Exhibit 4.1
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RIGHTS AGREEMENT
between
INVACARE CORPORATION
and
NATIONAL CITY BANK,
as Rights Agent
Dated July 8, 2005
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Table of Contents
Section 1. Certain
Definitions.............................................1
Section 2. Appointment of
Rights Agent.....................................6
Section 3. Issuance of
Rights..............................................6
Section 4. Form of Rights
Certificates.....................................8
Section 5. Countersignature
and Registration...............................9
Section 6. Transfer, Split
Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates...................................................10
Section 7. Exercise of
Rights; Purchase Price; Expiration Date of Rights..11
Section 8. Cancellation and
Destruction of Rights Certificates............12
Section 9. Reservation and
Availability of Capital Stock..................13
Section 10. Preferred Shares
Record Date...................................14
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.....21
Section 13. Consolidation, Merger
or Sale or Transfer of Assets or
Earning
Power..................................................22
Section 14. Fractional Rights and
Fractional Shares........................24
Section 15. Rights of
Action...............................................25
Section 16. Agreement of Rights
Holders....................................25
Section 17. Rights Certificate
Holder Not Deemed a Shareholder.............26
Section 18. Concerning the Rights
Agent....................................26
Section 19. Merger or
Consolidation or Change of Name of Rights Agent......27
Section 20. Duties of Rights
Agent.........................................27
Section 21. Change of Rights
Agent.........................................29
Section 22. Issuance of New Rights
Certificates............................30
Section 23.
Redemption.....................................................30
Section 24.
Exchange.......................................................31
Section 25. Notice of Certain
Events.......................................32
Section 26.
Notices........................................................33
Section 27. Supplements and
Amendments.....................................34
Section 28.
Successors.....................................................35
Section 29. Actions by the Board,
etc......................................35
Section 30. Benefits of this
Agreement.....................................35
Section 31.
Severability...................................................35
Section 32. Governing
Law..................................................35
Section 33.
Counterparts...................................................36
Section 34. Descriptive
Headings...........................................36
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RIGHTS AGREEMENT
RIGHTS
AGREEMENT, dated July
8, 2005 (the
"Agreement"), between
INVACARE
CORPORATION, an Ohio corporation (the "Company"), and NATIONAL CITY BANK, a
national banking association, as Rights
Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS,
effective July 8, 2005
the Board of Directors of the Company (the
"Board") authorized and declared a dividend
distribution of one
Right for each
Common Share (as hereinafter defined) and for each Class B Common
Share (as
hereinafter defined) outstanding at the close
of business on July 19, 2005 (the
"Record Date"), and authorized the issuance of one Right (as such
number may
hereinafter be adjusted pursuant to the provisions of
Section 11(i) or Section
11(p) hereof) for each Common Share and
Class B Common Share issued between the
Record Date (whether originally issued or
delivered from the Company's treasury)
and the earlier to occur of the
Distribution
Date or the
Expiration
Date (as
such terms are hereinafter defined), each
Right initially representing the right
to purchase one one-thousandth of a Series A Participating Serial Preferred
Share of the Company having the rights,
powers and preferences
set forth in the
form of Certificate of Amendment
attached hereto as Exhibit A, upon the
terms
and subject to the conditions hereinafter
set forth (the "Rights");
NOW, THEREFORE,
in consideration of
the premises and the mutual agreements
herein set forth, the parties hereby agree
as follows:
Section
1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together
with
all Affiliates and Associates of such
Person, shall be the
Beneficial Owner
of
Company Common Shares representing 30% or more of the
total voting power of the
Company then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any
employee benefit or share ownership plan of
the Company or of any Subsidiary of the
Company, or (iv) any
Person organized,
appointed or established by the Company for
or pursuant to the terms of any such
plan. Notwithstanding the foregoing, (x) no Person shall become an
"Acquiring
Person" solely as the result of an
acquisition of Company
Common Shares by the
Company (including, without limitation, any
acquisition of fractional shares in
connection with any combination of the Company Common Shares into a smaller
number of shares) which, by reducing the
number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person
to shares
representing 30% or more of the total voting power of the Company then
outstanding; provided, however, that if a Person shall become the
Beneficial
Owner of shares representing 30% or more of the total voting power of the
Company then outstanding solely as the result of an acquisition of Company
Common Shares by the Company and shall,
following written notice from, or public
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disclosure by, the Company of such share
purchases by the Company become the
Beneficial Owner of any additional Company Common Shares and shall then
beneficially own shares representing 30% or more of the total voting
power of
the Company then outstanding, then such Person shall be deemed to be an
"Acquiring Person" and (y) if the Board
determines in good
faith that a Person
who would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a),
has become such inadvertently, and
such Person divests as promptly as
practicable
(as determined in good
faith by
the Board of Directors), following receipt
of written notice from the Company of
such event, of Beneficial Ownership of a sufficient
number of Company
Common
Shares so that such Person would no longer
be an "Acquiring
Person," as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement unless and until such Person
shall again become an "Acquiring Person."
(b) "Act" shall
mean the Securities Act of 1933, as amended.
(c) "Affiliate"
and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of
this Agreement,
provided, however,
that a Person will not be deemed to be the
Affiliate or Associate of another
Person solely because either or both Persons are or were Directors of the
Company.
(d) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(e) "Agreement"
shall mean this Rights Agreement as originally executed or
as it may from time to time be supplemented, amended, renewed, restated or
extended pursuant to the applicable
provisions hereof.
