Dated as of
October 10, 2005
- --------------------------------------------------------------------------------
DST SYSTEMS, INC. RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions.............................................1
Section 2. Appointment of a Rights Agent...................................5
Section 3. Certificates and Transfer of Rights.............................5
Section 4. Form of Rights Certificates.....................................7
Section 5. Countersignature and Registration...............................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates....................................................9
Section 7. Exercise of Rights, Purchase Price, Expiration Date of Rights..10
Section 8. Cancellation and Destruction of Rights Certificates............12
Section 9. Reservation and Availability of Shares of Capital Stock........12
Section 10. Preferred Stock Record Date....................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights...............................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..................................................22
Section 14. Fractional Rights and Fractional Shares........................25
Section 15. Rights of Action...............................................26
Section 16. Agreement of Right Holders.....................................26
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............27
Section 18. Concerning the Rights Agent....................................27
Section 19. Merger or Consolidation or Change of Name of Rights Agent......28
Section 20. Duties of Rights Agent.........................................29
Section 21. Change of Rights Agent.........................................30
i
Section 22. Issuance of New Rights Certificates............................31
Section 23. Redemption and Termination.....................................32
Section 24. Notice of Certain Events.......................................33
Section 25. Notices........................................................34
Section 26. Supplements and Amendments.....................................34
Section 27. Successors.....................................................35
Section 28. Determination and Actions by the Board of Directors, etc.......35
Section 29. Benefits of this Agreement.....................................36
Section 30. Severability...................................................36
Section 31. Governing Law..................................................36
Section 32. Counterparts...................................................36
Section 33. Descriptive Headings...........................................36
Exhibit A - Form of Certificate of Designation
Exhibit B - Form of Rights Certificate
- Form of Assignment
- Certificate
- Notice
- Form of Election to Purchase
- Certificate
- Notice
Exhibit C - Summary of Rights to Purchase Preferred Stock
ii
RIGHTS AGREEMENT
This Agreement, dated as of October 10, 2005, between DST SYSTEMS, INC., a
Delaware corporation (the "Company"), and EQUISERVE TRUST COMPANY, N.A., a
national banking corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company (the "Board of Directors")
has authorized and declared a dividend of one Right (as defined herein) for each
outstanding share of the common stock (as defined herein), of the Company at the
close of business on October 18, 2005 (the "Record Date") and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11 hereof) in respect of each share of Common Stock of
the Company issued (whether originally issued or delivered from the Company's
treasury) between the Record Date and the earlier of the Distribution Date, the
Expiration Date or the Final Expiration Date (as such terms are hereinafter
defined), each Right initially representing the right to purchase, under certain
circumstances, 1/1,000ths of a share of Preferred Stock (as defined herein),
upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the Company and the Rights Agent hereby agree as follows:
Section 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
indicated.
(a) "Acquiring Person" shall mean any Person who, together with all
Affiliates or Associates of such Person, shall be the Beneficial Owner of a
Substantial Block, whether or not such Person continues to be the
Beneficial Owner of a Substantial Block, but shall not include: (i) the
Company; (ii) any subsidiary of the Company; (iii) any employee benefit
plan of the Company or of any subsidiary of the Company, or any Person
organized, appointed or established by the Company or by any subsidiary of
the Company for or pursuant to the terms of any such plan; and (iv) a
Person who, together with all Affiliates and Associates of such Person,
would become an Acquiring Person solely as a result of a reduction of the
number of shares of Common Stock of the Company outstanding, including
repurchases of outstanding shares of Common Stock of the Company by the
Company, which reduction increases the percentage of outstanding shares of
Common Stock of the Company beneficially owned by such Person until such
Person, Affiliate or Associate after becoming aware that such Person has
become the Beneficial Owner of a Substantial Block shall thereafter become
the Beneficial Owner of additional shares of Common Stock, other than
shares received directly from the Company pursuant to a plan approved by a
majority of the Independent Directors, representing one percent (1%) or
more of the number of shares of Common Stock then outstanding.
(b) "Adjusted Number of Shares" shall have the meaning given the term in
Section 11(a)(iii) of this Agreement.
(c) "Adjusted Purchase Price" shall have the meaning given the term in
Section 11(a) (iii) of this Agreement.
(d) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the Exchange Act.
(e) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities that:
(i) Such Person, or any of such Person's Affiliates or Associates,
beneficially owns, directly or indirectly (as determined pursuant to
Rule 13d-3 of the Exchange Act);
(ii) Such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has: (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or
not in writing), or upon the exercise, conversion or exchange of
rights, warrants or options, or otherwise, (PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by such Person or any such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange and securities issuable upon the exercise of the Rights at
any time prior to the occurrence of a Triggering Event); or (B) the
right to vote or dispose of pursuant to any agreement, arrangement or
understanding (whether or not in writing) provided, however, that a
Person shall not be deemed the Beneficial Owner or to beneficially
own, any security under this clause (B) if the agreement, arrangement
or understanding to vote such security (1) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange
Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) Are beneficially owned, directly or indirectly, by any other
Person with which such former Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this paragraph (c)) or
disposing of any securities of the Company;
PROVIDED, HOWEVER, that nothing in this paragraph (e) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(f) "Capital Stock Equivalents" shall have the meaning given the term in
Section 11(a)(iii) of this Agreement.
(g) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of Missouri or Massachusetts
are authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00 p.m., Eastern
time on such date, PROVIDED, HOWEVER, if such date is not a Business Day it
shall mean 5:00 p.m. on the next succeeding Business Day.
(i) "Common Stock" when used with reference to the Company shall mean the
Common Stock, $0.01 par value, of the Company as adjusted from time to
time. "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock with the greatest voting power of such
Person or the equity securities or other equity interest having power to
control or direct the management of such Person.
(j) "Current Market Price" of the Common Stock shall have the meaning given
the term in Section 11(d)(i) of this Agreement.
(k) "Current Market Price" of the Preferred Stock shall have the meaning
given the term in Section 11(d)(ii) of this Agreement.
(l) "Distribution Date" shall have the meaning given the term in Section
3(a) of this Agreement.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, and in effect on the date
hereof.
(n) "Expiration Date" shall have the meaning given the term in Section 7(a)
of this Agreement.
(o) "Final Expiration Date" shall have the meaning given the term in
Section 7(a) of this Agreement.
(p) "Independent Director" shall mean any member of the Board of Directors
of the Company, while such person is a member of the Board, who is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such Affiliate
or Associate.
(q) "Permitted Offer" shall mean a tender or exchange offer that is for all
outstanding Common Stock of the Company at a price and on terms determined
to be adequate prior to the purchase of shares under such tender or
exchange offer, by at least a majority of the Independent Directors, taking
into account all factors that such directors deem relevant including,
without limitation, prices that could reasonably be achieved if the Company
or its assets were sold on an orderly basis designed to realized maximum
value and otherwise in the best interests of the Company and its
stockholders (other than the Person or any Affiliate or Associate thereof
for whose benefit the offer is being made).
(r) "Person" shall mean any individual, firm, corporation, partnership,
joint venture, association, trust or other entity.
(s) "Preferred Stock" shall mean the shares of Series A Preferred Stock,
par value $1.00 per share, of the Company having substantially the rights,
powers and preferences set forth in the Certificate of Designation, as
amended, attached hereto as Exhibit A, and to the extent that there are not
a sufficient number of shares of Series A Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred Stock
of the Company designated for such purpose containing terms substantially
similar to the terms of the Series A Preferred Stock.
(t) "Principal Party" shall have the meaning given the term in Section
13(b) of this Agreement.
(u) "Proration Factor" shall have the meaning given the term in Section
11(a)(iii) of this Agreement.
