EXHIBIT 1
CARRIAGE SERVICES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
RIGHTS AGREEMENT
December 18, 2000
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Table of Contents
SECTION PAGE
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Section 1. CERTAIN DEFINITIONS..............................................1
Section 2. APPOINTMENT OF RIGHTS AGENT......................................5
Section 3. ISSUE OF RIGHTS CERTIFICATES.....................................6
Section 4. FORM OF RIGHTS CERTIFICATES......................................7
Section 5. COUNTERSIGNATURE AND REGISTRATION................................8
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MULITLATED, DESTROYED, LOST, OR STOLEN RIGHTS
CERTIFICATES.....................................................8
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS....9
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.............11
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK...................11
Section 10. PREFERRED STOCK RECORD DATE.....................................12
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS................................................13
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES......20
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER...................................................20
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.........................22
Section 15. RIGHTS OF ACTION................................................23
Section 16. AGREEMENT OF RIGHTS HOLDERS.....................................23
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER..............24
Section 18. CONCERNING THE RIGHTS AGENT.....................................24
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.......25
Section 20. DUTIES OF RIGHTS AGENT..........................................25
Section 21. CHANGE OF RIGHTS AGENT..........................................27
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Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.............................28
Section 23. REDEMPTION......................................................28
Section 24. EXCHANGE........................................................29
Section 25. NOTICE OF CERTAIN EVENTS........................................30
Section 26. NOTICES.........................................................31
Section 27. SUPPLEMENT AND AMENDMENTS.......................................32
Section 28. SUCCESSORS......................................................32
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.......32
Section 30. BENEFITS OF THIS AGREEMENT......................................33
Section 31. SEVERABILITY....................................................33
Section 32. GOVERNING LAW...................................................33
Section 33. COUNTERPARTS....................................................33
Section 34. INTERPRETATION..................................................33
Exhibit A FORM OF RIGHTS CERTIFICATE
Exhibit B FORM OF SUMMARY OF RIGHTS
Exhibit C CERTIFICATE OF DESIGNATION
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 18, 2000 (the "Agreement"), between
Carriage Services, Inc., a Delaware corporation (the "Company"), and American
Stock Transfer and Trust Company (the "Rights Agent").
WITNESSETH:
WHEREAS on December 18, 2000 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one preferred share purchase right (a "Right") for each share of
Class A common stock, par value $0.01 per share, of the Company (the "Class A
Common Stock") and of one Right for each share of Class B common stock, par
value, $0.01 per share, of the Company (the "Class B Common Stock"), each as
outstanding at the Close of Business (as hereinafter defined) on January 8, 2001
(the "Record Date"), and has authorized the issuance of one Right (as such
number may be adjusted pursuant to the provisions of Section 11((o)) for each
share of Class A Common Stock and Class B Common Stock issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date, each Right initially representing the right to purchase
one one-hundredth of a share of Series G Junior Participating Preferred Stock,
par value $0.01 per share, of the Company (the "Preferred Stock"), having the
powers, rights and preferences set forth in the Certificate of Designation
attached to this Agreement as EXHIBIT C, upon the terms and subject to the
conditions set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth in this Agreement, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated, whether their use precedes or
follows the definition thereof in this Agreement:
(a) "Act" means the Securities Act of 1933, as in effect on the date
in question, unless otherwise specifically provided.
(b) "Acquiring Person" means any Person that, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 15%
or more of the shares of Class A Common Stock then outstanding, but does
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;
(iv) any Person organized, appointed or established by the Company for or
pursuant to the terms of any such plan; or (v) a Grandfathered Shareholder
or a Grandfathered Transferee, unless and until such Grandfathered
Shareholder or Grandfathered Transferee, as applicable, without the prior
approval of the Board of Directors of the Company, shall after the date
hereof become the Beneficial Owner of more than the applicable
Grandfathered Percentage of the Class A Common Stock of the Company.
Notwithstanding the foregoing, no Person (including, without limitation,
any Grandfathered Shareholder or Grandfathered Transferee) shall become an
"Acquiring Person" as the result of an acquisition of shares of Class A
Common Stock by the Company which, by reducing the number of shares of
Class A Common Stock outstanding, increases the
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proportionate number of shares of Class A Common Stock beneficially owned
by such Person to 15% or more of the shares of Class A Common Stock then
outstanding; provided, however, that if a Person (including, without
limitation, any Grandfathered Shareholder or Grandfathered Transferee)
shall become the Beneficial Owner of 15% or more of the shares of Class A
Common Stock then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional shares of Class A Common Stock then
such Person shall be deemed to be an "Acquiring Person." Notwithstanding
the foregoing, if the Board of Directors of the Company determines in good
faith that a Person (including, without limitation, any Grandfathered
Shareholder or Grandfathered Transferee) who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (b), has become such inadvertently, and such Person divests
as promptly as practicable a sufficient number of shares of Class A Common
Stock so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (b), then
such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement. The word "outstanding," whenever used with
reference to a Person's Beneficial Ownership of shares of Class A Common
Stock, shall mean the number of such shares then issued and outstanding,
together with the number of such shares not then issued and outstanding
which such Person would be deemed to own beneficially hereunder.
(c) "Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act and in effect on the date of this Agreement.
(d) A Person will be deemed the "Beneficial Owner" of, and will be
deemed to "beneficially own," any securities that:
(i) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the occurrence of certain events) pursuant
to any agreement, arrangement, or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a
Person will not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Section 11(a)(ii)
Event, or (C) securities issuable upon exercise of Rights from and
after a Section 11(a)(ii) Event, which were acquired by such Person
or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 (the
"Original Rights") or pursuant to Section 11(i) in connection with
an adjustment made with respect to any Original Rights;
(ii) 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
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Exchange Act), including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person will not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this Section 1(d)(ii) as a
result of an agreement, arrangement, or understanding to vote such
security if such agreement, arrangement, or understanding: (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 applicable provisions of the General Rules and Regulations
under the Exchange Act, and (2) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such Person) with
which such Person (or any of such Person's Affiliates or Associates)
has any agreement, arrangement, or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso in Section
1(d)(ii)), or disposing of any voting securities of the Company;
provided, however, that nothing in this Section 1(d) will 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 bona fide firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
(e) "Board of Directors" means the Board of Directors of the
Company.
(f) "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the City of Houston in the State of
Texas or in the city in which the office of the Rights Agent is located
are authorized or obligated by law or executive order to close.
(g) "Certificate of Designation" shall mean the Certificate of
Designation setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of Series G Junior Participating Preferred
Stock of the Company, a copy of the form of which is attached to this
Agreement as EXHIBIT C.
(h) "Close of Business" on any given date will mean 5:00 p.m.,
Houston, Texas time, on such date; provided, however, that if such date is
not a Business Day it will mean 5:00 p.m., Houston, Texas time, on the
next succeeding Business Day.
(i) "Common Stock" means the Class A common stock and/or the Class B
common stock, as the case may be; "Common Stock" when used with reference
to any Person other than the Company will mean the capital stock of such
Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
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(j) "Distribution Date" means the Close of Business on the tenth
Business Day after the earlier to occur of (i) the Stock Acquisition Date
or (ii) the date any Person commences or publicly announces an intention
to commence a tender offer or exchange offer for the Common Stock which
would result in, upon the consummation of such offer, the Person making
such offer, together with all of its Affiliates and Associates, being the
Beneficial Owner of 15% or more of the Class A Common Stock then
outstanding (including any such date that is after the date of this
Agreement and prior to the issuance of the Rights); provided, however,
that if the tender offer or exchange offer that gave rise to the
Distribution Date is cancelled, terminated or otherwise withdrawn within
ten Business Days of its announcement, such offer shall be deemed never to
have been made and no Distribution Date shall occur with respect thereto.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
(l) "Grandfathered Percentage" shall mean, (A) with respect to any
Grandfathered Person, the percentage of the outstanding Class A Common
Stock that such Grandfathered Person beneficially owned on the date
hereof, or (B) with respect to any Grandfathered Transferee, the
percentage of the outstanding Class A Common Stock that such Grandfathered
Transferee beneficially owns immediately after giving effect to the
transaction by which such Grandfathered Transferee first becomes a
Grandfathered Transferee; provided that if the percentage of Class A
Common Stock beneficially owned by any Grandfathered Person or
Grandfathered Transferee, as applicable, is reduced for any reason
subsequent to the date hereof, the Grandfathered Percentage with respect
to such Grandfathered Shareholder or Grandfathered Transferee, as
applicable, shall be reduced to the same extent.