(f) A Person
shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates,
directly or indirectly, owns or has the right to acquire
(whether such
right is exercisable immediately or only after the passage of
time) pursuant
to any agreement,
arrangement or understanding (other than
customary
agreements
with and between underwriters and selling group
members with
respect to a bona fide public offering of securities), whether
or not in
writing, or upon the
exercise of
conversion
rights, exchange
rights, other
rights, warrants or options, or otherwise; provided, however,
that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially
own," (A) securities tendered pursuant to a tender or
exchange
offer made by or on
behalf of such Person or any of such Person's
Affiliates or
Associates until such
tendered securities
are accepted for
purchase or
exchange, or (B) securities issuable upon exercise of Rights at
any time prior
to the occurrence of a Triggering Event, or (C) securities
issuable
upon exercise of Rights from and after the occurrence of a
Triggering
Event which Rights
were acquired by such
Person or any of such
Person's
Affiliates
or Associates prior to the Distribution Date or
pursuant to
Section 3(a) or
Section 22 hereof (the
"Original Rights")
or
pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any
Original Rights;
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(ii) which
such Person or any of such Person's Affiliates or
Associates,
directly or
indirectly, has the right to vote or dispose of or
has "beneficial
ownership" of (as
determined pursuant to Rule 13d-3 of the
General Rules
and Regulations under
the Exchange Act, or any comparable or
successor
rule), including pursuant to any agreement, arrangement or
understanding
(other
than
customary
agreements
with
and between
underwriters
and selling
group members with
respect to a bona fide public
offering of
securities), whether or not in writing; provided, however, that
a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially
own,"
any security under this subparagraph (ii) as a result of an
agreement,
arrangement
or understanding to vote such security if such
agreement,
arrangement or understanding: (A) arises solely from a
revocable
proxy
or consent given in response to a public proxy or consent
solicitation
made pursuant to, and in accordance with, the applicable
provisions of
the General Rules and Regulations under the Exchange Act, and
(B) is not then
reportable
by such Person on Schedule 13D under the
Exchange Act (or
any comparable or successor report); or
(iii) which are
beneficially owned,
directly or
indirectly, by any
other Person (or
any Affiliate or Associate thereof) with which such Person
(or any of such
Person's Affiliates or Associates) has any agreement,
arrangement
or understanding (other than customary agreements with and
between
underwriters and
selling group members with respect to a bona fide
public offering
of securities) whether
or not in writing, for
the purpose
of acquiring,
holding, voting (except pursuant to a revocable
proxy or
consent as described in the
proviso to subparagraph (ii) of this paragraph
(f)) or
disposing of any voting securities of the Company.
For all
purposes of this Agreement, any calculation of the number of
Company Common
Shares outstanding at
any particular
time, including for
purposes of
determining the particular percentage of the total voting power
of the Company
represented
by such outstanding Company Common Shares of
which any Person
is the Beneficial Owner, shall be made in accordance
with
the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and
Regulations
under the Exchange Act as in effect on the date hereof.
(g) "Board"
shall mean the Board of Directors of the Company, as it may be
comprised from time to time.
(h) "Business Day" shall mean any day other than
a Saturday, Sunday or
a
day on which banking institutions in the State of Ohio are authorized or
obligated by law or executive order to
close.
(i) "Class B Common
Shares" shall mean the Class B Common Shares, without
par value, of the Company or any other
shares of capital
stock of the
Company
into which such shares shall be
reclassified or changed after the date hereof.
(j) "Close of
business" on any given date shall mean 5:00 p.m., Cleveland,
Ohio time, on such date; provided,
however, that if such
date is not a Business
Day it shall mean 5:00 p.m., Cleveland, Ohio time, on the next succeeding
Business Day.
(k) "Common
Shares" when used with reference to the Company, shall mean the
Common Shares, without par value, of the
Company or any other shares of capital
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stock of the Company into which such shares
shall be reclassified or changed
after the date hereof. "Common Shares,"
when used with reference to any Person
organized in corporate form other than the
Company, shall mean (i) the capital
stock or other equity interest in such
Person with the greatest voting power,
(ii) the equity securities or other equity
interest having power to control or
direct the management of such Person or
(iii) if such Person is a Subsidiary (as
hereinafter defined) of another Person, the
capital stock, equity securities of,
or other equity interest in, the Person or
Persons which ultimately control such
first-mentioned Person and which has issued
any such outstanding capital stock,
equity securities or equity interest.
"Common Shares," when used with reference
to any Person not organized in corporate
form, shall mean units of beneficial
interest which (x) represent the right to
participate generally in the profits
and losses of such Person (including
without limitation any flow-through tax
benefits resulting from an ownership
interest in such Person) and (y) are
entitled to exercise the greatest voting
power of such Person or, in the case of
a limited partnership, have the power to
remove the general partner or partners.
(l) "Common
share equivalents"
shall have the meaning set forth in Section
11(a)(iii) hereof.
(m) "Company" shall have the meaning set forth
in the first paragraph
of
this Agreement until a successor
corporation or entity shall have become such or
until a Principal Party (as hereinafter
defined) shall assume, and thereafter be
liable for, all obligations and duties of
the Company hereunder
pursuant to the
applicable provisions of this Agreement,
and thereafter,
"Company" shall
mean
such successor or Principal Party,
respectively.
(n) "Company
Common Shares" shall mean the Common Shares and
the Class B
Common Shares.
(o) "Current market price" shall have the meaning set forth in Section
11(d)(i) hereof.
(p) "Current
Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(q) "Distribution Date" shall have the meaning set
forth in Section
3(a)
hereof.
(r) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.
(s) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(t) "Exchange Ratio" shall have the meaning
set forth in Section
24(a)
hereof.
(u) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(v) "Final
Expiration
Date" shall mean the close of
business on July
8,
2015.
(w) "Person"
shall mean any
individual, firm,
corporation,
partnership,
trust or other entity.