(v) "Rights Certificates" shall have the meaning given the term in Section
3 of this Agreement.
(w) "Share Acquisition Date" shall mean the close of business on the tenth
calendar day after the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report
filed or amended pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
(x) "Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules, regulations, and forms promulgated thereunder, all as in effect
on the date hereof.
(y) A "subsidiary" of any Person shall mean any Person of whom a majority
of the voting power of the voting equity securities or voting interests is
owned or, directly or indirectly, by such former Person, or which is
otherwise controlled, directly or indirectly, by such former Person.
(z) "Substantial Block" shall mean a number of shares of the Common Stock
of the Company that equals or exceeds 15 percent of the number of shares of
the Common Stock of the Company then outstanding.
(aa) "Trading Days" shall have the meaning given the term in Section
11(d)(i) of this Agreement.
(bb) "Triggering Event" shall mean any event described in Sections
11(a)(ii) or 13(a) of this Agreement.
Section 2. APPOINTMENT OF A RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3, hereof
shall prior to the Distribution Date also be the holders of the Common Stock of
the Company) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable, upon ten (10) days
prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event be liable for, the acts or omissions of any such
Co-Rights Agent.
Section 3. CERTIFICATES AND TRANSFER OF RIGHTS.
(a) COMMON STOCK OUTSTANDING ON THE RECORD DATE. Until the earlier of
(unless extended by the Board of Directors of the Company) (i) the Share
Acquisition Date or (ii) the close of business on the tenth calendar day
(or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement of, or first public announcement of the
intent of any Person (other than the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any Person organized,
appointed or established by the Company or any subsidiary of the Company
for or pursuant to the terms of any such plan) to commence (which intention
to commence remains in effect for five business days after such
announcement) a tender or exchange offer if, upon consummation thereof,
such Person would be an Acquiring Person (including any such date that is
after the date of this Agreement and prior to the issuance of the Rights
(the earlier of the dates in subsections (i) and (ii) hereof being herein
referred to as the "Distribution Date")), the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock of the Company (which certificates of such
Common Stock of the Company shall be deemed also to be Rights
Certificates), and not by separate Rights Certificates, and the right to
receive Rights Certificates will be transferable only in connection with
the transfer of such Common Stock (including a transfer to the Company).
With respect to certificates for the Common Stock of the Company
outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for the Common Stock of the Company
with or without a Summary of Rights attached thereto and the registered
holders of the Common Stock of the Company shall also be the registered
holders of the associated Rights. Until the earlier of Distribution Date or
Expiration Date, the surrender or transfer (including a transfer to the
Company) of any of the certificates for the Common Stock of the Company
outstanding on the Record Date shall also constitute the transfer of the
Rights associated with the Common Stock of the Company represented by such
certificate. The Company will make available, as promptly as practicable
following the Record Date, a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit C, to any holder of Rights who may so
request from time to time prior to the Expiration Date.
(b) DISTRIBUTION OF SEPARATE RIGHTS CERTIFICATES. As soon as practicable
after the Distribution Date, the Rights Agent will send, by first-class,
insured, postage prepaid
mail, to each record holder of the Common 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, a separate Rights Certificate in
substantially the form of Exhibit B attached hereto evidencing one Right
for each share of the Common Stock of the Company so held, subject to
adjustment as provided herein. In the event that an adjustment in the
number of Rights per Common Share has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Rights Certificate, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(c) ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK AND RIGHTS. Rights shall
be issued in respect of all shares of Common Stock of the Company issued
(whether originally issued or delivered from the Company's treasury) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Certificates representing such shares of such Common Stock
shall be deemed to be impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between DST Systems,
Inc. and EquiServe Trust Company, N.A., dated as of October 10, 2005,
as may be amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of DST Systems,
Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may expire or may be evidenced
by separate certificates and will no longer be evidenced by this
certificate. DST Systems, 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 within five business days after receipt of
a written request therefor. Under certain circumstances, Rights issued
to, or which are or were beneficially owned by, Acquiring Persons or
their Affiliates or Associates (as such terms are defined in the
Rights Agreement) and any subsequent holder of such Rights may become
null and void.
Until the earlier of the Distribution Date or the Expiration Date, the
Rights associated with the Common Stock of the Company represented by
certificates containing the foregoing legend shall be evidenced by such
certificates alone, and the surrender for transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
(d) PURCHASE OF COMMON STOCK BY THE COMPANY. In the event that the Company
purchases or acquires any of its Common Stock after the Record Date but
prior to the
Distribution Date, the Company shall not be entitled to exercise any Rights
associated with the Common Stock so purchased or acquired. Upon reissuance
of such Common Stock by the Company the Rights shall again attach to such
Common Stock as set forth in Section 3(c) of this Agreement.
(e) RESTRICTION ON TRANSFERS TO ACQUIRING PERSONS. Notwithstanding anything
in this Agreement to the contrary, no Right shall at any time be
transferable or transferred, in one transaction or in a series of related
transactions (including a tender offer or exchange offer), directly or
indirectly (i) to any Person who is an Acquiring Person, (ii) to any Person
in connection with a transaction or series of related transactions in which
such Person becomes an Acquiring Person, (iii) to any Person who, as a
result of such transfer, would beneficially own 20 percent or more of the
Rights, or (iv) to any Affiliate or Associate of a Person referred to in
any one or more of the foregoing clauses (i), (ii), or (iii). Any purported
or attempted transfer of a Right on or after the Record Date in violation
of the foregoing provisions (regardless whether such purported or attempted
transfer shall be recorded on any transfer ledger) shall be null and void
as of the date of the purported or attempted transfer without any further
action on the part of the Company or the Rights Agent, and any Right that
has been the subject of any such purported or attempted transfer shall for
purposes of this Agreement and the Right Certificate be deemed to be held
beneficially by the Person who attempted to make such purported or
attempted transfer and, thereafter, shall continue to be exercisable by
such Person or, in the case of a transfer not prohibited by this Agreement,
such Person's transferee, for a like number of 1/1,000ths of a Preferred
Share (or other securities, cash or other assets, as the case may be)
pursuant to this Agreement. The Company may require (or cause the Rights
Agent or any transfer agent of the Company to require) any Person who
submits a Right Certificate for transfer on the registry books or to
exercise the Rights represented thereby to establish to the satisfaction of
the Company, in its sole discretion, that such attempted transfer is not in
violation of the provisions of this Section 3(e). The Company and the
Rights Agent shall use all reasonable efforts to insure the provisions of
this Section 3(e) are complied with, but shall have no liability to any
holder of a Right Certificate (other than as specifically provided herein)
or any other Person as a result of a failure to so insure.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) FORM OF CERTIFICATE. The Rights Certificates (and the forms of election
to purchase shares and of assignment to be printed on the reverse thereof)
shall, subject to paragraph (a) of Section 3 of this Agreement, be
substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usages.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to purchase such number
of 1/1,000ths of a share of Preferred Stock as shall be set forth therein
at the price per 1/1,000ths of a share of Preferred Stock set forth therein
(the "Purchase Price"), but the number of such shares and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any Rights
Certificate issued pursuant to Section 3 or Section 22 hereof that
represents Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate thereof, (ii) a transferee of an Acquiring Person
(or of any Associate or Affiliate of such Acquiring Person) who becomes a
transferee after the Acquiring Person became such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate of such
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 such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding that
has a primary purpose or effect avoidance of Section 7(e) hereof, any
Rights Certificate issued at any time to any nominee of such Acquiring
Person, Associate or Affiliate, and any Rights Certificate issued pursuant
to Section 6 or Section 11 upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence,
shall contain the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
The provisions of Section 7(e) of the Rights Agreement shall be operative
whether or not the foregoing legend is contained on any Rights Certificate.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company in
the same manner as the Company then does for certificates for Common Stock
of the Company. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile, and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent, issued and
delivered with the same force and effect as though the person who signed
such Rights Certificate had not ceased to be such officer of
