SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) JANUARY 28, 1999
TRAVEL SERVICES INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA
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(State or other jurisdiction of incorporation)
000-29298 52-2030324
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(Commission File Number) (IRS Employer Identification No.)
220 CONGRESS PARK DRIVE
DELRAY BEACH, FLORIDA 33445
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 266-0860
N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
ADOPTION OF SHARE PURCHASE RIGHTS PLAN AND BY-LAW AMENDMENTS
On January 28, 1999, the Board of Directors of Travel Services
International, Inc., dba The Travel Company (the "Company"), adopted a Share
Purchase Rights Plan (the "Rights Plan") and, in connection therewith, declared
a dividend distribution of one Common Stock Purchase Right on each outstanding
share of the Company's common stock. The Board of Directors also adopted various
amendments to the Company's Bylaws.
Each Right has an initial exercise price of $175.00 for one share of
the Company's common stock (subject to adjustment). The Rights will be
exercisable only if a person or group acquires 15% or more of the Company's
common stock or announces a tender or exchange offer the consummation of which
would result in ownership by a person or group of 15% or more of the common
stock. Upon any such occurrence, each Right will entitle its holder (other than
such person or group of affiliated or associated persons) to purchase, at the
Right's then-current exercise price, a number of the Company's common shares
having a market value of twice such price.
This description of the Rights Plan is not complete and is qualified in
its entirety by reference to the copy of the Rights Plan attached as Exhibit 4.1
hereto and the Press Release attached as Exhibit 99.1 hereto, which Exhibits are
both incorporated herein by reference.
Also on January 28, 1999, the Company's Board of Directors amended and
restated the Company's Bylaws to provide for certain procedures and other
provisions in connection with shareholder proposals, nominations, meetings,
actions by written consent and other matters. These include the addition of
procedures that authorize the Chairman of any shareholders' meeting to adjourn
the meeting, and for the Board to have authority to postpone a shareholders'
meeting by public announcement prior to the scheduled meeting date; specified
notice, timing and content requirements for shareholders to propose business to
be conducted at, or to nominate persons for election as directors at, annual or
special meetings of shareholders; procedures for shareholders to take action
without a meeting by written consent; and a provision authorizing the Board to
establish special voting and/or quorum requirements with respect to
authorizations, approvals and/or determinations by the Board (or by designated
directors or subgroups or committees of directors). This description of the
Company's amended Bylaws is not complete and is qualified in its entirety by
reference to the Company's Amended and Restated Bylaws attached as Exhibit 3.2
hereto and the Press Release attached as Exhibit 99.1 hereto, which Exhibits are
both incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
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3.1 Articles of Incorporation of the Registrant.(1)
3.1.2 Articles of Merger of Travel Services International, Inc.,
a Delaware corporation, into the Registrant.(2)
3.2 Amended and Restated Bylaws of the Registrant (as of
January 28, 1999).(2)
4.1 Rights Agreement, dated as of January 28, 1999, between
Travel Services International, Inc. and American Stock
Transfer & Trust Company.(2)
99.1 Press release, dated January 29, 1999, announcing the
Registrant's adoption of Share Purchase Rights Plan and
Bylaw amendments.(2)
99.2 Registrant's Registration Statement on Form 10-12G.(3)
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(1) Incorporated by reference to the same exhibit number filed as part of
the Registrant's Registration Statement on Form 10-12G, filed on
October 30, 1998.
(2) Filed herewith.
(3) Incorporated by reference to the Registrant's Registration Statement on
Form 10-12G, as amended by Amendment No. 2 filed on December 28, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRAVEL SERVICES INTERNATIONAL, INC.
Dated: January 29, 1999 By: /s/ JILL M. VALES
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Jill M. Vales
Senior Vice President and Chief
Financial Officer
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EXHIBIT 3.1.2
ARTICLES OF MERGER
OF
TRAVEL SERVICES INTERNATIONAL, INC., A DELAWARE CORPORATION
INTO
TRAVEL SERVICES GROUP, INC., A FLORIDA CORPORATION
Pursuant to the provisions of Section 607.1101 and Section 607.1105 of
the Florida Business Corporation Act, TRAVEL SERVICES INTERNATIONAL, INC., a
Delaware corporation ("Travel"), and TRAVEL SERVICES GROUP, INC., a Florida
corporation ("Acquisition"), hereby adopt the following Articles of Merger for
the purpose of merging Travel with and into Acquisition (the "Merger").
FIRST: The plan of merger, pursuant to Section 607.1101 of the Florida
Business Corporation Act ("the "FBCA"), is as set forth in these Articles of
Merger, including Exhibits A and B hereto (the "Plan of Merger").
SECOND: The Merger shall not be effective until 11:59 P.M. on Thursday,
December 31, 1998 (the "Effective Time"). At the Effective Time, Travel shall be
merged with and into Acquisition, with Acquisition being the surviving
corporation of the Merger (the "Surviving Corporation") and the separate
existence of Travel shall thereupon cease. The Merger shall have the effects set
forth in Section 607.1106 and Section 607.1107 of the FBCA.
THIRD: The Articles of Incorporation of Acquisition as in effect at the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation; provided, however, that Article I of the Surviving Corporation's
Articles of Incorporation is hereby amended and restated in its entirety,
effective as of the Effective Time, to read as follows: "The name of the
Corporation is Travel Services International, Inc. (hereinafter called the
"Corporation")." Exhibit B hereto sets forth the names and addresses of the
officers and directors of Travel, which persons shall become the officers and
directors of the Surviving Corporation at the Effective Time in accordance with
Section 6 of the Agreement and Plan of Merger, attached as Exhibit A hereto.
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FOURTH: The Plan of Merger was approved at a meeting of the
shareholders of Travel held on July 28, 1998 by the affirmative vote of a
majority of the outstanding shares of Travel common stock, and by written
consent of the Board of Directors and sole shareholder of Acquisition dated as
of October 22, 1998.
IN WITNESS WHEREOF, each of Travel and Acquisition have caused these
Articles of Merger to be signed in their respective corporate names and on their
behalf by an authorized officer, on this 30th day of December, 1998.