(m) "Grandfathered Shareholder" shall mean any Person who as of the
Close of Business on the date hereof was the Beneficial Owner of 15% or
more of the Class A Common Stock of the Company then outstanding. Any
Grandfathered Shareholder who subsequent to the date hereof becomes the
Beneficial Owner of less than 15% of the outstanding Common Stock shall
cease to be a Grandfathered Shareholder.
(n) "Grandfathered Transferee" shall mean any Person who or which,
together with all Affiliates and Associates of such Person:
(i) acquires directly from a Grandfathered Shareholder in any
one transaction Class A Common Stock such that, after giving effect
to such acquisition, such Person is the Beneficial Owner of 15% or
more of the outstanding Class A Common Stock; and
(ii) immediately prior to such acquisition beneficially owned
less than 1% of all then outstanding Class A Common Stock. Any
Grandfathered Transferee who subsequent to the date hereof becomes
the Beneficial Owner of less than 15% of the outstanding Class A
Common Stock shall cease to be a Grandfathered Transferee.
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(o) "Person" means any individual, firm, corporation, partnership,
limited liability company or other public or private entity.
(p) "Preferred Stock" shall have the meaning set forth in the
introductory paragraph of this Agreement. Any reference in this Agreement
to Preferred Stock shall be deemed to include any authorized fraction of a
share of Preferred Stock, unless the context otherwise requires.
(q) "Redemption Price" with respect to each Right means $0.001, as
such amount may from time to time be adjusted in accordance with Section
11. All references herein to the Redemption Price means the Redemption
Price as in effect at the time in question.
(r) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii).
(s) "Section 13 Event" means any event described in Clauses (i),
(ii), or (iii) of Section 13(a).
(t) "Stock Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, will include,
without limitation, a report filed pursuant to ss. 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become an Acquiring Person or such earlier date as a majority
of the Board of Directors shall become aware of the existence of an
Acquiring Person.
(u) "Subsidiary" means, with reference to any Person, any entity of
which an amount of voting securities sufficient to elect at least a
majority of the directors or similar Persons of such entity is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(v) "Trading Day" means a day on which the principal national
securities exchange or quotation system on which the shares of Class A
Common Stock are listed or admitted to trading is open for the transaction
of business or, if the shares of Class A Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day.
(w) "Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions of this Agreement, 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. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for the acts or omissions of any such
co-Rights Agent.
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Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Prior to the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of this Section 3(b)) by the certificates for
the Common Stock, registered in the names of the holders of the Common
Stock (which certificates for Common Stock will be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock including a transfer to the Company. 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 Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights
certificates, in substantially the form of EXHIBIT A (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided in this Agreement. In the event
that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(o), at the time of distribution of the
Rights Certificates, the Company will make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a)) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As soon as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form of
EXHIBIT B, by first-class, postage prepaid mail, to each record holder of
the Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect
to certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock will also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date (as defined in
Section 7), the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued will also constitute the
transfer of the Rights associated with such shares of Common Stock.
(c) Rights will be issued in respect of all shares of Common Stock
that are issued (whether originally issued or 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 Common Stock
will also be deemed to be certificates for Rights, and will bear the
following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER TO CERTAIN
RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN CARRIAGE
SERVICES, INC. (THE "COMPANY") AND AMERICAN STOCK TRANSFER AND TRUST
COMPANY (THE "RIGHTS AGENT") DATED AS OF DECEMBER 18, 2000 (AS
AMENDED FROM TIME TO TIME, THE "RIGHTS AGREEMENT"), THE TERMS OF
WHICH ARE HEREBY INCORPORATED IN THIS CERTIFICATE BY REFERENCE AND A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY.
UNDER CERTAIN
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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 PROMPTLY AFTER RECEIPT OF A
WRITTEN REQUEST. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ANY PERSON WHO IS, WAS, OR
BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (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 the shares of Common Stock issued after the Record
Date, until the earlier of (i) the Distribution Date or (ii) the
Expiration Date, the Rights associated with the Common Stock represented
by such certificates will be evidenced by such certificates alone and
registered holders of Common Stock will also be the registered holders of
the associated Rights, and the transfer of any of such certificates will
also constitute the transfer of the Rights associated with the Common
Stock represented by such certificates.
(d) With respect to Rights associated with shares of Class B Common
Stock, such Rights shall be automatically extinguished and terminated to
the extent the associated shares of Class B Common Stock are converted
into shares of Class A Common Stock, and upon such conversion into Class A
Common Stock, Rights are issued in association with such Class A Common
Stock. In this regard, upon conversion of Class B Common Stock into Class
A Common Stock in accordance with the provisions of the Class B Common
Stock, a Right shall be issued associated with such Class A Common Stock
in lieu of the Right associated with the converted Class B Common Stock,
which Right extinguished and terminated in accordance with the immediately
preceding sentence.
Section 4. FORM OF RIGHTS CERTIFICATES.
The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse of the rights certificates) will each be
substantially in the form set forth in EXHIBIT A and may have such marks of
identification or designation and such legends, summaries, or endorsements 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 quotation system on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22, the Rights Certificates, whenever distributed, will be dated as
of the Record Date and on their face will entitle the holders of such Rights
Certificates to purchase one one-hundredth of a share of Preferred Stock at the
price set forth in such Rights Certificates (such exercise price per share, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price will be subject to adjustment as
provided in this Agreement.
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Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates will be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
Chief Operating Officer, its President, or any Executive Vice President
either manually or by facsimile signature, will have affixed thereto the
Company's seal or a facsimile thereof, and will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates will be countersigned by the
Rights Agent, either manually or by facsimile signature and will not be
valid for any purpose unless so countersigned. In case any officer of the
Company who has signed any of the Rights Certificates ceases 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 Certificate may be signed on behalf
of the Company by any Person who, at the actual date of the execution of
such Rights Certificate, is 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 Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued under this Agreement. Subject to the provisions of Section 11 and
Section 22, the Rights Certificates, whenever distributed, will be dated
as of the Record Date and on their face will entitle the holders of such
Rights Certificates to purchase one one- hundredth of a share of Preferred
Stock or other securities or property as provided herein, as the same may
from time to time be adjusted as provided herein, at the price per one
one- hundredth of a share set forth therein, as the same may from time to
time be adjusted as provided herein (the "Purchase Price").
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 7(e) and Section 14, at any
time after the Distribution Date, and at or prior to the Expiration Date,
any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Rights
Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a share of Preferred Stock (or, following a
Triggering Event, 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 Rights Certificates will make such request in
writing delivered to the Rights Agent, and will 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 will
be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until
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the registered holder has completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate
and has provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company requests in good faith. Thereupon, the Rights Agent
will, subject to Section 4, Section 7(e) and Section 14, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of any Rights Certificate.
(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 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.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Agreement including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii), Section
23(a) and Section 24) 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 of the
Rights Certificate duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price for each one
one-hundredth of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are
then exercisable, at or prior to the earlier of (i) the Close of Business
on December 31, 2010, (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 or (iii) the time
at which such rights are exchanged as provided in Section 24 (the earlier
of the times, the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right will initially be
$10.00, subject to adjustment from time to time as provided in Section 11,
and Section 13(a). The Purchase Price will be payable in accordance with
Section 7(c).