the Company; and any Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate
place for surrender of the Rights Certificates upon exercise or transfer,
books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its
face by each of the Rights Certificates and the date of each of the Rights
Certificates, and such other information as the Rights Agent deems
appropriate in the circumstances.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the close of business on the Distribution Date and at
or prior to the close of business on the Expiration Date, any Rights
Certificates may be transferred, split up or combined with or exchanged for any
other Rights Certificates, entitling the registered holder to purchase a like
number of 1/1,000ths of a share of Preferred Stock (or following a Triggering
Event, Common Stock, other securities or other assets, as may be necessary) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be impose in connection with any
transfer, split up, combination or exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered owner in lieu of the Rights
Certificates so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS, PURCHASE PRICE, EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Sections 9(c),11(a)(iii) and 23(a) hereof) in
whole or in part at any time after the Distribution Date upon surrender of
the Rights Certificate, with the form of election to purchase on the
reverse side thereof duly completed and executed, to the Rights Agent at
the principal office of the Rights Agent or offices designated by the
Rights Agent for such purposes, together with payment of the aggregate
Purchase Price for the total number of 1/1,000ths of a share of Preferred
Stock (or other securities or assets, as may be necessary and authorized)
as to which such surrendered Rights are exercised, at or prior to the close
of business on the earlier of: (i) October 17, 2015 (the "Final Expiration
Date"); or (ii) the date on which the Rights are redeemed as provided in
Section 23; or (iii) the consummation of a transaction contemplated by
Section 13(d) hereof (such earlier date being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each 1/1,000ths of a share of Preferred Stock
pursuant to the exercise of a Right shall initially be $225.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights
with the form of election to purchase and the Certificate duly completed
and executed, payment of the Purchase Price for the number of 1/1,000ths of
a share of Preferred Stock (or other securities or other assets, as the
case may be) to be purchased and an amount equal to any applicable transfer
tax, the Rights Agent shall thereupon, subject to Section 20(k), promptly:
(i) (A) requisition from any transfer agent of the Preferred Stock (or
make available, if the Rights Agent is the transfer agent for such
Preferred Stock) a certificate for the total number of 1/1,000ths of a
share of the Preferred Stock to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the
total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the
depositary agent a depositary receipt representing such number of
1/1,000ths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company hereby irrevocably authorizes such
depositary agent to comply with such request;
(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;
(iii) after receipt of such certificate or depositary receipt, cause
the same to be delivered to or upon the order of the registered holder
of such Rights Certificates, registered in such name or names as may
be designated by such holder; and
(iv) when appropriate, after receipt promptly deliver such cash, if
any, to or upon the order of the registered holder of such Rights
Certificate.
The payment of the Purchase Price may be made: (i) in cash or by certified bank
check or bank draft payable to the order of the Company, (ii) by delivery of a
certificate or certificates (with appropriate stock powers executed in blank
attached thereto) evidencing a number of shares of Common Stock equal to the
then Purchase Price divided by the current market price (as determined pursuant
to Section 11(d) hereof) per share of Common Stock on the Trading Date
immediately preceding the date of such exercise, or (iii) by a combination of
(i) and (ii). In the event that the Company is obligated to issue securities,
distribute property or pay cash pursuant to Section 11 (a) (iii) hereof, the
Company will make all arrangements necessary so that cash, property or
securities are available for issuance, distribution or payment by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if there
occurs the event set forth in Section 11(a)(ii), then any Rights that are
or were beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of such Acquiring Person; (ii) any subsequent holder of such
Rights; (iii) a transferee of an Acquiring Person or of any Associate or
Affiliate thereof who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any
Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which a majority of the Independent Directors has determined is
part of a plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e) shall become or be (as the
case may be) null and void with respect to the rights provided under
Section 11(a)(ii) without any further action, and shall thereafter not
provide any such holder with any rights whatsoever under this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations with respect
to an Acquiring Person or its Affiliates, Associates or transferees
thereof.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action
with respect to a
registered holder upon the occurrence of any purported exercise as set
forth in this Section 7 unless such registered holder shall have: (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights 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 RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange, if surrendered to the Company or to any of
its agents, shall be delivered to the Rights Agent for cancellation or in
canceled form, or if surrendered to the Rights Agent, then shall be canceled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or, at the written request of the Company, destroy such canceled Rights
Certificates, and in such latter case shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL STOCK.
The Company covenants and agrees that it will:
(a) Cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and following the occurrence of a
Triggering Event, out of its authorized and unissued shares of Common Stock
or its authorized and issued Common Stock held in its treasury, other
securities as provided herein or some combination thereof) the number of
shares of Preferred Stock or other securities as provided herein or some
combination of such securities that will be sufficient to permit the
exercise in full of all outstanding Rights whenever issued.
(b) If the shares of Preferred Stock (and following the occurrence of a
Triggering Event, Common Stock and/or other securities) issuable upon the
exercise of Rights are listed on any national securities exchange, use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) Use its best efforts to: (i) file, as soon as practicable following the
first occurrence of the Distribution Date, a registration statement under
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;
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the date of the expiration of the
Rights; (iv) to otherwise comply with all requirements of the Securities
Act and the Exchange Act applicable to the exercise of the Rights and
issuance of the securities upon such exercise; and (v) take promptly such
action as may be appropriate under the blue sky or securities laws of the
States such laws of which would be applicable to the Rights and the
exercise thereof in order for the securities issuable upon exercise of the
Rights to be offered, sold and delivered in accordance with such laws.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained and such
exercise shall be permitted under applicable law and a registration
statement relating thereto shall have been declared effective.
(d) Take all such action as may be necessary to ensure that all 1/1,000ths
shares of the Preferred Stock (and following the occurrence of a Triggering
Event, the other securities as permitted herein) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and non-assessable.
(e) Pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery of
the Rights Certificates or of any certificates for a number of 1/1,000ths
shares of the Preferred Stock (or other securities, as the case may be)
upon the exercise of Rights all costs and expenses incurred in connection
with the obligations set forth in this Section 9. The Company shall not,
however, be required: (i) to pay any transfer tax that may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance of delivery of a number of certificates for
whole or fractional shares of a Preferred Stock (or other securities, as
the case may be) in a name other than that of the registered holder of the
Rights Certificate evidencing Rights surrendered for exercise; or (ii) to
issue or deliver any certificates for whole or fractional shares of the
Preferred Stock upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE.
Each person in whose name any certificate for any whole or fractional
shares of Preferred Stock (or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such shares of Preferred Stock (or other securities, as the
case may be) represented thereby, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or other securities, as the case may be) transfer
books of the Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificates shall be dated, the next
succeeding business day on which such transfer books for such securities are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights as a stockholder of the
Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER
OF RIGHTS.
The Purchase Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) In the event that:
(i) CHANGES IN THE PREFERRED STOCK. The Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of the Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, then the Purchase Price in effect at
the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number
and kind of shares of Preferred Stock (or other securities, as the
case may be), issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be
entitled to receive, upon the payment of the Purchase Price then in
effect, the aggregate number (whether whole or fractional) and kind of
securities that if such Right had been exercised immediately prior to
such date and at a time when the Preferred Stock transfer books of the
Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs that would require
an adjustment under both this 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).