(x) "Preferred
Shares" shall mean
Series A Participating
Serial Preferred
Shares, without par value, of the Company
having the rights and preferences set
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forth in the form of Certificate of Amendment attached to this Agreement as
Exhibit A and, to the extent that there is
not a sufficient
number of shares of
Series A Participating Serial Preferred Shares authorized to permit the full
exercise of the Rights, any other series of
Preferred Shares, without par value,
of the Company designated for such purpose containing terms substantially
similar to the terms of the Series A
Participating Serial Preferred Shares.
(y) "Principal Party" shall have the meaning set forth
in Section 13(b)
hereof.
(z) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(aa) "Record Date" shall have the meaning set
forth in the WHEREAS
clause
at the beginning of this Agreement.
(bb)
"Redemption
Date" shall have the
meaning set forth in
Section 7(a)
hereof.
(cc)
"Redemption
Price" shall have the
meaning set forth in Section 23(a)
hereof.
(dd) "Rights"
shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.
(ee) "Rights
Agent" shall mean the Person named as the
"Rights Agent" in
the first paragraph of this Agreement until
a successor Rights
Agent shall have
become such pursuant to the applicable
provisions hereof, and thereafter "Rights
Agent" shall mean such successor Rights
Agent. If at any time there is more than
one Person appointed by the Company as Rights
Agent pursuant to the
applicable
provisions of this Agreement, "Rights Agent" shall mean and include each
such
Person.
(ff) "Rights
Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(gg) "Section
11(a)(ii) Event" shall
have the meaning set forth in Section
11(a)(ii) hereof.
(hh) "Section
11(a)(ii) Trigger Date" shall have the
meaning set forth in
Section 11(a)(iii) hereof.
(ii) "Section 13
Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(jj)
"Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition,
shall include,
without
limitation, a report filed pursuant to Section
13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such;
provided, however that, if such Person is
deemed not to be an Acquiring Person
pursuant to clause (y) of Section 1(a)
hereof, no Share
Acquisition Date
shall
be deemed to have occurred.
(kk)
"Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
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(ll)
"Subsidiary" shall mean, with reference to any Person, any
corporation
or other entity of which an amount of
voting securities
sufficient to elect
at
least a majority of the directors (or
comparable
body) of such
corporation or
other entity is beneficially owned,
directly or
indirectly, by such
Person, or
otherwise controlled by such Person.
(mm)
"Substitution
Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(nn)
"Trading Day" shall have the meaning
set forth in Section
11(d)(i)
hereof.
(oo)
"Triggering
Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2.
Appointment of Rights
Agent. The Company
hereby appoints the
Rights Agent to act as agent for the
Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall,
prior to the Distribution Date, also
be the holders of the Company Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby
accepts such
appointment. The
Company may from time to time act as a
Co-Rights Agent or appoint one or more
Co-Rights Agents as it may deem necessary
or desirable. Any actions which may be
taken by the Rights Agent pursuant to the terms of this
Agreement may be
taken
by any such Co-Rights Agent. To the extent that any Co-Rights
Agent takes any
action pursuant to this Agreement,
such Co-Rights Agent
will be entitled to all
of the rights and protections of, and subject to all of the
applicable duties
and obligations imposed upon, the Rights Agent pursuant to the terms of this
Agreement.
Section 3.
Issuance of Rights.
(a) Until the
earlier of (i) the close of business on the tenth Business
Day (or such later date as may be determined by the Board) after the Share
Acquisition Date (or, if the tenth Business
Day after the Share Acquisition Date
occurs before the Record Date,
the close of business
on the Record Date),
or
(ii) the close of business on the tenth
Business Day (or such
later date as may
be determined by action of the Board) after the
date that a tender or exchange
offer by any Person (other than the
Company, any
Subsidiary of the Company, any
employee benefit or share ownership plan of
the Company or of any Subsidiary of
the Company, or any Person organized, appointed or established by the
Company
for or pursuant to the terms of any such plan) is
first published
or sent or
given within the meaning of Rule 14d-2 of the
General Rules and Regulations
under the Exchange Act, if, upon
consummation thereof,
such Person would be the
Beneficial Owner of shares representing 30%
or more of the total voting power of
the Company then outstanding, (the earlier
of (i) and (ii) being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced by the
certificates for the Company Common Shares registered in the names of the
holders of the Company Common Shares (which certificates for Company Common
Shares shall be deemed also to be Rights Certificates) and not by separate
certificates, and (y) the Rights will be
transferable
only in connection
with
the transfer of the underlying Company Common Shares (including a transfer to
the Company). As soon as practicable
after the Distribution
Date, the Company
will prepare and execute, and the Rights Agent will countersign and send by
first-class, insured, postage prepaid mail,
to each record holder of the Company
Common Shares as of the close of
business on the Distribution Date, at the
address of such holder shown on the records
of the Company,
one or more rights
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certificates, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each Company Common Share so held,
subject to adjustment as provided
herein. With respect to certificates for
the
Company Common Shares outstanding as of the close of business on the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Company Common Shares and the registered holders of the
Company Common Shares shall also be the
registered
holders of the
associated
Rights. In addition, in connection with the issuance or
sale of Company Common
Shares following the Distribution Date and
prior to the redemption or expiration
of the Rights, the Company (i) shall,
with respect to
Company Common Shares so
issued or sold pursuant to the exercise of share
options or under any
employee
benefit plan or arrangement, or upon the exercise, conversion or exchange of
securities granted or issued by the Company
prior to the Distribution Date, and
(ii) may, in any other case, if deemed
necessary or
appropriate
by the Board,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (x) no such
Rights Certificate shall be issued if, and to the extent that, the Company
determines, after receiving advice from
counsel, that such issuance would create
a significant risk of material adverse tax consequences to the Company or
the
Person to whom such Rights Certificate would be issued,
and (y) 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.