(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 of the aggregate Purchase Price for the
number of one one-hundredths of a share of Preferred Stock (or other
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 will,
subject to Section 20(k), promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make
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available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Preferred Stock to be
purchased (the Company hereby irrevocably authorizing its transfer agent
to comply with all such requests) or (B) if the Company has elected to
deposit the shares of Preferred Stock with a depository agent, requisition
from the depository agent depository receipts representing such number of
one one-hundredths of a share of Preferred Stock as are to be purchased
(in which case certificates for the Preferred Stock represented by such
receipts will be deposited by the transfer agent with the depository
agent) and the Company will direct the depository agent to comply with
such request; (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with Section
14; (iii) after receipt of such certificates or depository receipts, cause
such certificates or depository receipts 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)) will
be made in cash or by certified bank check or bank draft payable to the
order of the Company. In the event that the Company is obligated to issue
other securities (including Class A Common Stock) of the Company, pay cash
or distribute other property pursuant to Section 11(a), the Company will
make all arrangements necessary so that such other securities, cash or
other property are available for distribution by the Rights Agent, if and
when appropriate.
(d) If the registered holder of any Rights Certificate exercises
less than all the Rights evidenced by such certificate, a new Rights
Certificate evidencing the unexercised Rights will be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by any Person referred to in Clauses (i) through (iii)
below will become null and void without any further action and no holder
of such Rights will have any rights whatsoever with respect to such
Rights, under any provision of this Agreement or otherwise: (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii)
a transferee from an Acquiring Person (or from any Associate or Affiliate
of an Acquiring Person) that becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee from an Acquiring Person (or of
any such Associate or Affiliate) that 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 that the Board of Directors of the
Company has determined is part of an agreement, plan, arrangement or
understanding that has as a substantial purpose or effect the avoidance of
this Section 7(e). The Company will use reasonable efforts to insure that
the provisions of this Section 7(e) are complied with, but will have no
liability under this Agreement to any holder of Rights Certificates or
other Person as a result of its failure to make any
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determinations with respect to an Acquiring Person, or any of its
Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will 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 has (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
requests in good faith.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange (or in connection with conversion of Class B Common
Stock into Class A Common Stock) will, 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, will be cancelled by it, and no
Rights Certificates will be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company will deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent will so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will deliver
all cancelled Rights Certificates to the Company, or will, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case will deliver a certificate of destruction to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company will use its best efforts to reserve and keep
available out of its authorized and unissued shares of Preferred Stock
(and/or other securities), the number of shares of Preferred Stock (and/or
other securities) that will be sufficient to permit the exercise in full
of all outstanding Rights, provided that the Company shall not be required
to reserve and keep available shares of Class A Common Stock or other
securities sufficient to permit the exercise in full of all outstanding
Rights pursuant to the adjustments set forth in Section 11(a)(ii), Section
11(a)(iii) or Section 13 hereof unless the Rights become exercisable
pursuant to such adjustments, and then only to the extent the Rights
become exercisable pursuant to such adjustments.
(b) So long as the Preferred Stock (and, following the occurrence of
a Triggering Event, Class A Common Stock 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 will use
its reasonable 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 or automated quotation system upon official notice of
issuance upon such exercise.
(c) The Company will use its best efforts to (i) file, as soon as
practicable following 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
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with Section 11(a)(iii), a registration statement under the Act, with
respect to the securities purchasable upon exercise of the Rights or
issued in an exchange pursuant to Section 24 on an appropriate form, (ii)
cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the
Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the applicable state
securities laws in connection with the exercisability of the Rights. The
Company may temporarily suspend, for up to 120 days after the date
described in Clause (i) of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and permit
it to become effective. Upon any such suspension, the Company will 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 no longer remains in effect. In addition, if the Company
determines that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability
of the Rights until such time as a registration statement has been
declared effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights will not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction has not been obtained, the
exercise of such Rights is not permitted under applicable law, or a
registration statement has not been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
(Class A Common Stock and/or other securities) delivered upon exercise of
Rights will, at the time of delivery of the certificates for such shares
upon 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 any shares of Preferred Stock or Common Stock or other
securities issued upon the exercise of Rights. The Company will not,
however, be required 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 Preferred Stock or Class A
Common Stock (or other securities, as the case may be) in respect of a
name other than that of the registered holder of the Rights Certificates
or to issue or deliver any Preferred Stock or Class A Common Stock or
other certificates in a name other than that of the registered holder
until such tax has 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
shares of Preferred Stock (Class A Common Stock and/or other securities) is
issued will, for all purposes, be deemed to have become the record holder of
such shares represented thereby, and such certificate will be dated, on the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the aggregate Purchase Price therefor (and all applicable
transfer taxes)
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was made; provided, however, that if the date of such surrender and payment is a
date upon which the transfer books of the Company are closed, such Person will
be deemed to have become the record holder of the shares on, and such
certificate will be dated, the next succeeding Business Day on which the shares
of Preferred Stock (Common Stock and/or other securities) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
Rights Certificate holders will not be entitled to any stockholder rights with
respect to shares of Preferred Stock (Common Stock and/or other securities),
including, without limitation, the right to vote, to receive dividends or other
distributions, or to exercise any preemptive rights, and will not be entitled to
receive any notice of any proceedings of the Company, except as provided in this
Agreement.
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)(i)In the event the Company at any time after the date of this
Agreement (A) declares a dividend on the Preferred Stock payable in
Preferred Stock, (B) subdivides the outstanding Preferred Stock, (C)
combines the outstanding Preferred Stock into a smaller number of shares,
or (D) issues any shares of its capital stock in a reclassification of the
Preferred Stock (including, without limitation, any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock (Class A Common Stock and/or other securities),
as the case may be, issuable on such date, will be proportionately
adjusted so that the holder of any Right exercised after such time will be
entitled to receive, upon payment of the Purchase Price then in effect,
the aggregate number and kind of shares of capital stock, as the case may
be, that, if such Right had been exercised immediately prior to such date,
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), the adjustment
provided for in this Section 11(a)(i) will be in addition to, and will be
made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that any Person, alone or together with its
Affiliates and Associates, at any time after the Rights Dividend
Declaration Date, becomes an Acquiring Person, then, proper provision will
be made so that each Right holder (except as provided in Section 7(e))
will thereafter have the right to receive, upon exercise of such Right at
the then current aggregate Purchase Price with respect to the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, in lieu of such number of one one-hundredths of a share
of Preferred Stock, such number of shares of Class A Common Stock equal to
the result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-hundredths of a share of Preferred Stock for
which a Right is then exercisable and (y) dividing that product by 50% of
the Current Market Price (defined in Section 11(d)) per
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share of Class A Common Stock on the date such Person became an Acquiring
Person (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of Class A Common Stock
that are authorized by the Company's certificate of incorporation but not
issued are not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) and the Rights become so exercisable,
the Company will, upon the exercise of a Right and payment of the
applicable Purchase Price, (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value"), and
(B) with respect to each Right (subject to Section 7(e)), make adequate
provision to substitute for the Adjustment Shares (1) cash, (2) a
reduction in the Purchase Price, (3) other equity securities of the
Company (including, without limitation, shares, or units of shares, of
preferred stock), that the Board of Directors has deemed to have
essentially the same rights, privileges and preferences as shares of Class
A Common Stock ("Common Stock Equivalents"), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value
has been conclusively determined by the Board of Directors based upon the
advice of a nationally recognized investment banking firm; provided,
however, that if the Company has not made adequate provision to deliver
value pursuant to Clause (B) above within 30 days following the first
occurrence of a Section 11(a)(ii) Event ("Section 11(a)(ii) Trigger
Date"), then the Company will be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, Class A Common Stock (to the extent available) and then, if
necessary, cash, which shares or cash have an aggregate value equal to the
Spread. The term "Spread" means the excess of (i) the Current Value over
(ii) the Purchase Price. If the Board of Directors determines in good
faith that it is likely that sufficient additional Class A Common Stock
could be authorized for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the extent necessary, but
not more than 120 days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek stockholder approval for the authorization of
such additional shares (such 30-day period, as it may be extended, being
the "Substitution Period"). To the extent that action is to be taken
pursuant to this Section 11(a)(iii), the Company (1) will provide, subject
to Section 7(e), that such action will apply uniformly to all outstanding
Rights, and (2) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any required
stockholder approval or to decide the appropriate form of distribution to
be made and the value thereof. In the event of any such suspension, the
Company will 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 no longer remains in effect.