TRAVEL SERVICES INTERNATIONAL, INC.
By: /s/ JOSEPH V. VITTORIA
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Joseph V. Vittoria, Chief Executive Officer
TRAVEL SERVICES GROUP, INC.
By: /s/ JOSEPH V. VITTORIA
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Joseph V. Vittoria, Chief Executive Officer
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EXHIBIT 3.2
TRAVEL SERVICES INTERNATIONAL, INC.
(A FLORIDA CORPORATION)
AMENDED AND RESTATED
BYLAWS
(AS OF JANUARY 28, 1999)
ARTICLE I.
OFFICES
Section 1.1. REGISTERED OFFICE. The registered office of Travel Services
International, Inc. (hereinafter referred to as the "Corporation") shall be
located at 1201 Hays Street, Tallahassee, Florida 32301, c/o Corporation Service
Company.
Section 1.2. ADDITIONAL OFFICES. The Corporation may also have offices
at such other places, both within and outside the State of Florida, as the Board
of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 2.1. TIME AND PLACE. All meetings of shareholders for the
election of Directors shall be held at such time and place, either within or
outside the State of Florida, as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice of the meeting. Meetings of shareholders for any other purpose
may be held at such time and place either within or outside the State of Florida
as shall be stated in the notice of the meeting or in a duly executed waiver of
notice of the meeting.
Section 2.2. ANNUAL MEETING. Annual meetings of shareholders shall be
held for the purpose of electing a Board of Directors and transacting such other
business as may properly be brought before the meeting.
Section 2.3. NOTICE OF ANNUAL MEETING. Written notice of the annual
meeting, stating the place, date and time of such annual meeting, shall be given
to each shareholder entitled to vote at such meeting not less than ten (10)
(unless a longer period is required by law) nor more than sixty (60) days prior
to the meeting.
Section 2.4. CALL OF SPECIAL MEETING OF SHAREHOLDERS. Except as
otherwise required by law, special meetings of shareholders of the Corporation
may be called only by (i) the Board pursuant to a resolution approved by a
majority of the entire Board, (ii) the Company's Chairman of the Board or, if
the Chairman is not present or able (or if there is no Chairman), by the
Company's President or (iii) the holders of not less than fifty (50) percent of
all the votes entitled
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to be cast on any issue proposed to be considered at the proposed special
meeting, but only if such holders first deliver to the Corporation's secretary
one or more written demands (which shall be signed and dated) describing the
purpose or purposes for which the special meeting is to be held, in accordance
with all requirements of applicable law.
Section 2.5. NOTICE OF SPECIAL MEETING. Written notice of a special
meeting, stating the place, date and time of such special meeting and the
purpose or purposes for which the meeting is called, shall be given in
compliance with applicable law. Only such business shall be conducted at a
special meeting of shareholders as shall have been brought before the meeting
pursuant to the Corporation's notice of meeting.
Section 2.6. LIST OF SHAREHOLDERS. The officer in charge of the stock
ledger of the Corporation or the transfer agent shall prepare and make
available, at least ten (10) days before every meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number
of shares registered in the name of each shareholder. Such list shall be open to
the examination of any shareholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, at a place within the city where the meeting is to be held. Such
place, if other than the place of the meeting, shall be specified in the notice
of the meeting. The list shall also be produced and kept at the time and place
of the meeting during the whole time of the meeting and may be inspected by any
shareholder who is present.
Section 2.7. PRESIDING OFFICER. Meetings of shareholders shall be
presided over by the Chairman of the Board, if any, or if the Chairman is not
present (or if there is none), by the President, or, if the President is not
present, by a Vice President, or, if a Vice President is not present, by such
person who may have been chosen by the Board of Directors, or, if none of such
persons is present, by a Chairman to be chosen by the shareholders owning a
majority of the shares of capital stock of the Corporation issued and
outstanding and entitled to vote at the meeting and who are present in person or
represented by proxy. The Secretary of the Corporation, or, if the Secretary is
not present, an Assistant Secretary, or, if an Assistant Secretary is not
present, such person as may be chosen by the Board of Directors, shall act as
secretary of meetings of shareholders, or, if none of such persons is present,
the shareholders owning a majority of the shares of capital stock of the
Corporation issued and outstanding and entitled to vote at the meeting and who
are present in person or represented by proxy shall choose any person present to
act as secretary of the meeting.
Section 2.8. QUORUM AND ADJOURNMENTS; POSTPONEMENTS. (a) The
holders of a majority of the shares of capital stock of the Corporation issued
and outstanding and entitled to vote at shareholders meetings, present in person
or represented by proxy, shall be necessary to, and shall constitute a quorum
for, the transaction of business at all meetings of the shareholders, except as
otherwise provided by statute or by the Articles of Incorporation. The
shareholders present or in person or represented by proxy at a duly organized
meeting may continue to do business until final adjournment of such meeting
whether on the same day or on a later day, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum. If a meeting cannot be
organized because a quorum has not attended, or even if a quorum shall be
present or
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represented at any meeting of the shareholders, either the Chairman of the
meeting or the shareholders of a majority of the shares entitled to vote at such
meeting present in person or represented by proxy may adjourn the meeting from
time to time. Notice of the adjourned meeting need not be given if the time and
place of the adjourned meeting are announced at the meeting at which the
adjournment is taken. At any adjourned meeting at which a quorum is present in
person or represented by proxy of any class of stock entitled to vote separately
as a class, as the case may be, any business may be transacted which might have
been transacted at the meeting as originally called.
(b) Any previously scheduled meeting of the shareholders may be
postponed, and any special meeting of the shareholders (unless the special
meeting was called upon demand of shareholders in accordance with the
Corporation's Articles of Incorporation) may be cancelled, by resolution of the
Board of Directors upon "public announcement" (as defined in Section 2.11(c)(2)
hereof) given prior to the date previously scheduled for such meeting of
shareholders.
Section 2.9. VOTING.