In the event
that an adjustment in the number of Rights per
Company Common
Share has been
made pursuant to Sections 11(i) or 11(p)
hereof, at the time of
distribution of
the Rights Certificates, the Company shall make the
necessary and
appropriate
rounding adjustments (in accordance with Section 14(a) 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 the
Rights Certificates.
(b) As promptly
as practicable
following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form attached hereto as Exhibit C, by
first-class,
postage
prepaid mail, to each record holder of the
Company Common Shares as of the close
of business on the Record Date, at the address of such holder shown on the
records of the Company. The failure to send a copy of the Summary of Rights
shall not affect the enforceability of any part of this
Rights Agreement or the
rights of any holder of the Rights.
(c) Rights shall
be issued (i) in respect of all Company Common Shares that
are issued (either as an original issuance
or from the Company's treasury) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date and (ii) in connection with the issuance or sale of Company
Common Shares following the Distribution Date and prior to the redemption or
expiration of the Rights (x) with respect
to Company Common
Shares so issued or
sold pursuant to the exercise of share
options or under any
employee benefit
plan or arrangement, or upon the exercise,
conversion or exchange of securities,
granted or issued by the Company prior to the Distribution Date and (y) with
respect to Company Common Shares so issued or sold in
any other case, if deemed
necessary or appropriate by the Board.
Certificates
representing
such Company
Common Shares (including, without
limitation,
certificates issued upon transfer
or exchange of Company Common Shares) shall also be deemed to be
certificates
for Rights, and shall bear the following
legend:
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This certificate
also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between
Invacare Corporation
(the "Company") and
National City Bank (the "Rights Agent") dated July 8, 2005,
as the same may be amended, restated or renewed from time to
time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by
reference and a copy
of which is on
file at the principal offices of the Company. Under certain
circumstances, as set
forth in the Rights
Agreement, such
Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the
Rights
Agreement, as in
effect on the date of mailing, without
charge within five
business days after receipt of a written
request therefor.
Under certain
circumstances set forth in
the Rights
Agreement,
Rights issued to, or held by, any
Person who is, was or
becomes an
Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights
Agreement),
whether currently held by or on
behalf of such
Person or by any subsequent holder, may
become null and void.
With respect to such certificates containing the foregoing
legend, until the
earlier of (i) the Distribution Date and (ii) the Expiration
Date, the Rights
associated with the Company Common Shares
represented by such certificates shall
be evidenced by such certificates alone and
registered holders of Company Common
Shares shall also be the registered holders of the associated Rights.
Notwithstanding this Section 3(c), the
omission of a legend shall not affect the
enforceability of any part of this Rights
Agreement or the rights of any holder
of the Rights.
(d) Until the
earlier of the Distribution Date and the Expiration Date, the
transfer of any certificates representing Company Common Shares in respect
of
which Rights have been issued shall also
constitute
the transfer of the
Rights
associated with such Company Common Shares. In the event that the Company
purchases or acquires any Company
Common Shares after
the Record Date but prior
to the Distribution Date, any Rights associated with
such Company Common Shares
shall be deemed cancelled and retired so that the
Company shall not be entitled
to exercise any Rights associated with the Company Common Shares which are no
longer outstanding.
Section 4. Form
of Rights Certificates.
(a) The
Rights Certificates (and the forms of election to purchase,
certification and assignment to be printed
on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B
hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem
appropriate and as are
not inconsistent
with the provisions of this Agreement,
or as may be required
to comply with any
applicable law or with any rule or
regulation made pursuant thereto or with any
rule or regulation of any stock exchange or
over-the-counter market on which the
Rights may from time to time be listed,
or to conform to
usage. Subject to
the
provisions of Sections 7, 11 and 22 hereof,
the Rights
Certificates,
whenever
distributed, shall entitle the holders thereof to purchase such number of
one
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one-thousandths of a Preferred Share as shall be
set forth therein at the price
set forth therein (such exercise price per
one one-thousandth
of a share,
the
"Purchase Price"), but the amount and type of
securities purchasable
upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any (x)
Rights Certificate
issued pursuant to Section 3, Section 11(i)
or Section 22 hereof that represents Rights
beneficially owned by
persons known
to be: (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring
Person (or of any such
Associate or
Affiliate) who becomes a transferee
after the Acquiring
Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior
to or concurrently
with the Acquiring
Person becoming such and receives such
Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing
agreement,
arrangement
or understanding
(whether or not in writing) regarding the transferred
Rights or (B) a
transfer
which the Board has determined is part of a
plan, arrangement or
understanding
(whether or not in writing) that has as a
primary purpose or effect avoidance of
Section 7(e) hereof, and (y) any Rights
Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer,
exchange, replacement or adjustment of
any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented
by this Rights
Certificate
are or
were beneficially
owned by a Person
who was or
became an
Acquiring Person
or an Affiliate or Associate of an
Acquiring Person (as
such terms are
defined in the
Rights
Agreement).
Accordingly, this
Rights Certificate
and the
Rights represented
hereby may become
null and void in
the
circumstances specified in Section 7(e) of such Agreement.
The provisions of Section 7(e) hereof
shall be operative whether or not the
foregoing legend is contained on any such
Rights Certificate.
Section 5.
Countersignature and Registration.
(a) The Rights
Certificates
shall be executed on
behalf of the Company by
its Chairman of the Board, President or any Vice President,
either manually or
by facsimile signature, and shall have affixed thereto the
Company's seal or a
facsimile thereof, which shall be attested by the
Secretary or an Assistant
Secretary of the Company, either manually
or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights Agent
and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the
Rights Certificates
shall cease to be
such officer of the Company
before countersignature by the Rights Agent and
issuance and delivery by the Company,
such Rights
Certificates,
nevertheless,
may be countersigned by the Rights Agent
and issued and delivered by the Company
with the same force and effect as though
the person who signed such Rights
Certificates had not ceased to be such officer
of the Company;
and any Rights
Certificates may be signed on behalf of the
Company by any person
who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights
Certificate, although
at the date of
the execution of this Rights Agreement any
such person was not such an officer.