For purposes of this Section 11(a)(iii), the Current Value of each
Adjustment Share will be the Current Market Price per share of the Class A
Common Stock on the effective date of the Section 11(a)(ii) Event and the
per share or per unit value of any Common Stock Equivalent will be deemed
to equal the Current Market Price per share of the Class A Common Stock on
such date.
(b) In case the Company fixes a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or shares
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<PAGE>
having the same rights, privileges and preferences as the Preferred Stock)
("equivalent preferred stock") (or securities convertible into Preferred
Stock or equivalent preferred stock) at a price per Preferred Stock or
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock)
less than the Current Market Price per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such record date
will be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, (i) the numerator of which is the
number of Preferred Stock outstanding on such record date, plus the number
of Preferred Stock that the aggregate offering price of the total number
of Preferred Stock (and/or equivalent preferred stock) so to be offered
(or the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such Current Market Price, and (ii)
the denominator of which is the number of Preferred Stock outstanding on
such record date, plus the number of additional Preferred Stock (and/or
equivalent preferred stock) to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible). In the event that the number of Preferred Stock issuable
under the terms of a convertible security, or the conversion or exercise
price of such convertible security, changes after the initial issuance of
such convertible security, an adjustment will be made to the Purchase
Price that conforms with the adjustment set forth in this Section 11(b).
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 will be as conclusively determined in good faith by the
Board of Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent and will be binding on the
Rights Agent and the holders of the Rights. Preferred Stock owned by or
held for the account of the Company will be deemed not to be outstanding
for the purpose of any such computation. Such adjustment will be made
successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase Price will be
adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.
(c) In case the Company fixes a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock,
but including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date will be
determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, (i) the numerator of which is the
Current Market Price of Preferred Stock on such record date, less the fair
market value (as conclusively determined in good faith by the Board of
Directors of the Company, whose determination will be described in a
statement filed with the Rights Agent) of the portion of the cash, assets,
or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and (ii) the
denominator of which is such Current Market Price per share of the
Preferred Stock. Such adjustments will be made successively whenever such
a record date is fixed, and in the event that such distribution is not so
made,
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the Purchase Price will be adjusted to be the Purchase Price that would
have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "Current
Market Price" per share of the Class A Common Stock on any date will be
deemed to be the average of the daily closing prices per share of such
Class A Common Stock for the 30 consecutive Trading Days immediately prior
to such date; provided, however, that in the event that the Current Market
Price of the Class A Common Stock is determined during a period following
the announcement by the issuer of such Class A Common Stock of (i) a
dividend or distribution on such Class A Common Stock payable in shares of
such Class A Common Stock or securities convertible into shares of such
Class A Common Stock (other than the Rights), or (ii) any subdivision,
combination or reclassification of such Class A Common Stock, and the
ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification has not occurred prior
to the commencement of the requisite 30 Trading Day period, as set forth
above, then, and in each such case, the Current Market Price will be
properly adjusted to take into account ex-dividend trading. The closing
price for each day will be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Class A Common Stock is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Class A Common Stock is listed
or admitted to trading or, if the Class A Common Stock is not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Class A Common Stock is
not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market
in the Class A Common Stock selected by the Board of Directors. If on any
such date no market maker is making a market in the Class A Common Stock,
the fair value of such shares on such date as determined in good faith by
the Board of Directors will be used. If the Class A Common Stock is not
publicly held or not so listed or traded, Current Market Price per share
will mean the fair value per share as determined in good faith by the
Board of Directors, the determination of which will be described in a
statement filed with the Rights Agent and will be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in Clause (i) of this
Section 11(d) (other than the last sentence thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in Clause (i) of this Section
11(d), the "Current Market Price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to one hundred (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
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neither the Common Stock nor the Preferred Stock is publicly held or so
listed or traded, "Current Market Price" per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by the
Board of Directors, which determination shall be described in a statement
filed with the Rights Agent. For all purposes of this Agreement, the
"Current Market Price" of one one-hundredth of a share of Preferred Stock
shall be equal to the "Current Market Price" of one share of Preferred
Stock divided by one hundred (subject to adjustment as provided above).
The "Current Market Price" per share of Equivalent Preferred Stock shall
be determined in the same manner as set forth above for the Preferred
Stock.
(e) Anything in this Agreement to the contrary notwithstanding, no
adjustment in the Purchase Price will 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 that by reason of
this Section 11(e) are not required to be made will be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 will be made to the nearest cent or to the nearest one
one-millionth of a share of Preferred Stock or one ten-thousandth of any
other share or security as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
will be made no later than the earlier of (i) three (3) years from the
date of the transaction that mandates such adjustment or (ii) the Final
Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised
becomes entitled to receive any shares of capital stock other than
Preferred Stock, then the number of such other shares so receivable upon
exercise of any Right and the Purchase Price will be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (m),
and (p) and the provisions of Sections 7, 9, 10, 13, and 14 with respect
to the Preferred Stock will 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 under this Agreement will evidence
the right to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a share of Preferred Stock purchasable from time to time
under this Agreement, all subject to further adjustment as provided in
this Agreement.
(h) Unless the Company has 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 will thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a share of Preferred Stock (calculated to
the nearest one one-millionth of a share of Preferred Stock) obtained by
(i) multiplying (x) the number of one one- hundredths of a share of
Preferred Stock 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.
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(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- hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such an adjustment in the number of Rights will be
exercisable for the number of one one-hundredths 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 will become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company will 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, will be at least ten 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 will, 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 are entitled as a result of such adjustment, or, at the
option of the Company, will 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 are entitled after such adjustment. Rights
Certificates so to be distributed will be issued, executed, and
countersigned in the manner provided for in this Agreement (and may bear,
at the option of the Company, the adjusted Purchase Price) and will be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock, the
Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one one-hundredths of a share of Preferred
Stock and the number of one one-hundredths of a share of Preferred Stock
that were expressed in the initial Rights Certificates issued 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
one one-hundredths of a share of Preferred Stock, the Company will 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
nonassessable shares of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 requires 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 shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon
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such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company will deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company will 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 its good faith judgment, the Board of Directors
of the Company determines it to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly
for cash of any shares of Preferred Stock at less than the current market
price, (iii) issuance wholly for cash of share of Preferred Stock or
securities that by their terms are convertible into or exchangeable for
Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options,
or warrants referred to in this Section 11, hereafter made by the Company
to holders of its Preferred Stock will not be taxable to such
stockholders.
(n) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27, take
(or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
(o) Notwithstanding anything in this Agreement to the contrary, in
the event that the Company at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declares a
dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivides the outstanding shares of Common Stock, or
(iii) combines the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior
to the Distribution Date, will be appropriately and proportionately
adjusted so that the number of Rights thereafter associated with each
share of Common Stock following any such event will equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator
of which is the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which is the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
(p) In the event that the Rights become exercisable following a
Section 11(a)(ii) Event, the Company, by action of the Board of Directors,
may permit the Rights, subject to Section 7(e), to be exercised for 50% of
the shares of Class A Common Stock (or cash or other securities or assets
to be substituted for the Adjustment Shares pursuant to Section
11(a)(iii)) that would otherwise be purchasable under Section 11(p) in
consideration of the surrender to the Company of the Rights so exercised
and without other payment of the Purchase Price. Rights exercised under
this Section 11(p) will be deemed to have been exercised in full and will
be cancelled.
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Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company will (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 Class A Common
Stock, the Class B Common Stock and the Preferred Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25.