(a) At any meeting of shareholders, every shareholder having the
right to vote shall be entitled to vote in person or by proxy, but no such proxy
shall be voted or acted upon after eleven (11) months from its date, unless the
proxy provides for a longer period. Except as otherwise provided by law or the
Articles of Incorporation, each shareholder of record shall be entitled to one
(1) vote for each share of capital stock registered in his name on the books of
the Corporation.
(b) At a meeting at which a quorum is present, all elections of
Directors shall be determined by a plurality vote, and, except as otherwise
provided by law or the Articles of Incorporation, all other matters shall be
approved if votes cast in favor of the matter exceed the votes cast in
opposition.
Section 2.10. INSPECTORS. When required by law or directed by the
presiding officer or upon the demand of any shareholder entitled to vote, but
not otherwise, the polls shall be opened and closed, the proxies and ballots
shall be received and taken in charge, and all questions touching the
qualification of voters, the validity of proxies and the acceptance or rejection
of votes shall be decided at any meeting of the shareholders by two or more
inspectors who may be appointed by the Board of Directors before the meeting, or
if not so appointed, shall be appointed by the presiding officer at the meeting.
If any person so appointed fails to appear or act, the vacancy may be filled by
appointment in like manner.
Section 2.11. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS.
(a) ANNUAL MEETING OF SHAREHOLDERS. (1) Nominations of persons
for election to the Board of Directors of the Corporation and the proposal of
business to be considered by the shareholders may be made at an annual meeting
of shareholders (A) pursuant to the Corporation's notice of meeting, (B) by or
at the direction of the Board of Directors or (C) by any shareholder of the
Corporation who was a shareholder of record at the time of giving of
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notice provided for in this Section 2.11, who is entitled to vote at the meeting
and who has complied with the notice procedures set forth in this Section 2.11.
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (C) of paragraph
(a)(1) of this Section 2.11, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation and such other business
must be a proper matter for shareholder action. To be timely, a shareholder's
notice shall be delivered to the Secretary at the principal executive offices of
the Corporation not later than the close of business on the 90th day nor earlier
than the close of business on the 120th day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the shareholder to be timely must be so
delivered not earlier than the close of business on the 120th day prior to such
annual meeting and not later than the close of business on the later of the 90th
day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made. In no event shall
the public announcement of an adjournment of an annual meeting commence a new
time period for the giving of a shareholder's notice as described above. Such
shareholder's notice shall set forth (A) as to each person whom the shareholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors in an election contest or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (B) as to any other
business that the shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (C) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such shareholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by such
shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this Section 2.11 to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of Directors made by the
Corporation at least 100 days prior to the first anniversary of the preceding
year's annual meeting, a shareholder's notice required by this Bylaw shall also
be considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
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(b) SPECIAL MEETING OF SHAREHOLDERS. Only such business shall be
conducted at a special meeting of shareholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of shareholders, properly called in accordance with these Bylaws and applicable
law, at which directors are to be elected pursuant to the Corporation's notice
of meeting (1) by or at the direction of the Board of Directors or (2) by any
shareholder of the Corporation who is a shareholder of record at the time of
giving of notice provided in this Bylaw, who shall be entitled to vote at the
meeting and who complies with the notice procedures set forth in this Section
2.11. In the event the Corporation calls a special meeting of shareholders for
the purpose of electing one or more directors to the Board of Directors, any
such shareholder may nominate a person or persons (as the case may be), for
election to such position(s) as specified in the Corporation's notice of
meeting, if the shareholder's notice satisfies the requirements under this
paragraph and is delivered to the Secretary at the principal executive offices
of the Corporation not earlier than the close of business on the 120th day prior
to such special meeting and not later than the close of business on the later of
the 90th day prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected at such
meeting. In no event shall the public announcement of an adjournment of a
special meeting commence a new time period for the giving of a shareholder's
notice as described above. Such shareholder's notice shall set forth (A) as to
each person whom the shareholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest or is otherwise required, in each case pursuant to Regulation 14A under
the Exchange Act and Rule 14a-11 thereunder (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (B) as to any other business that the notice or public
announcement of the special meeting indicates will be conducted at such special
meeting, a brief description of any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the nomination is
made; and (C) as to the shareholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination is made (i) the name and address of such
shareholder, as they appear on the Corporation's books, and of such beneficial
owner and (ii) the class and number of shares of the Corporation which are owned
beneficially and of record by such shareholder and such beneficial owner.
(c) NONCONFORMING REQUESTS; PUBLIC ANNOUNCEMENT; EXCHANGE ACT
COMPLIANCE. (1) Only such persons who are nominated in accordance with the
procedures set forth in this Section 2.11 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of shareholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 2.11. Except as otherwise provided by law, the
Articles of Incorporation or the Bylaws of the Corporation, the Chairman of the
meeting shall have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made, or proposed, as the
case may be, in accordance with the procedures set forth in this Section 2.11
and, if any proposed nomination or business is not in compliance with this
Bylaw, to declare that such defective proposal or nomination shall be
disregarded.
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(2) For purposes of these Bylaws, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
Section 2.11, a shareholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in these Bylaws. Except to the extent not prohibited by
applicable law, nothing in this Section 2.11 shall be deemed to affect any
rights of shareholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act
Section 2.12. ACTION BY CONSENT. (a) Unless otherwise provided in the
Articles of Incorporation, and subject to the requirements of law and these
Bylaws (including the following paragraphs of this Section 2.12), any action
required or permitted by law or the Articles of Incorporation to be taken at any
meeting of the shareholders may be taken without a meeting, without prior notice
and without a vote, if a written consent, setting forth the action so taken,
shall be signed by the holders of outstanding stock of each voting group
entitled to vote thereon having not less than the minimum number of votes with
respect to each voting group that would be necessary to authorize or take such
action at a meeting at which all voting groups and shares entitled to vote on
such action were present or represented by proxy and voted. Such written consent
shall be filed with the minutes of meetings of shareholders. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given in accordance with requirements of law to those
shareholders who have not so consented in writing.