(ii) DETERMINATION OF SHARES OF PREFERRED STOCK. Any Person (other
than the Company, any subsidiary of the Company, any employee benefit
plan of the Company or any of its subsidiaries or any Person holding
securities of the Company organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to the terms of any
such plan), alone or together with its Affiliates and Associates shall
become an Acquiring Person (except pursuant to a Permitted Offer),
then proper provisions shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall, for a period of 60
days after the effective date of an appropriate registration statement
filed pursuant to Section 9 hereof, have a right to receive, upon
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of whole or fractional shares
of Preferred Stock (or if the Board determines prior to
the Distribution Date, such number of shares of Common Stock of the
Company in lieu of the Preferred Stock) as shall equal the result
obtained by multiplying the then current Purchase Price by the then
number of 1/1,000ths of a share of Preferred Stock (or such Common
Stock) for which a Right is exercisable immediately prior to the
occurrence of such Section 11(a)(ii) event then dividing that product
(which, following such first occurrence, shall thereafter be referred
to as the Purchase Price for each Right and for all other purposes of
this Agreement) by 50 percent of the current market price per one
share of Preferred Stock (or Common Stock of the Company, as the case
may be) (determined pursuant to Section 11(d)) on the date of the
first occurrence of the event set forth in this subparagraph (ii)
(such number of shares being referred to as the "Adjustment Shares").
(iii) INSUFFICIENT PREFERRED STOCK. There shall not be sufficient
treasury shares or authorized but unissued and unreserved Preferred
Stock (or Common Stock of the Company as provided for in Section
11(a)(ii) hereof) to permit the exercise in full of all the
outstanding Rights in accordance with the foregoing subparagraph (ii)
and the Rights become so exercisable, notwithstanding any other
provision of this Agreement, to the extent necessary and permitted by
applicable law, each Right shall thereafter represent the right to
receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement: (A) shares (whether whole
or fractional) of Common Stock of the Company that may permissibly be
issued; (B) a number (whether whole or fractional) of other equity
securities of the Company (or in the discretion of the Board of
Directors of the Company, debt) including, but not limited to, whole
or fractional shares of preferred stock of the Company other than the
Preferred Stock (such alternative securities of the Company being
referred to as "Capital Stock Equivalents"); or (C) some combination
of (A), (B) and the Preferred Stock, that, in the case of (A), (B) or
(C), the Board of Directors of the Company has determined to have the
same aggregate current market value as determined based upon advice of
a nationally recognized investment banking firm selected by the
Independent Directors and/or pursuant to Section 11(d)(i) and (ii)
hereof, to the extent applicable as the aggregate value of the
Preferred Stock if there were available for issuance sufficient shares
of Preferred Stock; PROVIDED, HOWEVER, if there are unavailable
sufficient Preferred Stock or Capital Stock Equivalents, then the
Company shall, to the extent permitted by applicable law, promptly
take all such action as may be necessary to authorize additional
Preferred Stock or Capital Stock Equivalents for issuance upon
exercise of the Rights, including the calling of a meeting of
stockholders; and provided, further, that if the Company is unable to
cause sufficient Preferred Stock or Capital Stock Equivalents to be
available for issuance upon exercise in full of all of the outstanding
Rights, then each Right shall thereafter represent the right to
receive the Adjusted Number of Shares upon exercise of the Adjusted
Purchase Price (as such terms are hereinafter defined). As used
herein, the term "Adjusted Number of Shares" shall be equal to that
number of whole or fractional shares of Preferred Stock (or Capital
Stock Equivalents) equal to the product of (A) the number of
Adjustment Shares and (B)
a fraction, the numerator of which is the number of Shares of
Preferred Stock (or Capital Stock Equivalents) available for issuance
upon exercise of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issuable upon exercise
in full of all Rights (assuming there were a sufficient number of
shares of Preferred Stock (or Capital Stock Equivalents as the case
may be) available) (such fraction being referred to as the "Proration
Factor"). The "Adjusted Purchase Price" shall mean the product of the
Purchase Price and the Proration Factor. The Board of Directors may,
but shall not be required to, establish procedures to allocate the
right to receive Shares of Preferred Stock and other Capital Stock
Equivalents upon exercise of the Rights among holders of Rights.
(b) PREFERRED STOCK RIGHTS OR WARRANTS. In case the Company shall fix a
record date for the issuance of rights or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Preferred Stock
(or Securities convertible into the Preferred Stock or similar preferred
stock) at a price per share of Preferred Stock (or having a conversion
price per share of Preferred Stock, if a security convertible into
Preferred Stock) less than the current market price per share of Preferred
Stock (as defined in Section 11(d) hereof) on such record date, then the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction the numerator of which shall be the number of
shares of Preferred Stock (whether whole or fractional) outstanding on such
record date plus the number of shares of Preferred Stock that the aggregate
offering price of the total number of shares of Preferred Stock and/or
similar preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be
the number of shares of Preferred Stock (whether whole or fractional)
outstanding on such record date plus the number of additional shares of
Preferred Stock (whether whole or fractional) and/or similar preferred
stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid in part or all in a form other than
cash, then the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the Holders of the Rights. Shares of
Preferred Stock (whether whole or fractional) owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or warrants
are not so issued, the Purchased Price shall be adjusted to be the Purchase
Price that would then be in effect if such record date has not been fixed.
(c) DISTRIBUTIONS ON THE PREFERRED STOCK. In case the Company shall fix a
record date for the making of a distribution to all holders of Preferred
Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation)
of evidences of indebtedness, assets (other than a regular
periodic cash dividend at a rate not in excess of 125 percent of the rate
of the last cash dividend theretofore paid out of the earnings or retained
earnings of the Company or a dividend payable in Preferred Stock (but
including any dividend payable in stock other than Preferred Stock)),
securities or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), then the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction the numerator of
which shall be the current market price per share of Preferred Stock (as
defined in Section 11(d) hereof) on such record date, less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the Holders of the Rights) of
the portion of the assets, evidences of indebtedness, securities,
subscription rights or warrants so to be distributed and applicable to one
share of Preferred Stock and the denominator of which shall be such current
market price per share of Preferred Stock (as determined pursuant to
Section 11(d) hereof). Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase
Price that would then be in effect if such record date had not been fixed.
(d) DETERMINATION OF CURRENT MARKET PRICE. For the purpose of any
computation hereunder:
(i) The "current market price" per share of Common Stock on any date
shall be deemed to be for purposes other than Section 11(a)(iii)
hereof the average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date and for purposes
of Section 11(a)(iii) hereof, the average of the daily closing prices
per share of such Common Stock for the 10 consecutive Trading Days
immediately prior to that date; PROVIDED, HOWEVER, that in the event
that the current market price per share of Common Stock is determined
during the period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, shall not
have occurred prior to the commencement of the requisite 30 or 10
Trading Day period, then, and in each such case, the current market
price shall be appropriately adjusted to reflect the current market
price per Common Stock equivalent. 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 principal national securities
exchange on which the shares of the Common Stock are listed or
admitted to trading or, if the shares of the Common Stock are not
listed or admitted to trading on any national securities exchange, the
last sale price
or, if not so reported, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System
(the "NASDAQ System") or such other system then in use, or, if on any
such date the shares of the Common Stock are not quoted by such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the
fair value of such Common Stock on such date shall be as determined in
good faith by the Independent Directors if the Independent Directors
constitute a majority of the Board of Directors, or in the event the
Independent Directors do not constitute a majority of the Board of
Directors, by an independent investment banking firm selected by the
Board of Directors. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the shares of
Common Stock are listed or admitted for trading is open for the
transaction of business or, if the shares of the Common Stock are not
listed or admitted for trading on any national securities exchange, a
Business Day on which securities were traded in the over-the-counter
market. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Independent Directors if the
Independent Directors constitute a majority of the Board of Directors
or in the event the Independent Directors do not constitute a majority
of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) The "current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the current market price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an amount
equal to 1,000 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalization with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "current market price" per share
of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Independent Directors, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all purposes of
this Agreement, the "current market price" of 1/1,000ths of a share of
Preferred Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 1,000.