The Rights Agent will be fully protected in relying on any such certificate and
on any adjustment contained in such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (i) the Company consolidates with, or merges with,
or into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(n)), and the Company is not the
continuing or surviving Person of such consolidation or merger; (ii) any
Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(n)) consolidates with, or merges with, or into,
the Company, and the Company is 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 are changed
into or exchanged for stock or other securities of any other Person or
cash or any other property; or (iii) the Company sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise
transfers), in one transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(n)), then, and in
each such case (except as contemplated by Section 13(d)), proper provision
will be made so that (A) each holder of a Right, except as provided in
Section 7(e) or Section 13(d), will thereafter have the right to receive,
upon the exercise of such Right at the then current Purchase Price
multiplied times the number of one one- hundredths of a share of Preferred
Stock for which a Right is then exercisable, in accordance with the terms
of this Agreement and in lieu of one one-hundredth of a share of Preferred
Stock, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable shares of Common Stock of the Principal
Party (as defined below), not subject to any liens, encumbrances,
preemptive rights, rights of first refusal or other adverse claims, as are
equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a
Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such
one one-hundredths of a Preferred 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 (2) dividing that product (which, following the first occurrence of a
Section 13 Event, will be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Market
Price per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (B) such Principal Party will
thereafter be liable for, and will
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assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement; (C) the term "Company" will
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 will apply only to
such Principal Party following the first occurrence of a Section 13 Event;
(D) such Principal Party will take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock)
in connection with the consummation of any such transaction as may be
necessary to assure that the provisions of this Agreement will thereafter
be applicable, as nearly as may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (E) the
provisions of Section 11(a)(ii) will be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" means
(i) in the case of any transaction described in Clause (i) or
(ii) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in Clause (iii)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" will refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person,
with Common Stock that is and has been so registered, "Principal Party"
will refer to whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
(c) The Company will not consummate any such consolidation, merger,
sale or transfer unless the Principal Party has 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 the Rights in
accordance with this Section 13 and unless prior thereto the Company and
such Principal Party have executed and delivered to the Rights Agent a
supplemental agreement providing for the Principal Party to assume and
perform the terms set forth in Sections 13(a) and (b) and further
providing that, as soon as practicable after the date of any
consolidation, merger or transfer mentioned in Section 13(a), the
Principal Party will
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
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(with a prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) In the event that the Rights become exercisable under Section
13(a), the Company, by action of the Board of Directors, may agree with
the Principal Party that the Principal Party may permit the Rights to be
exercised for 50% of the Common Stock of the Principal Party that would
otherwise be purchasable under Section 13(a), in consideration of the
surrender to the Principal Party, as the successor to the Company under
Section 13(a)(ii), of the Rights so exercised and without other payment of
the Purchase Price. Rights exercised under this Section 13(d) will be
deemed to have been exercised in full and cancelled.
(e) The provisions of this Section 13 will similarly apply to
successive mergers, consolidations and sales or other transfers. In the
event that a Section 13 Event occurs at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been
exercised will thereafter become exercisable in the manner described in
Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company will not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(o), or to
distribute Rights Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there will be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right will 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 will be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading,
or if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on such date as
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conclusively determined in good faith by the Board of Directors of the
Company will be used.
(b) The Company will not be required to issue fractions of shares of
Preferred Stock or other securities upon exercise of the Rights (other
than fractions of shares of Preferred Stock which are integral multiples
of one one-hundredth of a share) or to distribute certificates that
evidence fractional shares (other than fractions of shares of Preferred
Stock which are integral multiples of one one-hundredth of a share) of
Preferred Stock. In lieu of fractional shares of Preferred Stock, the
Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as provided in this Agreement an amount in
cash equal to the same fraction of the Current Market Price of a share of
Preferred Stock or other securities of the Company as of the Trading Day
immediately prior to the date of such exercise, as determined pursuant to
Section 11(d) hereof or in the same manner as the closing price of a share
of Preferred Stock shall be determined pursuant to Section 11(d)(ii)
hereof, (as the case may be).
(c) The holder of a Right, by the acceptance of the Rights,
expressly waives the 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), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, on its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action, or proceeding
against the Company to enforce, or otherwise act in respect of, its 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 this Agreement and injunctive relief against actual or
threatened violations of the obligations under this Agreement of any Person
subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the Rights consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common 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 or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer,
and with the appropriate forms and certificates fully executed;
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(c) subject to Section 6(a) and Section 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated
certificate for Common Stock), is registered as the absolute owner of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated certificate for
Common Stock made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent,
will 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 will 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 will use its reasonable 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 will be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Preferred Stock or any other
securities of the Company that may at any time be issuable on the exercise of
the Rights represented thereby, nor will anything contained in this Agreement 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, 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 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate have
been exercised in accordance with the provisions of this Agreement.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement and,
from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties under this Agreement. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted to be done by the Rights Agent in connection with the acceptance
and administration of this Agreement, including, without limitation, the
costs and expenses of defending against any claim of liability. Anything
to the contrary notwithstanding, in no event shall the Rights Agent be
liable for special, indirect, consequential or incidental loss or damage
of any kind.
(b) The Rights Agent will be protected and will incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this
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Agreement in reliance upon any Rights Certificate or certificate for
Preferred 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.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into or with which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
Person resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation
succeeding to the corporate trust or stockholder services business of the
Rights Agent or any successor Rights Agent, will 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 to this
Agreement; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section
21. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement, any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates will 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 is changed and
at such time any of the Rights Certificates 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 have not 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 will 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 of such Rights Certificates, will be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will 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 deems it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or
adverse person and the determination of "Current
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Market Price") be proved or established by the Company prior to taking or
suffering any action under this Agreement, such fact or matter (unless
other evidence in respect of such fact or matter is specifically
prescribed in this Agreement) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
Chief Executive Officer, the Chief Operating Officer, the President or any
Executive Vice President of the Company and delivered to the Rights Agent;
and such certificate will 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 will be liable under this Agreement only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will 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 or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution of this Agreement by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate
(except its countersignature); nor will it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or
in any Rights Certificate; nor will it be responsible for any adjustment
required under the provisions of Section 11 or Section 13, or responsible
for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor will
it by any act under this Agreement be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred
Stock (and/or other securities) to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Preferred Stock
(and/or other securities) will, when so issued, be validly authorized or
issued, fully paid or nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties under this
Agreement from the Chairman of the Board, the Chief Executive Officer, the
Chief Operating Officer, the President, any Executive Vice President or
the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will 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.
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(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, 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 in this Agreement will
preclude the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers vested by this Agreement in it or perform any duty under this
Agreement either itself or by or through its attorneys or agents, and the
Rights Agent will 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, however, reasonable care was exercised in the selection and
continued employment of such Person.
(j) No provision of this Agreement will 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 under this Agreement or in the
exercise of its rights if there are 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 Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
Clause 1 or 2 of such certificate, the Rights Agent will 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
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Class A Common Stock, Class B Common Stock and/or Preferred Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent 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
Class A Common Stock, Class B Common Stock and/or Preferred Stock, by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent resigns or is removed or otherwise becomes incapable
of acting, the Company will appoint a successor to the Rights Agent. If the
Company fails to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who will, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, will be a
corporation organized and doing business under the laws of the United States or
a State of the United States, in good standing, that is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$25,000,000. After appointment, the
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successor Rights Agent will 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, except that the predecessor Rights Agent will deliver and
transfer to the successor Rights Agent any property at the time held by it under
this Agreement 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 will file notice of such appointment in writing with
the predecessor Rights Agent and each transfer agent of the Class A Common
Stock, Class B Common Stock and/or Preferred Stock, and mail a notice of such
appointment 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 in such notice, will 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 provisions of this Agreement or of the Rights to the contrary, the Company
may, in its discretion, issue new Rights Certificates evidencing Rights in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number, 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 Class A Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) will, with
respect to shares of Class A Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the Company, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (y) no such Rights
Certificate will be issued if, and to the extent that, the Company is advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (z) no such Rights Certificate will be issued if, and to
the extent that, appropriate adjustment has otherwise been made in lieu of the
issuance of such Rights Certificate.
Section 23. REDEMPTION.
(a) The Company may, at its option, by action of the Board of
Directors, at any time prior to the earlier of (i) the close of business
on the tenth day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close
of business on the tenth day following the Record Date, or (ii) the Final
Expiration Date, redeem all but not fewer than all the then outstanding
Rights at the Redemption Price (the date of such redemption, the
"Redemption Date").