(b) Following
the Distribution
Date, the Rights Agent
shall keep or cause
to be kept, at its office designated as the appropriate
place for surrender
of
Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued
hereunder. Such books
shall show the
names and addresses of the respective
holders of the Rights
Certificates,
the
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number of Rights evidenced on its face by
each of the Rights
Certificates, the
Rights Certificate number and the date of
each of the Rights Certificates.
Section
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to
the provisions of Section 4(b), Section 7(e) and Section 14
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 Certificate
or Certificates (other than Rights Certificates representing Rights that have
become void pursuant to Section 7(e) hereof
or that have been exchanged pursuant
to Section 24 hereof) may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates,
entitling the
registered holder to
purchase a like number of one one-thousandths of a Preferred Share (or,
following a Triggering Event, Common Shares, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights
Agent, and shall surrender the Rights
Certificate or Certificates to be
transferred, split up,
combined or exchanged,
with the form of assignment and certificate appropriately executed, at the
office 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 imposed in
connection with any
transfer, split up, combination or exchange
of Rights Certificates.
(b) Upon receipt
by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss,
theft, destruction or mutilation of a
Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and
reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and
cancellation
of the Rights
Certificate
if
mutilated, the Company will execute and
deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
10
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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 Section 9(c), Section 11(a)(iii) and Section 23
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 and
the certificate on the reverse side
thereof duly executed,
to the Rights Agent
at the office of the Rights Agent
designated
for such purpose, together with
payment of the aggregate Purchase Price with respect to the
total number of one
one-thousandths of a Preferred Share (or
other shares, securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i)
the Final Expiration Date, (ii)
the time at which the Rights are
redeemed as provided
in Section 23 hereof (the
"Redemption Date") and (iii) the time at which
such Rights
are exchanged as
provided in Section 24 hereof (the
earliest of (i), (ii)
and (iii) being herein
referred to as the "Expiration Date").
(b) The Purchase
Price for each one
one-thousandth
of a Preferred
Share
pursuant to the exercise of a Right shall initially be $180.00 and shall be
subject to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in lawful
money of the United
States of America
in
accordance with paragraph (c) below.
(c) Upon receipt
of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to
each Right so exercised, of the Purchase
Price per one one-thousandth of a Preferred
Share (or other shares, securities,
cash or other assets, as the case may be)
to be purchased and an amount equal to
any applicable transfer tax, the Rights Agent
shall, subject to
Section 20(k)
hereof, thereupon promptly (i) (A) requisition
from any transfer
agent of the
Preferred Shares (or make available,
if the Rights Agent is
the transfer agent
for such shares) certificates for the total number
of one one-thousandths
of a
Preferred Share to be purchased and the
Company hereby
authorizes its transfer
agent to comply with such requests,
or (B) if the Company
shall have elected to
deposit the total number of Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent,
requisition from the
depositary agent
depositary receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such
receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby
directs the depositary
agent to comply with such requests, (ii)
requisition from the Company the amount
of cash, if any, to be paid in lieu of
fractional
shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to
or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may
be
designated by such holder, and (iv) after
receipt thereof, deliver such cash, if
any, to or upon the order of the registered
holder of such Rights
Certificate.
The payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) may be made in cash or by
certified bank check or
money order payable to the order of the
Company. In the event
that the Company
is obligated to issue other securities
(including Common Shares) of the Company,
pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the
Company shall make all arrangements necessary so that such other
securities,
cash and/or other property are available
for distribution
by the Rights
Agent,
if and when appropriate.
11
<page>
(d) In case the
registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby,
a new Rights Certificate evidencing
Rights equivalent to the Rights
remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order
of, the registered
holder of
such Rights Certificate, registered in such name or names
as may be designated
by such holder, subject to the provisions
of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and
after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring
Person, (ii) a transferee of an Acquiring
Person (or of any such
Associate or
Affiliate) who becomes a transferee
after the Acquiring
Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior
to or concurrently
with the Acquiring
Person becoming such and receives such
Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
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 has determined is part of a
plan, arrangement or
understanding
(whether or not in writing) that has as a
primary purpose or effect avoidance of
this Section 7(e), shall become null and void without
any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of
this Agreement or
otherwise. No
Rights
Certificate shall be issued at any time upon
the transfer
of any Rights to
an
Acquiring Person whose Rights would be void
pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Rights Certificate delivered to the
Rights Agent for transfer to an Acquiring
Person or any
Associate or
Affiliate
thereof whose Rights would be void pursuant
to the preceding
sentence shall be
cancelled. 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 hereunder.
(f)
Notwithstanding anything in this Agreement to the contrary, neither
the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the
occurrence of any purported transfer or
exercise as set forth in this Section 7
unless such registered holder shall have
(i) completed and signed the certificate following the form of assignment
or
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such assignment or exercise,
and (ii) provided such
additional
evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or
any Affiliates or Associates thereof as the
Company 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 shall, if
surrendered to the Company or any of
its agents, be delivered to the Rights Agent
for cancellation
or in cancelled
form, or, if surrendered to the Rights Agent,
shall be cancelled by
it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this
Agreement. The Company
shall deliver
to the Rights Agent for cancellation and
retirement, and the
Rights Agent shall
12
<page>
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 cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such
cancelled Rights Certificates, and in such
case shall deliver a certificate of
destruction thereof to the Company.
Section 9.
Reservation and Availability of Capital Stock.
(a) The Company
covenants and agrees
that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued Common Shares and/or other
securities
or out of its
authorized
and
issued shares held in its treasury), the number of Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) that, as provided in this
Agreement including
Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of
all outstanding
Rights.