(e) LIMITATION ON ADJUSTMENT ON PURCHASE PRICE. Notwithstanding anything
herein to the contrary, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1 percent in such price; PROVIDED, HOWEVER, that any adjustments that
by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from
the date of the transaction which mandates such adjustment or (ii) the
Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive
any Capital Stock Equivalents or other shares of capital stock of the
Company other than shares of Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the payment
Purchase Price thereof shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in Section 11(a) through (o),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of 1/1,000ths of a
share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11 (b) and (c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of 1/1,000ths of a share of Preferred Stock (calculated to the
nearest ten-thousandth) obtained by (i) multiplying (x) the number of
1/1,000ths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in lieu of any adjustment in
the number of 1/1,000ths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding, after such adjustment
of the number of Rights, shall be exercisable for the number of 1/1,000ths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after the adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
date thereafter, but, if the Rights Certificates have been issued, shall be
at least 10 Business Days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of 1/1,000ths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per 1/1,000ths of a share
and the number of 1/1,000ths of a share that were expressed in the initial
Rights Certificates issued hereunder and if so, shall not affect in any way
the adjustments or changes required under this Agreement.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of
1/1,000ths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action that may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable such number of 1/1,000ths
of a share of such Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event
the issuance to the holder of any Right exercised after such record date
the number of 1/1,000ths of a share of Preferred Stock and Capital Stock
Equivalents, if any, issuable upon such exercise over and above the number
of 1/1,000ths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or otherwise)
or other securities upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Section 11 to the contrary, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that in their good faith judgment the Board of Directors
shall determine to be advisable in order that any (i) consolidation or
subdivision of Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends, or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company
to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Sections 23 or 26 hereof, take (nor will
it permit any of its subsidiaries to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
(o) The Company covenants and agrees that it shall not, at any time after
the Distribution Date (other than in a transaction or series of
transactions that comply with Section 11(n) hereof): (i) consolidate with;
(ii) merge with or into; or (iii) sell or transfer (or permit any of its
subsidiaries to sell or transfer), in one or more transactions, assets or
earning power aggregating more than 50 percent of the assets or earning
power of the Company and its subsidiaries (taken as a whole) to any other
Person if at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants, other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, in the
event that the Company shall at any time after the Record Date and prior to
the Distribution Date: (i) declare a dividend on the outstanding shares of
Common Stock of the Company payable in shares of Common Stock of the
Company, (ii) subdivide the outstanding shares of Common Stock of the
Company, or (iii) combine the outstanding shares of Common Stock of the
Company into a smaller number of shares, then the number of Rights
associated with each share of Common Stock of the Company then outstanding,
or issued or delivered thereafter but prior to the Distribution Date, shall
be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock of the Company following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock of the Company
immediately prior to such event by a fraction, the numerator of which shall
be the total number of shares of Common Stock of the Company outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Common Stock of the Company
outstanding immediately following the occurrence of such event.
(q) The exercise 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 provided for under this Agreement,
including the rights provided for by Section 13.
(r) Notwithstanding any other provision of this Agreement to the contrary,
if the Company determines that a registration statement filed pursuant to
Section 9(c) hereof is required to be amended or supplemented to continue
to comply with the Securities Act, then the Company may suspend the
exercisability of the Rights and shall promptly after such determination
take all necessary steps to cause to be effective such amended or
supplemented registration statement. Immediately following such
determination to amend or supplement such registration statement, and
immediately following the time such amended or supplemented registration
statement shall become effective, the Company shall publicly announce the
suspension of the exercisability of the Rights or the termination of such
suspension.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall: (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment;
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock copy of such certificate; and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing Shares of
Common Stock) in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) EFFECT ON RIGHTS. In the event that, following the Share 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 that complies with Section 11(o) hereof) and the
Company shall not be the surviving or continuing corporation of such
consolidation or merger; (y) any Person (other than a subsidiary of the
Company in a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding Shares of Common Stock 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 or otherwise transfer (or one
or more of its subsidiaries shall sell or otherwise transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50 percent 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 complies with Section
11(o) hereof), then, and in each such case (except as may be contemplated
by Section 13(d) hereof), proper provision shall be made so that: (i) each
holder of a Right (except as provided in Section 7(e) hereof) shall
thereafter be entitled to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of shares of validly authorized and issued, fully paid,
non-assessable and freely tradable Common Stock of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of
call or first refusal, or other adverse claims as shall be equal to the
result obtained by (A) multiplying the then current Purchase Price by the
then number of 1/1,000ths of a share of Preferred Stock for which a Right
is then exercisable immediately prior to the first occurrence of any of the
events described in subsections (x), (y) or (z) of this paragraph (a) of
Section 13 (each a "Section 13 Event") (or, if an event described in
Section 11(a)(ii) (each a "Section 11 (a) (ii) Event") has occurred prior
to the first occurrence of a Section 13 Event, multiplying the number of
such 1/1,000ths of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event) by the Purchase
Price in effect immediately prior to such first occurrence, and (B)
dividing that product (which following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each Right and for
all purposes of the Agreement) by 50 percent of the current market price
per share of the Common Stock of such Principal Party (determined in the
manner described in Section 11(d)(i) hereof) on the date of consummation of
such Section 13 Event; (ii) the Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof
apply to such Principal Party following the first occurrence of a Section
13 Event; and (iv) such Principal Party shall take such steps (including,
but not limited to, the authorization and reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable upon the
exercise of the Rights.
(b) DEFINITION OF PRINCIPAL PARTY. The term "Principal Party" shall mean:
(i) in the case of any transaction described in subsection (x) or (y)
of paragraph (a) of this Section 13, the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to the merger or
consolidation; or
(ii) in the case of any transaction described in subsection (z) of
paragraph (a) of this Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (x) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person the
Common Stock of which is so registered; (y) in case such Person is a subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of all of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
market value of shares held by the public, and (z) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the rules set forth
in (x) and (y) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "subsidiary" of both or
all of such joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) LIMITATION ON CONSUMMATION OF MERGERS. The Company shall not consummate
any such consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of authorized shares of its Common Stock
that have not been issued or reserved for issuance to permit the exercise
in full of all of the Outstanding Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section
13 and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing, (B) cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Securities Act) until the date of expiration
of the Rights, (C) comply with all applicable State blue sky and other
securities laws, and (D) take all such other action necessary to
enable the Principal Party to issue the securities purchasable upon
exercise of the Rights; and
(ii) will 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 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) PERMITTED OFFERS. Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subsections (x) and (y) of
paragraph (a) of this Section 13 if: (i) such transaction is consummated
with a Person or Persons who acquired shares of Common Stock pursuant to a
Permitted Offer (or a wholly owned subsidiary of any such Person or
Persons); (ii) the price per share of Common Stock of the Company offered
in such transaction is not less than the price per Common Share of the
Company paid to all holders of Common Stock of the Company whose shares
were purchased pursuant to such Permitted Offer; and (iii) the form of
consideration being offered to the remaining holders of Common Stock of the
Company pursuant to such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation of
such transaction contemplated by this paragraph (d), all Rights hereunder
shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) ISSUANCE OF FRACTIONAL RIGHTS. The Company shall not be required to
issue fractions of Rights, except prior to the Distribution Date in
accordance with Section 11(p) hereof, or to distribute Rights Certificates
that evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price of the Rights for any
day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading
on any national securities exchange, the last sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ System or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors. If on any such date no such market
maker is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Independent Directors if such
directors contribute a majority of the Board of Directors or by an
independent investment Banker selected by the Independent Directors.