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights, evidence of which has been filed with the
Rights Agent 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 will be to receive the Redemption Price. Promptly
after the action of the Board of Directors ordering the redemption of the
Rights, the Company will give notice of such redemption to the Rights
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Agent and to the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Class A Common
Stock and/or Class B Common Stock, as the case may be. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Any notice that is mailed in the manner in this
Agreement provided will be deemed given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail, or
any defect in the notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which will not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Class A Common Stock, each Right being exchangeable for one
share of Class A Common Stock, appropriately adjusted to reflect any
transaction specified in Section 11(a)(i) occurring after the Record Date
(such number of shares of Class A Common Stock issuable in exchange for
one Right being referred to herein as the "Exchange Shares").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after 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 or entity organized,
appointed or established by the Company for or pursuant to the terms of
any such Plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Class A Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive the Exchange
Shares. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Class A Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or equivalent preferred stock) for
Exchange Shares, at the initial rate of one one-hundredth of a share of
Preferred Stock (or equivalent preferred stock) for
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<PAGE>
each Class A Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Preferred Stock
delivered in lieu of each Class A Common Stock will have the same voting
rights as one share of Class A Common Stock.
(d) In the event that there shall not be sufficient Class A Common
Stock or Preferred Stock authorized but unissued, to permit any exchange
of Rights as contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize additional
Class A Common Stock or Preferred Stock for issuance upon exchange of the
Rights or shall take such other action specified in Section 11(a)(iii)
hereof.
(e) The Company shall not be required to issue fractions of shares
of Class A Common Stock to distribute certificates which evidence
fractional Class A Common Stock. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable an
amount in cash equal to the same fraction of the Current Market Price of a
whole share of Class A Common Stock. For the purposes of this subsection
(d), the Current Market Value of a share of Class A Common Stock shall be
determined pursuant to Section 11(d)(i) hereof as of the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company proposes, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders
of its Preferred Stock or to make any other distribution to the holders of
its Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the
holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares), or (iv) to effect
any consolidation or merger into, or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section
11(n)), or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(n)), or (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than
by payment of dividends in Common Stock) then, in each such case, the
Company will give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26, a notice of such proposed
action, which will specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein
30
<PAGE>
by the holders of the shares of Class A Common Stock, Class B Common Stock
and/or Preferred Stock, if any such date is to be fixed, and such notice
will be so given in the case of any action covered by Clause (i) or (ii)
above at least 20 days prior to the record date for determining holders of
the Preferred Stock for purposes of such action, and in the case of any
such other action, at least 20 days prior to the date of the taking of
such proposed action or the date of participation therein by the holders
of the shares of Class A Common Stock, Class B Common Stock and/or
Preferred Stock, whichever is the earlier.
(b) In case of a Triggering Event, then (i) the Company will as soon
as practicable give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26, a notice of the occurrence of
such event, which will specify the event and the consequences of the event
to holders of Rights under this Agreement, and (ii) all references in
Section 25(a) to Preferred Stock will be deemed thereafter to refer to
other securities, if appropriate.
Section 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company will 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:
Carriage Services, Inc.
1900 St. James Place, 4th Floor
Houston, Texas 77056
Attention: Chief Executive Officer
with a copy to:
Thompson & Knight, LLP
1200 Smith Street, Suite 3600
Houston, Texas 77002-4595
Attention: W. Christopher Schaeper
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 will be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: General Counsel
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Class A Common Stock and/or Class B Common Stock)
31
<PAGE>
will be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENT AND AMENDMENTS. At any time prior to the
Distribution Date and subject to the last sentence of this Section 27, the
Company may by action of its Board of Directors, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
(including, without limitation, the date upon which the Distribution Date shall
occur, the time during which the Rights may be redeemed pursuant to Section 23
or any provision of the Certificate of Designations) in any manner without the
approval of any holder of the Rights. From and after the Distribution Date and
subject to applicable law, the Company may by action of its Board of Directors,
and the Rights Agent shall if the Company so directs, from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity or to correct or supplement any
provision contained in this Agreement which may be defective or inconsistent
with any other provision of this Agreement or (ii) to make any other provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of the Rights or Right Certificates (other than an Acquiring Person or
any Affiliate or Associate of an Acquiring Person). Any supplement or amendment
adopted during any period after any Person has become an Acquiring Person but
prior to the Distribution Date shall be null and void unless such supplement or
amendment could have been adopted under the preceding sentence from and after
the Distribution Date. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment; provided, however, that the Rights Agent may, but
shall not be obligated to, enter into any such supplement or amendment which
affects its own rights, duties or immunities under this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of the Common Stock of the Company.
In addition, notwithstanding anything to the contrary contained in this
Agreement, no supplement or amendment to this Agreement shall be made which (i)
reduces the Redemption Price (except as required hereunder by appropriate
adjustment to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement) or (ii) provides for an earlier
Final Expiration Date.
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent will bind and inure to
the benefit of their respective successors and assigns under this Agreement.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. The
Board of Directors will have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (a) interpret the provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of Clause (Y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors in good faith, will (x) be final, conclusive and binding on the
Company, the Rights Agent, the
32
<PAGE>
holders of the Rights and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement will be
construed to give to any Person other than the Company, the Rights Agent, and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; and this Agreement will
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement will remain in full
force and effect and will in no way be affected, impaired or invalidated.
Section 32. GOVERNING LAW. THIS AGREEMENT, EACH RIGHT, AND EACH RIGHTS
CERTIFICATE ISSUED UNDER THIS AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED HOWEVER, THAT ALL
PROVISIONS REGARDING THE RIGHTS, DUTIES AND OBLIGATIONS OF THE RIGHTS AGENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE.
Section 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts will for all purposes be deemed to be
an original, and all such counterparts will together constitute but one and the
same instrument.
Section 34. INTERPRETATION. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and will not control or
affect the meaning or construction of any of the provisions of this Agreement.
References in this Agreement to Sections and Exhibits are references to the
Sections of and Exhibits to this Agreement unless the context requires
otherwise. In this Agreement, the word "or" is not exclusive.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
CARRIAGE SERVICES, INC.
By: /S/ MELVIN C. PAYNE
Melvin C. Payne
Chief Executive Officer
33
<PAGE>
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By:/s/ BARRY S. ROSENTHAL
Barry S. Rosenthal
Vice President
34
<PAGE>
Exhibit A to Rights Agreement
Certificate No. R-_________
[FORM OF RIGHTS CERTIFICATE]
____________ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2010 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.
Rights Certificate
CARRIAGE SERVICES, INC.
This certifies that ____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions, and conditions of the
Rights Agreement, dated as of December 18, 2000 (as amended from time to time,
the "Rights Agreement"), between Carriage Services, Inc., a Delaware corporation
(the "Company"), and American Stock Transfer and Trust Company (the "Rights
Agent"), unless the Rights evidenced hereby have been previously redeemed by the
Company, to purchase from the Company at any time prior to 5:00 p.m. (Houston,
Texas time) on December 31, 2010 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, nonassessable share of Series G Junior
Participating Preferred Stock, $0.01 par value, (the "Preferred Stock") of the
Company, at a purchase price of $______ per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares that may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of _________________
based on the Common Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares of Common Stock
or other securities, that 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
incorporated herein by reference and made a part of this certificate 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
limitations of rights include the temporary suspension of the exercisability of
such Rights under the certain circumstances
A-1
<PAGE>
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. All capitalized terms not otherwise defined
have the meaning set forth in the Rights Agreement.
Upon the occurrence of 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, (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 will become null and void and no holder of this
certificate will have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered have entitled such holder to
purchase. If this Rights Certificate is exercised in part, the holder will be
entitled to receive upon surrender of this certificate 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 option at a redemption
price of $0.001 per Right. In addition, in certain circumstances the Rights may
be exchanged, in whole or in part, for shares of the Class A Common Stock.
Immediately upon the action of the Board of Directors of the Company authorizing
any such exchange, and without any further action or any notice, the Rights
(other than Rights that are not subject to such exchange) will terminate and the
Rights will only enable holders to receive the shares issuable upon such
exchange.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Rights Certificate will be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Company that may at any time be issuable on
the exercise hereof, nor will anything contained in the Rights Agreement or
herein be construed to confer upon the holder of this 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 the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate have been exercised as provided in the Rights Agreement.