(b) So long as
the Preferred Shares
(and, following
the occurrence of a
Section 11(a)(ii) Event, Common Shares and/or other
securities)
issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange or automated quotation system, the Company shall use its
commercially reasonable efforts to cause,
from and after such time as the Rights
become exercisable, all shares reserved for such
issuance to be so listed upon
official notice of issuance upon such
exercise.
(c) The Company
shall use its commercially reasonable efforts to (i)
file,
as soon as practicable following the
earliest date after the first occurrence of
a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been
determined
in accordance with
Section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a
registration statement
under the Act,
with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such
registration statement
to become effective as
soon as practicable after such filing,
(iii) cause such
registration
statement
to remain effective (with a prospectus at
all times meeting the requirements of
the Act) until the earlier of (A) the date as of
which the Rights are no longer
exercisable for such securities, and (B) the Expiration
Date, and (iv)
obtain
such other regulatory approvals as may be necessary for
it to issue securities
purchasable upon the exercise of the Rights.
The Company
will also take
such
action as may be appropriate under, or to
ensure compliance with, the securities
or "blue sky" laws of the various states in
connection with the
exercisability
of the Rights. The Company may temporarily
suspend, for a period
of time not to
exceed ninety (90) days after the date set forth in clause
(i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective
or to obtain any other required regulatory approval in connection with the
exercisability of the Rights. Upon any such
suspension, the
Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite registration or qualification in such
jurisdiction shall have been effected or
obtained.
13
<page>
(d) The Company
covenants and agrees that it will take all
such action as
may be necessary to ensure that all one
one-thousandths
of a Preferred
Share
(and, following the occurrence of a
Triggering Event, Common Shares and/or other
securities) delivered upon proper exercise of Rights shall, at the time of
delivery of the certificates for such
shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company
further covenants and
agrees that it will pay when due and
payable any and all federal and state
transfer taxes and charges that may be
payable in respect of the issuance or
delivery of the Rights Certificates and of
any certificates for a number of one
one-thousandths
of a Preferred Share
(or
Common Shares and/or other securities,
as the case may be)
upon the exercise of
Rights. The Company shall not, however,
be required (i) to pay
any transfer tax
that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the
issuance or delivery of a number of
one one-thousandths of a Preferred Share (or Common Shares and/or other
securities, as the case may be) in
respect of 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 a number of one
one-thousandths of a Preferred Share (or Common
Shares and/or other securities,
as the case may be) in a name other than
that of the registered
holder upon the
exercise of any Rights until such tax shall have been
paid (any such tax being
payable by the holder of such Rights
Certificate
at the time of
surrender) or
until it has been established to the
Company's satisfaction
that no such tax is
due.
Section 10.
Preferred Shares Record Date. Each Person in whose name any
certificate for a number of one
one-thousandths of a
Preferred Share (or Common
Shares and/or other securities,
as the case may be) is
issued upon the exercise
of Rights shall for all purposes be deemed to have become
the holder of record
of such fractional Preferred Shares (or Common Shares
and/or other
securities,
as the case may be) represented thereby on,
and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered with the forms of election
and certification duly executed and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such
surrender and payment is a date upon
which the Preferred Shares (or Common Shares
and/or other
securities,
as the
case may be) transfer books of the Company are
closed, such Person shall be
deemed to have become the record holder of
such shares (fractional or otherwise)
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Shares (or Common Shares
and/or other
securities,
as the
case may be) transfer books of the Company are open.
Prior to the exercise
of
the Rights evidenced thereby, the holder of
a Rights Certificate, as such, shall
not be entitled to any rights of a
shareholder
of the Company
with respect to
securities 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.
14
<page>
(a) (i) In the event the Company
shall at any time
after the date of this
Agreement
(A) declare a dividend on the Preferred Shares payable in
Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the
outstanding Preferred
Shares into a smaller
number of shares,
or (D) issue any
shares of its capital stock in a reclassification of the
Preferred Shares
(including any such
reclassification in connection with a
consolidation or
merger in which the Company is the continuing or surviving
corporation),
except as otherwise provided in this Section 11(a) and
Section 7(e)
hereof, the Purchase Price in effect at the time of the record
date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of Preferred
Shares or shares
of capital stock,
as the case may be,
issuable on such
date,
shall be proportionately adjusted so that the holder of any
Right
exercised after
such time shall be entitled to receive, upon payment of the
Purchase Price
then in effect, the
aggregate number and
kind of Preferred
Shares or shares
of capital stock, as the case may be, which, if such Right
had been
exercised immediately prior to such date and at a time
when the
Preferred
Shares transfer books of the Company were open,
he would have
owned upon such
exercise and been entitled to receive by virtue of such
dividend,
subdivision, combination or reclassification. If an event occurs
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) hereof.
(ii) In the event
that any Person, alone or together with its
Affiliates or
Associates, becomes an
Acquiring Person,
then, subject to
Section
24 of this Agreement, promptly following the later of the
occurrence of
the Share Acquisition
Date and the
Distribution Date
(such
event is
referred to herein as a "Section 11(a)(ii) Event"), proper
provision
shall be made so that
each holder of a Right (except as provided
below
and in Section 7(e) hereof) shall thereafter have the right to
receive
(subject to the last
sentence of Section 23(a)), upon exercise of
such Right at
the then current
Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of one one-thousandths of a
Preferred
Share, such number of Common Shares of the Company that
equals
the result
obtained by (x)
multiplying the then current Purchase Price by
the then number
of one one-thousandths
of a Preferred Share for which a
Right
was exercisable immediately prior to the first occurrence of a
Section
11(a)(ii) Event,
and (y) dividing that
product (which,
following
such first
occurrence,
shall thereafter be referred to as the
"Purchase
Price" for each
Right and for all purposes of this Agreement) by 50% of the
current
market price
(determined
pursuant to Section
11(d) hereof) per
Common Share on
the date of such first
occurrence (such
number of shares,
the "Adjustment
Shares").