(b) ISSUANCE OF CERTAIN FRACTIONAL SHARES OF PREFERRED STOCK. The Company
shall not be required to issue fractions of shares of Preferred Stock
(other than fractions that are integral multiples of 1/1,000ths of a share
of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions that
are integral multiples of 1/1,000ths of a share of Preferred Stock). In
lieu of fractional shares that are not integral multiples of 1/1,000ths of
a share of Preferred Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same
fraction of the current market value of 1/1,000ths of a share of Preferred
Stock. For purposes of this Section 14(b), the current market value of
1/1,000ths of a share of Preferred Stock shall be 1/1,000ths of the closing
price of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event the Company shall not be
required to issue fractions of shares of its Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares
of such Common Stock. In lieu of fractional shares of such Common Stock,
the Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share of a the
Common Stock of the Company. For purposes of this Section 14(c), the
current market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Right 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.
Section 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right
to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right by accepting the same consents and agrees with the
Company and the Rights Agents and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent or offices of the Rights Agent
designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate
forms and certificates fully executed;
(c) subject to Section 6(a), Section 7(e) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the Person in whose name
the Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, the Company
must use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of whole
or fractional shares of Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 24), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificates 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 reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the cost and expenses of
defending against any claim of liability in the premises and reasonable
counsel fees and expenses.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to
be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
(c) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation,
succeeding to the corporate trust, stock transfer or other stockholder
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, HOWEVER, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights
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 Rights Certificate so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under
its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates
either in its prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with the legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, the President, any Vice President, the Treasurer, any
assistant treasurer, the Secretary, or any assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for, or by reason of, any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity
or execution of any Rights 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 Rights
Certificate; nor shall it be responsible for any adjustment required under
the provisions of Sections 11 or 13 hereof or be responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after
actual notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to whether any
shares of the Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and non-assessable.
(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 be
reasonably required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President,
the Treasurer, any assistant Treasurer, the Secretary, or any assistant
secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct provided that reasonable care
was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either
not been completed or indicated an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action with respect
to such requested exercise of transfer without first consulting with the
Company.
Section 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement and upon 30 days notice in writing mailed
to the Company and to each transfer agent of the Preferred Stock and the Common
Stock by registered or certified mail,
and, if such resignation occurs after the Distribution Date, to the holders of
the Rights Certificates by first class mail. In the event the transfer agency
relationship in effect between the Company and the Rights Agent terminates, the
Rights Agent will be deemed to resign automatically on the effective date of
such termination, and any required notice will be sent by the Company. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Preferred Stock and the Common
Stock by registered or certified mail, and, if such removal occurs after the
Distribution Date, 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 Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be: (i) a legal business entity,
existing and doing business under the laws of the United States or of any state
of the United States, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million; or (ii) an Affiliate of a corporation described in clause (i) 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 Preferred Stock
and the Common Stock, and if such appointment occurs after the Distribution
Date, mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provision of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number
or kind or class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to such shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement granted or awarded prior to or as of the
Distribution Date, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificates
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors may, at its option, at any time prior to the
Close of Business, on the earlier of (x) the Share Acquisition Date (or if
the Share Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth day following the Record Date) or (y)
the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.0025 per Right as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"),
PROVIDED, HOWEVER, that if, following the occurrence of a Share Acquisition
Date but prior to any event described in Section 13(a), either (x) in
connection with any event specified in Section 13(a) in which all holders
of Common Stock are treated alike and not involving (other than as a holder
of Common Stock being treated like all other such holders) an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or any other
person in which such Acquiring Person, Affiliate or such Associate has any
interest, or any other Person acting directly or indirectly on behalf of or
in association with any such Acquiring Person, Affiliate or Associate, or
(y) following the occurrence of an event set forth in, and the expiration
of any period during which the holders of Rights may exercise the Rights
under, Section 11 (a) (ii) if each of the following shall have occurred and
remain in effect: (i) such Section 11 (a) (ii) event shall be deemed
inadvertent as determined by the Board of Directors in its discretion
taking into account all such factors as it deems relevant; (ii) a Person
who is an Acquiring Person shall have transferred or otherwise disposed of
a number of shares of Common Stock in a transaction, or series of
transactions, which did not result in the occurrence of a Triggering Event
such that such Person is thereafter a Beneficial Owner of 10 percent or
less of the outstanding shares of Common Stock of the Company, (iii) there
are no other Persons, immediately following the occurrence of the event
described in clause (ii) hereof, who are Acquiring Persons, and (iv) the
transfer or other disposition described in clause (ii) hereof, above was
other than pursuant to a transaction, or series of transactions, which
directly or indirectly involved the Company or any of its Subsidiaries,
then the right of redemption shall be reinstated and thereafter be subject
to the provisions of this Section 23.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. Promptly after the action of the Board of Directors
ordering the redemption for the Rights, the Company shall file with the
Rights Agent evidence of such action by the Board of Directors and shall
give notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to each such holder at such holder's last
addresses as it appears upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent
for the Common Stock of the Company. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23, and other than in connection
with the purchase of Common Stock of the Company prior to the Distribution
Date.
Section 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose at any time following the
Distribution Date: (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash dividend at
a rate not in excess of 125 percent of the rate of the last cash dividend
theretofore paid); (ii) to offer to the holders of Preferred Stock rights
or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities,
rights or options; (iii) to effect any reclassification of Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock); (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the
Company in a transaction or transactions that comply with Section 11(o)
hereof); (v) to effect any sale or other transfer (or to permit one or more
of its subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50 percent 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 a transaction or transactions that
comply with Section 11(o) hereof); or (vi) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights Certificate, in accordance
with Section 25, a notice of such proposed action, which shall specify the
record date for, and 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 Preferred Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above
at least twenty days prior to the record date for determining holders of
Preferred Stock for purposes of such action, and in the case of any such
other action, at least twenty days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Stock, whichever shall be earlier.
(b) In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case; (i) the Company shall, as
soon as practicable thereafter, give to each holder of a Rights
Certificate, in accordance with Section 25 and to the extent feasible, a
notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Section 11 (a)
(ii); and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed to thereafter refer to Common Stock and/or other
securities, as the case may be.
Section 25. NOTICES.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
DST Systems, Inc.
Attn.: Chief Legal Officer
333 West 11th Street
Kansas City, Missouri 64105
Facsimile: (816)435-8630
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
EquiServe Trust Company, N.A.
Attention: Client Relations
250 Royall Street
Canton, Massachusetts 02021
Facsimile: 781-575-4812
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date and subject to the penultimate sentence of
this Section 26, the Company and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of Rights Certificates. From and after the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement, amend, remove any
provision of this Agreement without approval of any holders of Rights in order:
(i) to cure any ambiguity; (ii) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein;
(iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, following the first occurrence of an
event set forth in clauses (i) and (ii) of the first proviso to Section 23(a)
hereof, shall be effective only if there are Independent Directors and shall
require the concurrence of a majority of such Independent Directors, or (iv) to
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, 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/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the Contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of 1/1,000ths of a share of Preferred Stock for
which a Right is exercisable. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock of the Company.