(b) RECORD DATE FOR ACTION BY WRITTEN CONSENT. In order that the
Corporation may determine the shareholders entitled to consent to corporate
action in writing without a meeting, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which date
shall not be more than 10 days after the date upon which the resolution fixing
the record date is adopted by the Board of Directors. Any shareholder of record
seeking to have the shareholders authorize or take corporate action by written
consent shall, by written notice to the Secretary, request the Board of
Directors to fix a record date. The Board of Directors shall promptly, but in
all events within 10 days after the date on which such a request is received,
adopt a resolution fixing the record date. If no record date has been fixed by
the Board of Directors within 10 days of the date on which such a request is
received, the record date for determining shareholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is required by applicable law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in Florida,
its principal place of business or to any officer or agent of the Corporation
having custody of the book in which proceedings of meetings of shareholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
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Directors is required by applicable law, the record date for determining
shareholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which the Board of
Directors adopts the resolution taking such prior action.
(c) INSPECTORS OF WRITTEN CONSENT. In the event of the delivery,
in the manner provided by this Section 2.12, to the Corporation of the requisite
written consent or consents to take corporate action and/or any related
revocation or revocations, the Corporation shall engage nationally recognized
independent inspectors of elections for the purpose of promptly performing a
ministerial review of the validity of the consents and revocations. For the
purpose of permitting the inspectors to perform such review, no action by
written consent without a meeting shall be effective until such date as the
independent inspectors certify to the Corporation that the consents delivered to
the Corporation in accordance with this Section 2.12 represent at least the
minimum number of votes that would be necessary to take the corporate action.
Nothing contained in this paragraph shall in any way be construed to suggest or
imply that the Board of Directors or any shareholder shall not be entitled to
contest the validity of any consent or revocation thereof, whether before or
after such certification by the independent inspectors, or to take any other
action (including, without limitation, the commencement, prosecution or defense
of any litigation with respect thereto, and the seeking of injunctive relief in
such litigation).
(d) EFFECTIVENESS OF WRITTEN CONSENT. Every written consent shall
bear the date of signature of each shareholder who signs the consent and no
written consent shall be effective to take the corporate action referred to
therein unless, within 60 days of the date the earliest dated written consent
was received in accordance with this Section 2.12, a written consent or consents
signed by a sufficient number of holders to take such action are delivered to
the Corporation in the manner prescribed in this Section 2.12.
ARTICLE III.
DIRECTORS
Section 3.1. NUMBER AND TENURE; BOARD CLASSES. There shall be such
number of Directors constituting the entire Board of Directors, which shall in
no event be fewer than one (1) nor more than eleven (11) directors, as shall
from time to time be fixed by a resolution adopted by at least a majority vote
of the entire Board of Directors. The Corporation's Board of Directors shall be
classified with respect to the time for which they shall severally hold office
into three classes, Class I, Class II and Class III, as nearly equal in number
as possible. The initial Class I Directors shall be elected to hold office for
an initial term expiring at the 2001 annual meeting of shareholders, the initial
Class II Directors shall be elected to hold office for an initial term expiring
at the 1999 annual meeting of shareholders, and the initial Class III Directors
shall be elected to hold office for an initial term expiring at the 2000 annual
meeting of shareholders, with the members of each class of directors to hold
office until their successors have been duly elected and qualified. At each
annual meeting of shareholders, the successors to the class of directors whose
term expires at that meeting shall be elected to hold office for a term expiring
at the annual meeting of shareholders held in the third year following the year
of their election and until their successors have been duly elected and
qualified. No director or class of directors may
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be removed from office by a vote of the shareholders at any time except for
cause. Directors need not be shareholders.
Section 3.2. VACANCIES. Any vacancy on the Board of Directors resulting
from death, retirement, resignation, disqualification or removal from office or
other cause, as well as any vacancy resulting from an increase in the number of
directors which occurs between annual meetings of the shareholders at which
directors are elected, shall be filled only by a majority vote of the remaining
directors then in office, though less than a quorum, except that those vacancies
resulting from removal from office by a vote of the shareholders may be filled
by a vote of the shareholders at the same meeting at which such removal occurs.
The directors chosen to fill vacancies shall hold office for a term expiring at
the end of the next annual meeting of shareholders at which the term of the
class to which they have been elected expires. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
Notwithstanding the foregoing, whenever the holders of one or more
classes or series of Preferred Stock shall have the right, voting separately as
a class or series, to elect directors, the election, term of office, filling of
vacancies, removal and other features of such directorships shall be governed by
the terms of the resolution or resolutions adopted by the Board of Directors
pursuant to Article III of the Corporation's Articles of Incorporation
applicable thereto.
Section 3.3. RESIGNATION. Any Director may resign at any time by giving
written notice to the Chairman of the Board, the President or the Secretary of
the Corporation, or, in the absence of all of the foregoing, by notice to any
other Director or officer of the Corporation. Unless otherwise specified in such
written notice, a resignation shall take effect upon delivery to the designated
Director or officer. It shall not be necessary for a resignation to be accepted
before it becomes effective.
Section 3.4. PLACE OF MEETINGS. The Board of Directors may hold
meetings, both regular and special, either within or outside the State of
Florida.
Section 3.5. ANNUAL MEETING. Unless otherwise agreed by the newly
elected Directors, the annual meeting of each newly elected Board of Directors
shall be held immediately following the annual meeting of shareholders, and no
notice of such meeting to either incumbent or newly elected Directors shall be
necessary.
Section 3.6. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice, at such time and place as may from time to
time be determined by the Board of Directors. A copy of every resolution fixing
or changing the time or place of regular meetings shall be mailed to every
Director at least five days before the first meeting held in pursuance thereof.
Section 3.7. SPECIAL MEETINGS. Special Meetings of the Board of
Directors may be called by the Chairman of the Board or the President on at
least (1) day actual notice to each Director, if such Special Meeting is to be
conducted by means of conference telephone or similar communications equipment
in accordance with Section 3.11, and otherwise upon two (2) days'
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actual notice, if such notice is delivered personally or sent by telegram.