(iii) In the
event that the number of Common Shares that are
authorized by
the Company's Articles
of Incorporation but
not outstanding
or reserved
for issuance for purposes other than upon exercise of the
Rights are not
sufficient
to permit the exercise
in full of the Rights in
accordance with
the foregoing
subparagraph (ii) of this Section 11(a), the
Company shall:
(A) determine the
excess of (1) the value of the Adjustment
Shares issuable
upon the exercise of a Right (the "Current Value") over (2)
the Purchase
Price (such excess,
the "Spread"), and (B) with respect to
each Right,
make adequate provision to substitute for the Adjustment
Shares,
upon payment of the
applicable
Purchase Price, (1) cash, (2) a
reduction in (or
repayment of) the Purchase Price, (3) Common Shares or
other equity
securities
of the Company
(including,
without limitation,
15
<page>
preferred
shares, or units of preferred shares, which the Board has deemed
to have the same
value as Common Shares
(such preferred
shares, "common
share
equivalents")), (4) debt securities of the Company, (5) other
assets,
or (6) any
combination of the foregoing, having an aggregate value equal
to
the Current
Value, where such
aggregate value has
been determined by
the
Board based upon
the advice of a nationally recognized investment banking
firm
selected by the Board;
provided, however, if the Company shall not
have made
adequate provision to
deliver value pursuant to clause (B) above
within thirty
(30) days following the later of (x) the first occurrence of
a Section
11(a)(ii) Event and
(y) the date on which the Company's right of
redemption
pursuant to Section 23(a) expires (the later of (x) and (y)
being referred
to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be
obligated to deliver, upon the surrender for exercise of a
Right and
without requiring
payment of the
Purchase Price, Common
Shares
(to the extent
available) and then, if necessary, cash, which shares and/or
cash have an
aggregate value equal to the Spread. If the Board shall
determine in
good faith that it is likely that sufficient additional Common
Shares
could be authorized for issuance upon exercise in full of the
Rights,
the thirty
(30) day period set
forth above may be extended to the
extent
necessary,
but not more than
ninety (90) days after the Section
11(a)(ii)
Trigger Date, in order that the Company
may seek shareholder
approval for the
authorization of such
additional shares
(such period, as
it may be
extended, the "Substitution Period"). To the extent that the
Company
determines that some action needs to be taken pursuant to the
first
and/or second
sentences of this Section 11(a)(iii), the Company (x) shall
provide,
subject to Section
7(e) hereof, that such action shall apply
uniformly to all
outstanding Rights, and (y) may suspend the exercisability
of the Rights
until the expiration of the Substitution Period in order to
seek
any authorization of additional shares and/or to decide the
appropriate form
of distribution to be made pursuant to such first sentence
and to determine
the value thereof.
In the event of any
such suspension,
the Company shall issue a public announcement stating that the
exercisability
of the Rights has been temporarily suspended, as well as a
public
announcement at such
time as the suspension is no longer in effect.
For purposes of
this Section
11(a)(iii),
the value of the
Common Shares
shall be the
current market price (as determined pursuant to Section 11(d)
hereof) per
Common Share on the
Section 11(a)(ii) Trigger Date and the
value of any
"common share equivalent" shall be deemed to have the
same
value as the
Common Shares on such date.
(b) In case the
Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them to
subscribe for or purchase (for a period
expiring within forty-five (45) calendar
days after such record date) Preferred
Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or per equivalent preferred
share (or having a conversion price per share, if a security
convertible
into
Preferred Share or equivalent preferred share) less than the current
market
price (as determined pursuant to Section 11(d) hereof)
per Preferred Share
on
such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction,
the numerator of which shall be the
number of Preferred Shares outstanding on such record date,
plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current
market price,
and the denominator of
which shall be the number of Preferred
Shares outstanding on such record
date,
plus the number of additional Preferred Shares and/or equivalent preferred
16
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shares to be offered for subscription or
purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery
of consideration part or all of which
may be in a form other than cash,
the value of such
consideration
shall be as
determined in good faith by the Board,
whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. Preferred Shares owned by or held
for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively
whenever such a record
date is fixed, and
in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the
Purchase Price which would then be in
effect if such record date had not been
fixed.
(c) In case the
Company shall fix a record date for a distribution to all
holders of Preferred Shares (including any such distribution
made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness,
cash (other than a
regular quarterly
cash dividend out of the earnings or
retained earnings of
the Company),
assets
(other than a dividend payable in Preferred
Shares, but including any dividend
payable in shares other than Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b)
hereof), the Purchase
Price to be in effect after such record
date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof)
per Preferred Share on such record
date, less the fair market value (as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes) of the portion of the cash,
assets or evidences of indebtedness so to
be distributed or of such subscription
rights or warrants applicable to a Preferred Share
and the denominator of which
shall be such current market price (as determined pursuant to Section 11(d)
hereof) per Preferred Share on such record
date. 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 be adjusted to be the
Purchase Price which would have been in
effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations
made pursuant to Section 11(a)(iii) hereof, the "current
market
price" per Common Share on any date shall be deemed to be the
average of the
daily closing prices per share of such Common Shares for the
thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
immediately
prior to such date,
and for purposes of computations made
pursuant to
Section 11(a)(iii)
hereof, the "current market price" per
Common
Share on any date
shall be deemed to be
the average
of the daily
closing prices
per share of such Common Shares for the ten (10) consecutive
Trading Days
immediately following
such date; provided,
however, that in
the event that
the current market
price per share of the Common Shares is
determined
during a period following the announcement by the issuer of
such
Common
Shares of (A) a
dividend or
distribution
on such Common Shares
payable in such
Common Shares or
securities convertible
into such Common
Shares
(other than the
Rights), or (B) any
subdivision,
combination
or
reclassification
of such Common Shares,
and prior to the expiration of the
requisite
thirty (30) Trading
Day or ten (10)
Trading Day period, as
set
forth above,
after the ex-dividend
date for such dividend or distribution,
or the record
date for such
subdivision,
combination or
reclassification
occurs,
then, and in each such
case, the "current
market price" shall
be
17
<page>
properly
adjusted to take into account ex-dividend or post record date
trading.