Section 27. 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 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock of the Company or any other class of capital stock of the
Company outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of the Company of which any Person is the Beneficial Owner, shall be made in
accordance with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors (and, where
specifically provided for herein, the Independent Directors) 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 the Company
(or, as expressly provided, the Independent Directors), or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for the purpose of clause (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board of Directors (or, as provided for, by the Independent Directors) in
good faith, shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties, and
(ii) not subject the Board of Directors or the Independent Directors to any
liability to any holder of the Rights Certificates.
Section 29. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give any Person other than
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and prior to the Distribution date the registered holders of the
Common Stock of the Company) any legal or equitable right, remedy or claim under
this Agreement; and this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights
Certificates (and prior to the Distribution Date the registered holders of the
Common Stock of the Company).
Section 30. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors. Without limiting the foregoing,
if any provision requiring the Independent Directors to act is held by any court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board of Directors
in accordance with applicable law and the Company's Certificate of Incorporation
and By-Laws.
Section 31. GOVERNING LAW.
This Agreement, each Rights Certificate and each Right issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State, except for Sections 18, 19, 20 and 21 hereof and relating to
the rights, duties and obligations of the Rights Agent, which shall be governed
by the laws of the State of Missouri without reference to its choice of law
rules.
Section 32. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
Section 34. FORCE MAJEURE.
Notwithstanding anything to the contrary contained herein, the Rights Agent
shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God,
terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or
malfunction of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor
difficulties, war, or civil unrest.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
- -------------------------------------- -----------------------------------------
[SEAL] DST SYSTEMS, INC.
Attest: By /s/ Randall D. Young
-----------------------------
Name: Randall D. Young
By /s/ Theresa Hursh Title: Vice-President, General
---------------------------- Counsel and Secretary
Name: Theresa Hursh
Title: Senior Counsel
- -------------------------------------- -----------------------------------------
[SEAL] EQUISERVE TRUST COMPANY, N.A.
Attest:
By: /s/ Dan Glennon By /s/ Carol Mulvey
----------------------------- -----------------------------
Name: Dan Glennon Name: Carol Mulvey
(please print) Title: Managing Director
Title: Account Manager
- -------------------------------------- -----------------------------------------
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
DST SYSTEMS, INC.
SERIES A PREFERRED STOCK
DST Systems, Inc., a corporation organized and existing under and by virtue
of The General and Business Corporation Law of Delaware, DOES HEREBY CERTIFY:
That at a meeting of the Board of Directors of DST Systems, Inc. the
following resolution was duly adopted creating shares of Preferred Stock,
designated as Series A Preferred Stock.
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation in accordance with the
provisions of the Certificate of Incorporation, as amended, a series
of Series A Preferred Stock of the Corporation be, and it hereby is
created, and the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special
rights of such series, and the qualifications, limitations or
restrictions thereof (in addition to the provisions set forth in the
Certificate of Incorporation, as amended, of the Corporation, which
are applicable to the Preferred Stock of all classes and series) are
as follows:
1. DESIGNATION AND AMOUNT. The shares of such series shall be designated as
"Series A Preferred Stock" and the number of shares initially constituting such
series shall be 100,000.
2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to any prior and superior rights of the holders of any
series of Preferred Stock ranking prior and superior to the shares of Series A
Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock shall be entitled prior to the payment of any dividends on
shares ranking junior to the Series A Preferred Stock to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $10.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of Common Stock, par value $0.01 per
share, of the Corporation (the "Common Stock") or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock, par value $.01 per share, of the Corporation (the "Common
Stock") since the immediately preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock. In the
event the Corporation shall at any time after October 18, 2005 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. Such adjustment shall be made
successively whenever such a dividend or change in the Common Stock is
consummated.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); PROVIDED, that in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $10.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each 1/1,000th share of Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters voted on at a meeting of the stockholders of
the Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, or (u) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each such
case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. Such adjustment shall be made
successively whenever such a dividend or change in the Common Stock is
consummated.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters voted on at a meeting of
stockholders of the Corporation.
(C) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of
capital stock of the Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of capital stock of the Corporation ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any capital stock of the Corporation ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock; provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity
stock in exchange for shares of any capital stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of capital stock
of the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner.
5. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
6. LIQUIDATION DISSOLUTION OR WINDING UP.
(A) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, no distribution shall be made on
any shares of capital stock of the Corporation that rank junior (whether as to
dividends or upon liquidation, dissolution or winding up) to Series A Preferred
unless prior thereto the holders of Series A Preferred Shares shall have
received an amount equal to 1,000 times the aggregate amount to be distributed
per share to holders of the common stock.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A liquidation preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
7. MERGER; CONSOLIDATION, ETC. In case the Corporation shall enter into any
merger, consolidation, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 1,000 times the aggregate amount of stock, securities, cash and/or
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then, in each such case, the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
8. NO REDEMPTION. The Series A Preferred Stock shall not be redeemable.
9. RANKING. The Series A Preferred Stock shall rank on a parity with all
other series of the Corporation's Preferred Stock as to the payment of dividends
and other distribution of assets, unless the terms of any such other series
shall provide otherwise.
10. AMENDMENT. The Certificate of Incorporation of the Corporation shall
not be further amended in any manner that would materially alter or change the
powers, preferences, rights, qualifications, limitations and restrictions of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of a majority or more of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
11. FRACTIONAL SHARES. Series A Preferred Stock may be issued in fractions
of a share, which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Preferred Stock.
IN WITNESS HEREOF, this Certificate of Designation is executed on behalf of
the Corporation by its President and attested by its Secretary this _____ day of
October, 2005.
DST SYSTEMS, INC.
By:
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Thomas A. McDonnell
President
ATTEST:
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Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF JACKSON )
Before me, the undersigned Notary Public in and for said county and state,
this day personally appeared , personally known to me to
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be the President of DST SYSTEMS, INC. and who executed the foregoing instrument
as President of DST Systems, Inc. and being first duly sworn, acknowledged
reading in full and fully understanding the foregoing, acknowledged the facts
therein stated to be true and correct, and who further acknowledged the
execution of the same as the voluntary act of the Corporation.
Witness my hand and seal this day of , 2005.
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Notary Public
My Commission Expires:
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
CERTIFICATE NO. R- RIGHTS
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NOT EXERCISABLE AFTER OCTOBER 17, 2015 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $ PER RIGHT ON THE TERMS SET FORTH IN THE
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RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS PRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
This certifies that , or
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registered assigns is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of , 2005
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(the "Rights Agreement") between DST Systems, Inc., a Delaware corporation (the
"Company"), and EquiServe Trust Company, N.A., a national banking association
(the "Rights Agent"), to purchase from the Company at any time prior to 5:00
P.M. (Kansas City, Missouri time) on at the principal office
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or offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, 1/1,000ths of a fully paid nonassessable share of the Series A
Preferred Stock (the "Preferred Stock"), of the Company, at a purchase price of
$ per 1/1,000ths of a share (the "Purchase Price"), upon presentation
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and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per 1/1,000ths share
set forth above, are the number and Purchase Price as of , 200 ,
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based on the Preferred Stock of the Company as constituted at such date.
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*The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
Upon the occurrence of a transaction listed in Section 11(a)(ii) (a
"Section 11(a)(ii) Event"), if the Rights evidenced by this Rights Certificate
are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate
of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who after such transfer, became an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a) (ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitation 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 above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office or offices the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of 1/1,000ths of a share of Preferred Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its options at a redemption
price of $0.0025 per Right.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of 1/1,000ths of a share of Preferred Stock), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Preferred Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to receive notice of
meetings or other action affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Right evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of this day of , 200 .
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[SEAL] DST SYSTEMS, INC.
By
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Thomas A. McDonnell
Title: President
ATTEST:
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Title: Secretary
Countersigned:
[RIGHTS AGENT]
By
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Authorized Signature
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED hereby sells,
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assigns and transfers unto
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(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
Attorney, to transfer the within
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Rights Certificate on the books of the within-named Company, with full power of
substitution.