A-2
<PAGE>
This Rights Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of: ____________________
CARRIAGE SERVICES, INC.
By:_________________________________
Name:_______________________________
Title:________________________________
Countersigned:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
By:____________________________________
Name:__________________________________
Title:___________________________________
A-3
<PAGE>
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells, assigns,
and transfer unto______________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________.
This Rights Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint ________________
attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:_____________________
____________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned, or
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);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] 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:_________________________
____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
A-4
<PAGE>
FORM OF ELECTION TO PURCHASE
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.
To: CARRIAGE SERVICES, INC.:
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the Preferred Stock issuable
upon the exercise of the Rights (or such other securities of the Company or of
any other person that may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of and
delivered to:
Please insert social security or other identifying number:________________
Please print name and address:____________________________________________
__________________________________________________________________________
If such number of Rights are not all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights will be
registered in the name of and delivered to:
Please insert social security or other identifying number:_______________
Please print name and address:____________________________________________
__________________________________________________________________________
Dated:________________
__________________________________________
Signature
Signature Guaranteed:
A-5
<PAGE>
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
Adverse Person or an Affiliate or Associate of any such Acquiring Person or an
Adverse Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [
] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or Adverse Person or an
Affiliate or Associate of an Acquiring Person or an Adverse Person.
Dated:_____________________
__________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the Certification of Status set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
A-6
<PAGE>
Exhibit B to Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK OF CARRIAGE SERVICES, INC.
On December 18, 2000, the Board of Directors of Carriage Services, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of Class A Common Stock, $0.01 par value, of
the Company (the "Class A Common Stock") and one Right for each share of Class B
Common Stock, $0.01 par value, of the Company (the "Class B Common Stock"). The
dividend will be made on January 8, 2000 (the "Record Date") to the stockholders
of record at the close of business on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of share of
Series G Junior Participating Preferred Stock, $0.01 par value, of the Company,
(the "Preferred Stock"), at a price of $10.00 per one one- hundredth of a share
of Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in the Rights Agreement dated
as of December 18, 2000 (the "Rights Agreement") between the Company and
American Stock Transfer and Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten Business Days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Class A Common Stock (an "Acquiring Person") or (ii) ten
Business Days following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer, the consummation of which would result
in the beneficial ownership by a person or group of 15% or more of such
outstanding Class A Common Stock, provided that an Acquiring Person does not
include a Grandfathered Shareholder or a Grandfathered Transferee (as such terms
are defined in the Rights Agreement) (the earlier of such dates being the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
certificates for Class A Common Stock and/or Class B Common Stock (collectively,
the "Common Stock") outstanding as of the Record Date, by such certificates for
the Common Stock with a copy of this Summary of Rights attached to the
certificate.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the shares of Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
certificates issued after the Record Date upon transfer or new issuance of the
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Stock
outstanding even without such notation or a copy of this Summary of Rights being
attached to such Certificate, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights (the "Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
<PAGE>
The Rights are not exercisable until the Distribution Date. The Rights
will expire on December 31, 2010 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable and the number of shares of Preferred Stock or
other securities or property issuable upon exercise of the Rights 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 or purchase Preferred Stock at a price or
securities convertible into Preferred Stock with a conversion price less than
the then current market price of the Preferred Stock; or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of shares of Preferred
Stock issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.
The Preferred Stock purchasable upon exercise of the Rights will not be
subject to redemption by the Company. Each share of Preferred Stock will be
entitled to a minimum preferential quarterly dividend payment of $0.01 per share
but will be entitled to an aggregate dividend of 100 multiplied times the
dividend declared per share of Common Stock. In the event of liquidation, the
holder of the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $1.00 per share but will be entitled to an aggregate
payment of 100 multiplied times the payment made per share of Common Stock. Each
share of Preferred Stock will have 100 votes, voting together with the Common
Stock. Finally, in the event of any merger, consolidation or other transaction
in which Common Stock is exchanged, each share of Preferred Stock will be
entitled to receive 100 multiplied times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of
the Preferred Stock, the value of the one one-hundredth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
In the event that any person or entity becomes an Acquiring Person (the
beneficial owner of 15% or more of the Class A Common Stock), provision will be
made so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will then be void), will have the right to receive upon
exercise that number of shares of Class A Common Stock having a market value of
two times the applicable exercise price of the Right. In the event that the
Company is acquired in a merger or other business combination transaction, or
50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a Right will have the right to
receive, upon the exercise of the Right at the then applicable exercise price,
that number of shares of common stock of the acquiring company that at the time
of such transaction will have a market value of two times the applicable
exercise price of the Right.
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After a person becomes an Acquiring Person, the Company's Board of
Directors may exchange the Rights, other than those Rights owned by the
Acquiring Person, in whole or in part, at an exchange ratio of one share of
Class A Common Stock per Right, or one one-hundredth of a share of Preferred
Stock (or of a share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per Right, subject to
adjustment. However, the Board of Directors cannot conduct an exchange at any
time after any Person, together with its Affiliates and Associates, becomes the
Beneficial Owner of 50% or more of the outstanding Class A Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock will be issued and,
in lieu of such fractional shares, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading day prior to the
date of exercise.
At any time prior to the close of business on the tenth day following a
public announcement that an Acquiring Person has become such an Acquiring
Person, the Board of Directors may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right (the "Redemption Price"). Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date and subject to the last
sentence of this paragraph, the terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders of the Rights,
including, without limitation, an amendment to extend the time during which the
rights must be redeemed or to extend the Final Expiration Date. From and after
the Distribution Date and subject to applicable law no such amendment may
adversely affect the economic interests of the holders of the Rights (other than
the Acquiring Person or an affiliate or associate of an Acquiring Person). The
terms of the Rights may not be amended to (i) reduce the Redemption Price
(except as required by antidilution provisions) or (ii) provide for an earlier
Final Expiration Date.
Until a Right is exercised, the holder of the Right, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Preferred Stock shall rank, with respect to the payment of dividends
and as to distributions of assets upon liquidation, dissolution or winding up of
the Company, junior to all other series of preferred stock of the Company,
unless the Board of Directors of the Company shall specifically determine
otherwise in fixing the powers, preferences and relative, participating,
optional and other special rights of the shares of any such other series and the
qualifications, limitations and restrictions thereof.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
December 29, 2000. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
<PAGE>
EXHIBIT C
CERTIFICATE OF DESIGNATION
OF
SERIES G JUNIOR PARTICIPATING PREFERRED STOCK
OF
CARRIAGE SERVICES, INC.