Special Meetings shall be called by the Chairman of the Board or the President
in like manner and on like notice on the written request of one-half or more of
the Directors then in office. The purpose of a Special Meeting of the Board of
Directors need not be stated in the notice of such meeting. Any and all business
other than an amendment of these Bylaws may be transacted at any special
meeting, and an amendment of these Bylaws may be acted upon if the notice of the
meeting shall have stated that the amendment of these Bylaws is one of the
purposes of the meeting. At any meeting at which every Director shall be
present, even though without any notice, any business may be transacted,
including the amendment of these Bylaws.
Section 3.8. QUORUM AND ADJOURNMENTS.
(a) GENERAL. Unless otherwise provided by or pursuant to the
Articles of Incorporation or these Bylaws, at all meetings of the Board of
Directors, a majority of the total prescribed number of Directors fixed pursuant
to Section 3.1 of these Bylaws shall constitute a quorum for the transaction of
business. If a quorum is not present at any meeting of the Board of Directors,
the Directors present may adjourn the meeting, from time to time, without notice
other than announcement at the meeting, until a quorum shall be present.
(b) SPECIAL QUORUM & VOTE REQUIREMENTS. The Board of Directors of
the Corporation shall have the power and authority to prescribe, permit or
require special quorum and/or vote requirements for directors (including of the
full Board of Directors or of any designated sub-group or committee of the Board
of Directors), in connection with any action, determination, authorization
and/or approval that the Board of Directors shall deem appropriate and shall
designate for such special quorum and/or vote requirements, subject to the
requirements of Section 607.0824 of the Florida Business Corporation Act. This
power and authority shall include, without limitation, the power and authority
to prescribe, permit or require special quorum and/or vote requirements for
directors (including, without limitation, special quorum or vote requirements
for the full Board of Directors or for any designated sub-group or committee of
the Board of Directors), in connection with any action, determination,
authorization and/or approval in connection with any share purchase rights, or
any agreement embodying or evidencing such share purchase rights, to be
authorized and issued by the Corporation. Notwithstanding the foregoing, unless
otherwise provided in the Articles of Incorporation (consistent with applicable
law), the Board of Directors shall not (i) with respect to any action which by
law requires action, authorization or approval of the Board of Directors, fix a
quorum of the Board of Directors at less than a majority of the number of
directors constituting the Board of Directors as prescribed by the Articles of
Incorporation or these Bylaws, or (ii) delegate to any committee or subgroup of
the Board of Directors any authorization or approval which, under and in
accordance with Florida law, may only be taken by the fully constituted Board of
Directors.
Section 3.9. PRESIDING OFFICER. Meetings of the Board of Directors shall
be presided over by the Chairman of the Board of Directors, if any, or if the
Chairman is not present (or if there is none), by the President, or, if the
President is not present, by such person as the Board of Directors may appoint
for the purpose of presiding at the meeting from which the President is absent.
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Section 3.10. ACTION BY CONSENT. Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee. Such consent shall have the same force and effect as the unanimous
vote of the Board of Directors.
Section 3.11. TELEPHONE MEETINGS. Members of the Board of Directors, or
any committee designated by the Board of Directors, may participate in a meeting
of the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
Section 3.12. COMPENSATION. The Board of Directors, by the affirmative
vote of a majority of the Directors then in office and irrespective of the
personal interest of any Director, shall have authority to establish reasonable
compensation for Directors for their services as such and may, in addition,
authorize reimbursement of any reasonable expenses incurred by Directors in
connection with their duties.
ARTICLE IV.
COMMITTEES
Section 4.1. COMMITTEES OF DIRECTORS. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, designate one
(1) or more committees, each committee to consist of two (2) or more Directors
of the Corporation. The Board of Directors may designate one (1) or more persons
who are not Directors as additional members of any committee, but such persons
shall be nonvoting members of such committee. The Board of Directors may
designate one (1) or more Directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the committee.
Each such committee, to the extent provided in such resolution or in the
articles of incorporation or the bylaws of the Corporation, shall have and may
exercise all the authority of the Board of Directors, except that no such
committee shall have the authority to: (A) approve or recommend to shareholders
actions or proposals required by the Florida Business Corporation Act to be
approved by shareholders; (B) fill vacancies on the Board of Directors or any
committee thereof; (C) adopt, amend, or repeal the Corporation's bylaws; (D)
authorize or approve the reacquisition of shares unless pursuant to a general
formula or method specified by the Board of Directors; or (E) authorize or
approve the issuance or sale or contract for the sale of shares, or determine
the designation and relative rights, preferences, and limitations of a voting
group except that the Board of Directors may authorize a committee (or a senior
executive officer of the Corporation) to do so within limits specifically
prescribed by the Board of Directors.
Section 4.2. MINUTES OF COMMITTEE MEETINGS. Unless otherwise provided in
the resolution of the Board of Directors establishing such committee, each
committee shall keep minutes of action taken by it and file the same with the
Secretary of the Corporation.
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Section 4.3. QUORUM. A majority of the number of Directors constituting
any committee shall constitute a quorum for the transaction of business, and the
affirmative vote of such Directors present at the meeting shall be required for
any action of the committee.
Section 4.4. VACANCIES, CHANGES AND DISCHARGE. The Board of Directors
shall have the power at any time to fill vacancies in, to change the membership
of and to discharge any committee.
Section 4.5. COMPENSATION. The Board of Directors, by the affirmative
vote of a majority of the Directors then in office and irrespective of the
personal interest of any Director, shall have authority to establish reasonable
compensation for committee members for their services as such and may, in
addition, authorize reimbursement of any reasonable expenses incurred by
committee members in connection with their duties.
ARTICLE V.
NOTICES
Section 5.1. FORM AND DELIVERY.
(a) Whenever, under the provisions of law, the Articles of
Incorporation or these Bylaws, notice is required to be given to any
shareholder, it shall not be construed to require personal notice unless
otherwise specifically provided, but such notice may be given in writing, by
mail, telecopy, telegram or messenger addressed to such shareholder, at his
address as it appears on the records of the Corporation. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail, with
postage prepaid.