The closing price for each day shall be the last sale price,
regular
way, or, in case no
such sale takes place on such day, the average
of the
closing bid and asked prices, regular way, in either case as
reported in the
principal consolidated
transaction
reporting system
with
respect to
securities
listed or admitted to trading on the principal
national
securities
exchange on which the Common Shares are listed or
admitted to
trading or, if the Common Shares are not listed or admitted
to
trading on any
national securities
exchange, the last
quoted price or, if
not so quoted,
the average of the
high bid and the low asked prices in the
over-the-counter
market, as reported by The Nasdaq Stock Market, Inc.
("Nasdaq")
or such other
system then in use,
or, if on any such
date the
Common Shares
are not quoted by any such organization, the average of the
closing bid and
asked prices as furnished by a professional market maker
making a market
in the Common Shares selected by the Board. All references
in this Section
to closing prices, last quoted prices or other stock prices
mean prices
during regular
trading hours, without giving effect to any
after-hours or
extended hours trading. If on any such date no market
maker
is making a
market in the Common
Shares, the fair value
of such shares on
such
date shall be as determined in good faith by the Board, whose
determination
shall be described in a statement filed with the Rights Agent
and shall be
conclusive for all purposes. The term "Trading Day" shall mean
a day on which
Nasdaq or any
national securities exchange on which the
Common Shares
are listed or admitted to trading is open for the transaction
of business or, if the Common
Shares are not listed
or admitted to trading
on Nasdaq or any
national securities exchange, a Business Day. If the
Common
Shares are 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 Board, whose
determination
shall be described in a
statement
filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the "current
market
price" per
Preferred Share shall be determined in the same manner as
set
forth
above for the
Common Shares in clause (i) of this Section 11(d)
(other than the
last sentence
thereof). If the current market price per
Preferred Share
cannot be determined in the manner provided above or if the
Preferred
Shares are not publicly held or listed or traded in a manner
described in
clause (i) of this Section 11(d), the "current market price"
per Preferred
Share shall be
conclusively deemed to
be an amount equal to
1,000 (as such
number may be
appropriately
adjusted for such events as
share splits,
share dividends and recapitalizations with respect to the
Common Shares
occurring after the date of this Agreement) multiplied by the
current market
price per share of the Common Shares. If neither the Common
Shares nor the
Preferred Shares are publicly held or so
listed or traded,
"current
market price" per share of the
Preferred Shares shall mean the
fair
value per share as determined in good faith by the Board, which
determination
shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. For all purposes of this
Agreement,
the "current market
price" of one one-thousandth of a Preferred
Share shall be
equal to the "current
market price" of one Preferred Share
divided by
1,000.
(e) Anything
herein to the contrary
notwithstanding, no
adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e)
are not required to be made shall be
carried forward and
taken into account in
any subsequent adjustment. All calculations under this
Section 11 shall be made
to the nearest cent or to the nearest
ten-millionth
of a Preferred
Share, or
18
<page>
hundred-thousandth of a Common Share or other security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made
no later than the earlier of (i) three
years from the date of the transaction
which mandates such
adjustment, or
(ii)
the Expiration Date.
(f) If, as a
result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any
Right thereafter
exercised shall become
entitled to receive any securities other
than Preferred Shares,
thereafter the
number of such other securities so
receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with
respect to the Preferred Shares contained
in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the
provisions of Sections
7, 9, 10, 13 and 14
hereof with respect to the Preferred Shares shall apply on like terms to
any
such other securities; provided, however, that the Company shall
not be liable
for its inability to reserve and keep
available for issuance upon exercise of
the Rights pursuant to Section 11(a)(ii) a number of Common
Shares greater than
the number then authorized by the Company's
Articles of
Incorporation
but not
outstanding or reserved for other
purposes.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment
as provided herein.
(h) Unless the
Company shall have
exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase
Price as a result of
the
calculations made in Sections 11(b) and
(c), each Right outstanding immediately
prior to the making of such adjustment
shall thereafter evidence the right to
purchase, at the adjusted Purchase Price,
that number of one one-thousandths of
a Preferred Share (calculated to the nearest ten-millionth) obtained by (i)
multiplying (x) the number of one
one-thousandths of a
share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the
Purchase Price,
and (ii) dividing
the product so obtained by the Purchase
Price in effect
immediately after
such
adjustment of the Purchase Price.
(i) The
Company may elect on or after the date of
any adjustment
of the
Purchase Price to adjust the number of
Rights, in lieu of any
adjustment in the
number of one one-thousandths of a
Preferred Share purchasable upon the exercise
of a Right. Each of the Rights outstanding
after the adjustment in the number of
Rights shall be exercisable for the number
of one one-thousandths of a Preferred
Share for which a Right was exercisable
immediately
prior to such
adjustment.
Each Right held of record prior to such
adjustment of the number of Rights shall
become that number of Rights (calculated to
the nearest
one-hundred-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating
the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date
on which the
Purchase
Price is adjusted or any day thereafter,
but, if the Rights
Certificates
have
been issued, shall be at least ten (10) days
later than the date of the public
announcement. If Rights Certificates have been issued,
upon each adjustment of
19
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the number of