-------------------------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
-------------------------------
CARRIAGE SERVICES, INCORPORATED, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify that, pursuant to the authority conferred on the Board of
Directors of the Corporation by the Certificate of Incorporation, as amended, of
the Corporation (the "Certificate of Incorporation") and in accordance with
Section 151 of the General Corporation Law of the State of Delaware (the
"DGCL"), the Board of Directors of the Corporation on December 18, 2000, adopted
the following resolution establishing and creating a series of Preferred Stock,
$0.01 par value, of the Corporation designated as Series G Junior Participating
Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Certificate of Incorporation, a series of Preferred Stock, $0.01 par
value, of the Corporation is hereby established and created, and that the
designation and number of shares thereof and the voting and other powers,
preferences and relative, participating, optional and other special rights
of the shares of such series, and the qualifications, limitations and
restrictions thereof, are as follows:
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SERIES G JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series G Junior Participating Preferred Stock" (the "Series G
Preferred Stock"). The number of shares initially constituting the Series G
Preferred Stock shall be 1,000,000; PROVIDED, HOWEVER, that if more than a total
of 1,000,000 shares of Series G Preferred Stock shall be issuable upon the
exercise of Rights (the "Rights") issued pursuant to the Rights Agreement dated
as of December 18, 2000 between the Corporation and American Stock Transfer and
Trust Company, as Rights Agent (the "Rights Agreement"), the Board of Directors
of the Corporation shall direct by resolution or resolutions that a certificate
be properly executed, acknowledged, filed and recorded providing for the total
number of shares of Series G Preferred Stock authorized to be issued to be
increased (to the extent that the Certificate of Incorporation then permits) to
the largest number of whole shares (rounded up to the nearest whole share)
issuable upon exercise of such Rights.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior rights of the holders of shares of
any other series of Preferred Stock or other class of stock of the Corporation
ranking prior and superior to the Series G Preferred Stock with respect to
dividends, the holders of shares of Series G Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors, out of the
assets of the Corporation legally available therefor, (i) quarterly dividends
payable in cash on the last day of each fiscal quarter in each year, or such
other dates as the Board of Directors of the Corporation shall approve (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 a fraction of a share of Series G Preferred Stock, in the amount
of $.01 per whole share (rounded to the nearest cent) less the amount of all
cash dividends declared on the Series G Preferred Stock pursuant to the
following clause (ii) 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 G Preferred Stock
(the total of which shall not, in any event, be less than zero) and (ii)
dividends payable in cash on the payment date for each cash dividend declared on
the Common Stock in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect multiplied
times the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any distribution on
the Common Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of Common
Stock), then, in each such case, the Corporation shall simultaneously pay or
make on each outstanding whole share of Series G Preferred Stock a dividend or
distribution in like kind equal to the Formula Number then in effect multiplied
times such dividend or distribution on each share of the Common Stock. As used
herein, the "Formula Number" shall be 100; PROVIDED, HOWEVER, that, if at any
time after December 18, 2000, the Corporation shall (x) declare or pay any
dividend on the Common Stock payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock, (y) subdivide (by a
stock split or otherwise) the outstanding shares of Common Stock into a larger
number of shares of Common Stock or (z) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares of Common
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Stock, then in each such event the Formula Number shall be adjusted to a number
determined by multiplying the Formula Number in effect immediately prior to such
event by a fraction, the numerator of which is the number of shares of Common
Stock that are outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that are outstanding immediately
prior to such event (and rounding the result to the nearest whole number); and
PROVIDED FURTHER, that, if at any time after December 18, 2000, the Corporation
shall issue any shares of its stock in a merger, reclassification, or change of
the outstanding shares of Common Stock, then in each such event the Formula
Number shall be appropriately adjusted to reflect such merger, reclassification
or change so that each share of Series G Preferred Stock continues to be the
economic equivalent of a Formula Number of shares of Common Stock prior to such
merger, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the Series
G Preferred Stock as provided in paragraph (a) of this Section immediately prior
to or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common Stock);
PROVIDED, HOWEVER, that, in the event no dividend or distribution (other than a
dividend or distribution solely in shares of Common Stock) 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 $.01 per share on the Series G Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date. The Board of Directors may
fix a record date for the determination of holders of shares of Series G
Preferred Stock entitled to receive a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series G Preferred Stock from and after the Quarterly Dividend Payment
Date next preceding the date of original issue of such shares of Series G
Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares which are
originally issued after the record date for the determination of holders of
shares of Series G Preferred Stock entitled to receive a quarterly dividend and
on or prior to the next succeeding Quarterly Dividend Payment Date shall begin
to accrue and be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of Series G Preferred Stock
which are originally issued prior to the record date for the determination of
holders of shares of Series G Preferred Stock entitled to receive a quarterly
dividend on the first Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter next preceding the
date of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series G 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.
(d) So long as any shares of the Series G Preferred Stock are outstanding,
no dividends or other distributions shall be declared, paid or distributed, or
set aside for payment or distribution, on the Common Stock unless, in each case,
the dividend required by this Section 2 to be declared on the Series G Preferred
Stock shall have been declared.
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<PAGE>
(e) The holders of the shares of Series G Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
Section 3. VOTING RIGHTS. The holders of shares of Series G Preferred
Stock shall have the following voting rights:
(a) Each holder of Series G Preferred Stock shall be entitled to a number
of votes equal to the Formula Number then in effect, for each share of Series G
Preferred Stock held of record on each matter on which holders of the Common
Stock or shareholders generally are entitled to vote, multiplied times the
maximum number of votes per share which any holder of the Common Stock or
shareholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law, the holders
of shares of Series G Preferred Stock and the holders of shares of Common Stock
shall vote together as one class for the election of directors of the
Corporation and on all other matters submitted to a vote of shareholders of the
Corporation.
(c) If, at the time of any annual meeting of shareholders for the election
of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series G Preferred Stock are in
default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series G Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of shareholders (and at any subsequent annual meeting of shareholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series G Preferred Stock being entitled to cast
a number of votes per share of Series G Preferred Stock equal to the Formula
Number. Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the shares of Series G Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series G Preferred Stock shall
be divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of
all persons who have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series G Preferred Stock in this Section 3.
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<PAGE>
(d) Except as provided in this Section 3, in Section 11 or by applicable
law, holders of Series G 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 authorizing or taking
any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series G 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 G Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series G Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series G Preferred Stock,
except dividends paid ratably on the Series G 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 stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series G 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 stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series G Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series G Preferred Stock, or any shares of stock ranking on a parity with
the Series G 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 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.
Section 5. REACQUIRED SHARES. Any shares of Series G Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled upon
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the acquisition thereof in accordance with the DGCL. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock,
without designation as to series, and may thereafter be issued as part of a new
series of Preferred Stock subject to the conditions and restrictions on issuance
set forth herein, in the Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock of the Corporation or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon the liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
no distribution shall be made (i) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series G Preferred Stock unless, prior thereto, the holders of shares of
Series G Preferred Stock shall have received an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, plus an amount equal to the greater of (x) $1.00 per whole
share and (y) an aggregate amount per share equal to the Formula Number then in
effect multiplied times the aggregate amount to be distributed per share to
holders of Common Stock, or (ii) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series G Preferred Stock, except distributions made ratably on the Series G
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination thereof, then in any
such case the then outstanding shares of Series G Preferred Stock shall at the
same time be similarly exchanged for or changed into an amount per share equal
to the Formula Number then in effect multiplied times the aggregate amount of
stock, securities, cash or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is exchanged or changed.
In the event both this Section 7 and Section 2 appear to apply to a transaction,
this Section 7 shall control.
Section 8. NO REDEMPTION; NO SINKING FUND.
(a) The shares of Series G Preferred Stock shall not be subject to
redemption by the Corporation; PROVIDED, HOWEVER, that the Corporation may
purchase or otherwise acquire outstanding shares of Series G Preferred Stock in
the open market or by offer to any holder or holders of shares of Series G
Preferred Stock.
(b) The shares of Series G Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
Section 9. RANKING. The Series G Preferred Stock shall rank, with respect
to the payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, junior to all other series of
Preferred Stock of the Corporation, unless the Board of
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Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of any such other series and the qualifications, limitations and
restrictions thereof.
Section 10. FRACTIONAL SHARES. The Series G Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth of a share
or any integral multiple of such fraction which shall entitle the holder, in
proportion to such holder's fractional shares, to receive dividends, exercise
voting rights, participate in distributions and to have the benefit of all other
rights of holders of Series G Preferred Stock. In lieu of fractional shares, the
Corporation, prior to the first issuance of a share or a fraction of a share of
Series G Preferred Stock, may elect (i) to make a cash payment as provided in
the Rights Agreement for fractions of a share other than one one-hundredth of a
share or any integral multiple thereof or (ii) to issue depository receipts
evidencing such authorized fraction of a share of Series G Preferred Stock
pursuant to an appropriate agreement between the Corporation and a depository
selected by the Corporation; PROVIDED that such agreement shall provide that the
holders of such depository receipts shall have all the rights, privileges and
preferences to which they are entitled as holders of the Series G Preferred
Stock.
Section 11. AMENDMENT. None of the powers, preferences or relative,
participating, optional or other special rights of the Series G Preferred Stock
as provided herein or in the Articles of Incorporation shall be amended in any
manner that would alter or change the powers, preferences, rights or privileges
of the holders of Series G Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least 66-2/3 percent of the
outstanding shares of Series G Preferred Stock, voting as a separate class.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be duly executed in its corporate name on this day of December
27, 2000.
CARRIAGE SERVICES, INC.
By /S/ MELVIN C. PAYNE
Melvin C. Payne, Chief Executive Officer
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