(b) Whenever, under the provisions of law, the Articles of
Incorporation, or these Bylaws, notice is required to be given to any Director,
it shall not be construed to require personal notice unless otherwise
specifically provided, but such notice may be given in writing, by mail,
telecopy, telegram or messenger addressed to such Director at the usual place of
residence or business of such Director as in the discretion of the person giving
such notice will be likely to be received most expeditiously by such Director.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, with postage prepaid.
Section 5.2. WAIVER. Whenever any notice is required to be given under
the provisions of law, the Articles of Incorporation or these Bylaws, a written
waiver of notice, signed by the person or persons entitled to said notice,
whether before or after the time for the meeting stated in such notice, shall be
deemed equivalent to such notice.
ARTICLE VI.
OFFICERS
Section 6.1. DESIGNATIONS. The officers of the Corporation shall be
chosen and appointed by the Board of Directors. The Board of Directors may in
its discretion appoint any
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one or more of the following officers: a Chairman of the Board; a President; one
(1) or more Vice Presidents; a Secretary; a Treasurer; one (1) or more Assistant
Secretaries and one (1) or more Assistant Treasurers; and such other officers
and agents as it shall deem necessary or appropriate. Any officer of the
Corporation shall have the authority to affix the seal of the Corporation and to
attest the affixing of the seal by his signature. All officers and agents of the
Corporation shall exercise such powers and perform such duties as shall from
time to time be determined by the Board of Directors.
Section 6.2. TERM OF OFFICE AND REMOVAL. The Board of Directors at its
annual meeting after each annual meeting of shareholders or at a special meeting
called for that purpose shall choose officers and agents, if any, in accordance
with the provisions of Section 6.1. Each officer of the Corporation shall hold
office until his successor is elected and shall qualify. Any officer or agent
elected or appointed by the Board of Directors may be removed, with or without
cause, at any time by the affirmative vote of a majority of the Directors then
in office, or by other means permitted under an employment agreement or other
contract to which the Corporation and such person are parties. Any vacancy
occurring in any office of the Corporation may be filled for the unexpired
portion of the term by the Board of Directors.
Section 6.3. CHAIRMAN OF THE BOARD AND THE PRESIDENT. The Chairman of
the Board shall be the chief executive officer of the Corporation. If there is
no Chairman of the Board, the President shall be the chief executive officer of
the Corporation. The duties of the Chairman of the Board, and of the President
at the direction of the Chairman of the Board, shall be the following:
(i) Subject to the direction of the Board of Directors, to
have general charge of the business, affairs and property of the Corporation and
general supervision over its other officers and agents and, in general, to
perform all duties incident to the office of Chairman of the Board (or
President, as the case may be) and to see that all orders and resolutions of the
Board of Directors are carried into effect.
(ii) Unless otherwise prescribed by the Board of
Directors, to have full power and authority on behalf of the Corporation to
attend, act and vote at any meeting of security holders of other Corporations in
which the Corporation may hold securities. At such meeting the Chairman of the
Board (or the President, as the case may be) shall possess and may exercise any
and all rights and powers incident to the ownership of such securities that the
Corporation might have possessed and exercised if it had been present. The Board
of Directors or the Chairman of the Board may from time to time confer like
powers upon any other person or persons.
(iii) To preside over meetings of the shareholders and of
the Board of Directors, to call special meetings of shareholders, to be an
ex-officio member of all committees of the Board of Directors, and to have such
other duties as may from time to time be prescribed by the Board of Directors.
Section 6.4. THE VICE PRESIDENT. The Vice President, if any (or in the
event there be more than one (1), the Vice Presidents in the order designated,
or in the absence of any
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designation, in the order of their election), shall, in the absence of the
President or in the event of his inability or refusal to act, perform the duties
and exercise the powers of the President and shall generally assist the
President and the Chairman of the Board and perform such other duties and have
such other powers as may from time to time be prescribed by the Board of
Directors.
Section 6.5. THE SECRETARY. The Secretary shall attend all meetings of
the Board of Directors and all meetings of shareholders and record all votes and
the proceedings of the meetings in a book to be kept for that purpose and shall
perform like duties for any committees of the Board of Directors, if requested
by such committee. The Secretary shall give, or cause to be given, notice of all
meetings of shareholders and special meetings of the Board of Directors, and
shall perform such other duties as may from time to time be prescribed by the
Board of Directors or the President, under whose supervision he shall act. The
Secretary or an Assistant Secretary shall have custody of the seal of the
Corporation and shall have authority to affix the same to any instrument
requiring it, and, when so affixed, the seal may be attested by the signature of
the Secretary or by the signature of such Assistant Secretary.
Section 6.6. THE ASSISTANT SECRETARY. The Assistant Secretary, if any
(or in the event there be more than one (1), the Assistant Secretaries in the
order designated, or in the absence of any designation, in the order of their
election), shall, in the absence of the Secretary or in the event of the
Secretary's inability or refusal to act, perform the duties and exercise the
powers of the Secretary and shall perform such other duties and have such other
powers as may from time to time be prescribed by the Board of Directors.
Section 6.7. THE TREASURER. The Treasurer, if any, (and if none, then
the Corporation's chief financial officer shall have the duties of the Treasurer
hereunder) shall have the custody of the corporate funds and other valuable
effects, including securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may from time to time be designated by
the Board of Directors. The Treasurer shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the President and the Board of
Directors, at regular meetings of the board, or whenever they may require it, an
account of all his transactions as Treasurer and of the financial condition of
the Corporation.
Section 6.8. THE ASSISTANT TREASURER. The Assistant Treasurer, if any,
(or in the event there be more than one (1), the Assistant Treasurers in the
order designated, or in the absence of any designation, in the order of their
election), shall, in the absence of the Treasurer or in the event of the
Treasurer's inability or refusal to act, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have such other
powers as may from time to time be prescribed by the Board of Directors.