Dated:
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Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
A. this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
B. after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:
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Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires
to exercise Rights represented
by the Rights Certificate)
To:
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The undersigned hereby irrevocably elects to exercise Rights
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represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the. Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number
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(Please print name and address)
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If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
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(Please print name and address)
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Dated: ,
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Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 200
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Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT C
DETAILED SUMMARY OF RIGHTS TO PURCHASE
SERIES A PREFERRED STOCK
On October 3, 2005, the Board of Directors (the "Board") of DST Systems,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of the Company's Common Stock, $0.01 par value per share (the
"Common Stock"), to the stockholders of record as of the close of business on
October 18, 2005 (the "Record Date"). Each Right entitles the registered holder
thereof to purchase from the Company 1/1,000ths of a share of Series A Preferred
Stock, par value 1.00 per share (the "Preferred Stock") (or in some
circumstances, Common Stock, other securities, cash or other assets, as
summarized below) at a price of $225.00 per share (the "Purchase Price"), (both
shares and price are subject to adjustment as described below). The complete
terms and conditions of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and EquiServe Trust Company, N.A., as
Rights Agent, dated as of October 10, 2005, as may be amended from time to time.
Capitalized terms not defined herein are defined in the Rights Agreement.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. Subject to certain exceptions specified in the Rights Agreement,
the Rights will separate from the Common Stock and a Distribution Date will
occur upon the earlier of (i) ten (10) business days following a public
announcement that a person or group of affiliated or associated persons has
acquired beneficial ownership of fifteen percent (15%) or more of the then
outstanding shares of Common Stock (each such person or group of affiliated or
associated persons referred to herein and in the Rights Agreement as an
"Acquiring Person"), or (ii) ten (10) business days following the commencement
of a tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person. As used herein and in the Rights Agreement, an
Independent Director means any member of the Board of Directors of the Company,
while such person is a member of the Board, who is not an Acquiring Person, an
Affiliate or Associate of an Acquiring Person, or a representative or nominee of
an Acquiring Person or of any such Affiliate or Associate.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business of the Distribution Date, and thereafter the separate Rights
Certificates alone will represent the Rights. Following the Distribution Date,
shares of Common Stock issued will be accompanied by Rights only in certain
instances.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 17, 2015, unless the Rights are earlier
redeemed by the Company as described below.
In the event that a Person becomes an Acquiring Person, except pursuant to
a tender or exchange offer for all outstanding shares of Common Stock which a
majority of the Independent Directors determines to be adequate and otherwise in
the best interests of the Company's stockholders, taking into consideration all
factors that such directors deem relevant (a "Permitted Offer"), each holder of
a Right will thereafter have the right to receive, upon exercise of the Right at
the then current Purchase Price, that number of shares of the Preferred Stock
(or in certain circumstances, Common Stock or assets or other securities of the
Company) having a market value of two times the Purchase Price. Notwithstanding
the foregoing, following the occurrence of the event set forth in this
paragraph, all Rights that are or were beneficially owned by any Acquiring
Person will be null and void.
For example, at a Purchase Price of $225.00, each Right not owned by an
Acquiring Person following an event set forth in the preceding paragraph would
entitle its holder to purchase $450.00 worth of Preferred Stock (or other
consideration, as noted above) for $225.00. Assuming that the Common Stock has a
current market value of $60.00, and the Preferred Stock has a current market
value of 1,000 times the current market value of the Common Stock, or
$60,000.00, at such time, the holder of each valid right would be entitled to
purchase .0075 shares of Preferred Stock, or the equivalent of 7.5 shares of
Common Stock, for $225.00.
In the event that, at any time following the Share Acquisition Date, (i)
the Company engages in a merger or other business combination transaction in
which the Company is not the surviving corporation, (ii) the Company engages in
a merger or other business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is changed or
exchanged, or (iii) fifty percent (50%) or more of the Company's assets, cash
flow or earning power is sold or transferred (in each case other than with an
entity which acquired the shares pursuant to a Permitted Offer), each holder of
a Right shall thereafter have the right to receive, upon exercise of the Right
at the then current Purchase Price, that number of shares of the common stock of
the acquiring company (or certain of its affiliates) that at the time of such
transaction would have a market value of two times the exercise price of the
Right. If the Rights are exercised to acquire the Preferred Stock, then the
Rights will not thereafter be exercisable to acquire the securities of any
Acquiring Person. The events set forth in this paragraph and in the second
preceding paragraph are referred to in the Rights Agreement as "Triggering
Events."
At any time until the Share Acquisition Date or the Final Expiration Date,
the Company may redeem the Rights in whole, but not in part, at a price of
$0.0025 per Right (the "Redemption Price"). Following the Share Acquisition
Date, but prior to an event listed in Section 13(a) of the Rights Agreement
(i.e. a merger, consolidation or sale of more than 50 percent of the assets or
earnings power of the Company and its subsidiaries), the Company may redeem the
Rights in connection with any event specified in Section 13(a) in which all
stockholders are treated alike and which does not include the Acquiring Person
or its Affiliates or Associates. In addition, the Company's right of redemption
may be reinstated following an inadvertent trigger of the Rights (as determined
by the Board) if an Acquiring Person reduces its
beneficial ownership to 10 percent or less of the outstanding shares of Common
Stock of the Company in a transaction or series of transactions not involving
the Company. Immediately upon the action of the Board electing to redeem the
Rights, the Company shall make announcement thereof, and upon such election, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending on the
circumstances, recognize taxable income in the event that the Rights become
exercisable for the Preferred Stock (or other securities, as the case may be) of
the Company or for common stock of an acquiring company or in the event of the
redemption of the Rights as set forth above.
The Purchase Price payable, and the number of shares of Preferred Stock (or
Common Stock, other securities, cash or other assets, as the case may be)
issuable upon exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) upon the grant to
holders of the Preferred Stock of certain rights or warrants to subscribe for
shares of the Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent (1%) in such Purchase Price. No fractional shares will be issued (other
than fractional shares which are integral multiples of 1/1,000ths of a share of
Preferred Stock) and, in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Stock on the last Trading Date prior to the
date of exercise.
Prior to the Distribution Date, the Board may amend or supplement any
provision of the Rights Agreement without the consent of the holders of the
Rights. Following the Distribution Date, the Board of Directors may amend the
provisions of the Rights Agreement in order to cure any ambiguity, to correct
any defect or inconsistency or to make changes deemed necessary or desirable, so
long as such changes do not adversely affect the interests of the holders of the
Rights (excluding the interests of any Acquiring Person and its affiliates and
associates). In any case, however, the Board of Directors may not amend or
supplement the Rights Agreement to change or supplement the Redemption Price,
Final Expiration Date, the Purchase Price or the number of 1/1,000ths of a share
of Preferred Stock for which a Right is exercisable.
The Rights may have the effect of impeding a change in control of the
Company without the prior consent of the Board, and the Rights could cause
substantial dilution to a person that attempts to acquire the Company without
conditioning the offer on redemption of the Rights by the Board or on the
acquisition by such person of a substantial number of Rights. The Rights
will not interfere with any Permitted Offer for all of the outstanding Common
Stock that has the approval of the Independent Directors.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to Amendment 10.1 to the Company's current
report on Form 8-K dated October , 2005. A copy of the Rights Agreement is
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available free of charge from the Company by written request to DST Systems,
Inc., 333 West 11th Street, Kansas City, Missouri 64105. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference. In the event of a conflict between this summary and the
Rights Agreement, the Rights Agreement will prevail.