Section 6.9. TRANSFER OF AUTHORITY. In case of the absence of any
officer or for any other reason that the Board of Directors deems sufficient,
the Board of Directors may transfer the powers or duties of that officer to any
other officer or to any Director or employee of the Corporation, provided a
majority of the full Board of Directors concurs.
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ARTICLE VII.
STOCK CERTIFICATES; DIVIDENDS; CONTROL SHARES REDEMPTION
Section 7.1. FORM AND SIGNATURES. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by or in the name of
the Corporation, by the Chairman of the Board, the President or a Vice President
and the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Corporation, certifying the number and class (and series, if
any) of shares owned by him, and bearing the seal of the Corporation. Such seal
and any or all of the signatures on the certificate may be a facsimile. In case
any officer, transfer agent, or registrar who has signed, or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
Section 7.2. REGISTRATION OF TRANSFER. Upon surrender to the Corporation
or any transfer agent of the Corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the Corporation or its transfer
agent to issue a new certificate to the person entitled thereto, to cancel the
old certificate and to record the transaction upon its books.
Section 7.3. REGISTERED SHAREHOLDERS. Except as otherwise provided by
law, the Corporation shall be entitled to recognize the exclusive right of a
person who is registered on its books as the owner of shares of its capital
stock to receive dividends or other distributions, to vote as such owner, and to
hold liable for calls and assessments a person who is registered on its books as
the owner of shares of its capital stock. The Corporation shall not be bound to
recognize any equitable, legal or other claim to or interest in such share or
shares on the part of any other person whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
Section 7.4. ISSUANCE OF CERTIFICATES. No certificate shall be issued
for any share until (i) consideration for such share in the form of cash,
services rendered or contracts for services, personal or real property, leases
of real property or a combination thereof in an amount not less than the par
value or stated capital of such share has been received by the Corporation and
(ii) the Corporation has received a binding obligation of the subscriber or
purchaser to pay the balance of the subscription or purchase price.
Section 7.5. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board of
Directors may direct a new certificate to be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the Board of Directors may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate, or his legal representative, to advertise the
same in such manner as it shall require, and to give the Corporation a bond in
such sum, or other security in such form as it may direct, as indemnity
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against any claim that may be made against the Corporation on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.
Section 7.6. DIVIDENDS. Subject to the provisions of the Articles of
Incorporation, the Board of Directors shall have power to declare and pay
dividends upon shares of stock of the Corporation, but only out of funds
available for the payment of dividends as provided by law.
Section 7.7. REDEMPTION OF CONTROL SHARES. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the period ending 60
days after the last acquisition of control shares by the acquiring person. If a
person acquiring control shares of the Corporation files an acquiring person
statement with the Corporation, the control shares may be redeemed by the
Corporation, at the discretion of the Board of Directors, if such shares are not
accorded full voting rights by the shareholders as provided by law.
ARTICLE VIII.
INDEMNIFICATION
Section 8.1. DIRECTORS, OFFICERS. EMPLOYEES OR AGENTS.
(a) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a Director, officer or employee of the
Corporation, or is or was serving at the request of the Corporation as a
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner that he reasonably believed to be in or not opposed to the best interests
of the Corporation and, with respect to any criminal action or a proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a Director,
officer or employee of the Corporation, or is or was serving at the request of
the Corporation as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) and amounts paid in
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settlement not exceeding, in the judgment of the Board of Directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation and except that
no indemnification shall be made under this paragraph (b) in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the court in which
such action or suit was brought or other court of competent jurisdiction shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
(c) To the extent that a Director, officer, employee or agent of
the Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
Article VIII, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
Article VIII (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the Director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) and
(b) of this Article VIII. Such determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of Directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested Directors so
directs, by independent legal counsel in a written opinion or (3) by the
shareholders who were not parties to such action, suit or proceeding.
(e) Expenses incurred by an officer or Director in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such Director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
(f) The indemnification and advancement of expenses provided by
these Bylaws shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
agreement, vote of shareholders or disinterested Directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
(g) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
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(h) The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under this Article.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1. FISCAL YEAR. The fiscal year of the Corporation shall be as
determined from time to time by the Board of Directors.
Section 9.2. SEAL. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its incorporation and the words "Corporate
Seal" and "Florida." The seal or any facsimile thereof may be, but need not be,
unless required by law, impressed or affixed to any instrument executed by an
officer of the Corporation.
Section 9.3. CHECKS, NOTES, ETC. All checks, drafts, bills of exchange,
acceptances, notes or other obligations or orders for the payment of money shall
be signed and, if so required by the Board of Directors, countersigned by such
officers of the corporation and/or other persons as the Board of Directors from
time to time shall designate.
Checks, drafts, bills of exchange, acceptance notes, obligations and
orders for the payment of money made payable to the Corporation may be endorsed
for deposit to the credit of the Corporation with a duly authorized depository
by the Treasurer and/or such other officers or persons as the Board of Directors
from time to time may designate.
Section 9.4. LOANS. No loans and no renewals of any loans shall be
contracted on behalf of the Corporation except as authorized by the Board of
Directors. When authorized to do so, any officer or agent of the Corporation may
effect loans and advances for the Corporation from any bank, trust company, or
other institution or from any firm, corporation, or individual, and for such
other evidences of indebtedness of the Corporation. When authorized so to do,
any officer or agent of the Corporation may pledge, hypothecate or transfer, as
security for the payment of any and all loans, advances, indebtedness and
liabilities of the Corporation, any and all stocks, securities and other
personal property at any time held by the Corporation, and to that end may
endorse, assign and deliver the same. Such authority may be general or confined
to specific instances.
Section 9.5. CONTRACTS. Except as otherwise provided in these Bylaws or
as otherwise directed by the Board of Directors, the Chairman of the Board or
the President or any Vice President shall be authorized to execute and deliver,
in the name and on behalf of the Corporation, all agreements, bonds, contracts,
deeds, mortgages, and other instruments, either for the Corporation's own
account or in a fiduciary or other capacity, and the seal of the Corporation,
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if appropriate, shall be affixed thereto by any of such officers or the
Secretary or an Assistant Secretary. The Board of Directors, Chairman of the
Board or the President, or any Vice President designated by the Board of
Directors, may authorize any other officer, employee or agent to execute and
deliver, in the name and on behalf of the Corporation, agreements, bonds,
contracts, deeds, mortgages, and other instruments, either for the Corporation's
own account or in a fiduciary or other capacity and, if appropriate, to affix
the seal of the Corporation thereto. The grant of such authority by the Board or
any such officer may be general or confined to specific instances.
ARTICLE X.
AMENDMENTS
Section 10.1. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter and repeal the Bylaws of the Corporation.
18
EXHIBIT 4.1
================================================================================
TRAVEL SERVICES INTERNATIONAL, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGENT
SHARE PURCHASE RIGHTS PLAN
DATED AS OF JANUARY 28, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
----
Section 1. Certain Definitions.........................................1
Section 2. Appointment of Rights Agent.................................5
Section 3. Issuance of Rights Certificates.............................5
Section 4. Form of Rights Certificates.................................7
Section 5. Countersignature and Registration...........................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.........................................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. Common Stock Record Date...................................12
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights; Exchange of Rights for
Shares of Common Stock.....................................13
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares..................................................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..............................................21
Section 14. Fractional Rights and Fractional Shares....................23
Section 15. Rights of Action...........................................24
Section 16. Agreement of Rights Holders................................24
Section 17. Rights Certificate Holder Not Deemed a Shareholder.........25
Section 18. Concerning the Rights Agent................................25
Section 19. Merger or Consolidation or Change of Name of Rights
Agent......................................................25
Section 20. Duties of Rights Agent.....................................26
Section 21. Change of Rights Agent.....................................27
(i)
<PAGE>
Section 22. Issuance of New Rights Certificates........................28
Section 23. Redemption and Termination.................................28
Section 24. Notice of Certain Events...................................29
Section 25. Notices....................................................30
Section 26. Supplements and Amendments.................................30
Section 27. Successors.................................................31
Section 28. Determinations and Actions by the Board of Directors,
etc........................................................31
Section 29. Benefits of this Rights Plan...............................31
Section 30. Severability...............................................32
Section 31. Governing Law..............................................32
Section 32. Consent to Jurisdiction; Service of Process................32
Section 33. Counterparts...............................................32
Section 34. Descriptive Headings.......................................32
EXHIBITS
Exhibit A - Form of Rights Certificate
Exhibit B - Form of Summary of Rights
(ii)
<PAGE>
RIGHTS AGREEMENT, dated as of January 28, 1999 (the "Rights Plan" or
the "Agreement"), by and between Travel Services International, Inc., a Florida
corporation (the "Company"), and American Stock Transfer & Trust Company, a New
York corporation (the "Rights Agent").
RECITALS
WHEREAS, on January 28, 1999 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one common share purchase right (each, a "Right" and,
collectively, the "Rights") for each share of Common Stock, par value $0.01 per
share, of the Company outstanding at the close of business on January 28, 1999
(the "Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock issued (as hereinafter defined) between
the Record Date and the earliest to occur of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined), all on the terms and subject to the conditions set forth in this
Agreement; and
WHEREAS, each Right shall initially represent the right to purchase one
share of Common Stock, upon the terms and subject to the conditions hereinafter
set forth.
AGREEMENT -- SHARE PURCHASE RIGHTS PLAN
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Rights Plan, the
following terms have the meanings indicated (capitalized terms within any
definition shall have the meanings indicated elsewhere herein with respect to
such terms):
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of fifteen percent (15.0%) or more of the shares of Common
Stock then outstanding. Notwithstanding the foregoing, the term "Acquiring
Person" shall not mean or include (i) the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan; (ii) any Person who or
which, together with all Affiliates and Associates of such Person, would be an
Acquiring Person solely by reason of a reduction in the number of issued and
outstanding shares of Common Stock of the Company pursuant to a transaction or a
series of related transactions voted on and approved by a Majority Director Vote
(as defined below); provided, however, that in the event that such Person
described in the foregoing clause (ii) does not become an Acquiring Person by
reason of the foregoing clause (ii), such Person shall nonetheless become an
Acquiring Person in the event such Person thereafter acquires Beneficial
Ownership of an additional 1.0% of the issued and outstanding Common Stock of
the Company, unless such additional Common Stock ownership results solely from a
subsequent reduction in the number of issued and outstanding shares of Common
Stock of the Company pursuant to a transaction or a series of related
transactions approved by a Majority Director Vote; or (iii) any
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Person who or which, together with all Affiliates and Associates of such Person,
would be an Acquiring Person solely by reason of a transaction in which the
Company (or one or more of its Subsidiaries) acquires a business (whether such
acquisition is accomplished by means of a purchase of stock or assets, a merger,
share exchange or otherwise) owned by such Person in exchange (in whole or in
part) for shares of Common Stock of the Company pursuant to a transaction (or a
series of related transactions) approved by a Majority Director Vote (an
"Approved Acquisition Transaction"); provided, however, that in the event that
such Person described in the foregoing clause (iii) does not become an Acquiring
Person by reason of the foregoing clause (iii), such Person shall nonetheless
become an Acquiring Person in the event such Person thereafter acquires
Beneficial Ownership of an additional 1.0% of the issued and outstanding Common
Stock of the Company, unless such additional Common Stock ownership results
solely from a reduction in the number of issued and outstanding shares of Common
Stock of the Company (such as that described in clause (ii) above), or a
subsequent Approved Acquisition Transaction, pursuant to a transaction or a
series of related transactions approved by a Majority Director Vote.
(b) "Acquiring Person Transferee" shall have the meaning set
forth in Section 7(e) hereof.
(c) "Act" shall mean the Securities Act of 1933, as amended.
(d) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(e) "Associate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(f) A Person shall be deemed the "beneficial owner" of, and
shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which 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) pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own", (A) securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) any
security with respect to which such person has the right to vote pursuant to any
agreement, arrangement or understanding, if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act, and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Persons 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 proviso (B) to subparagraph (ii) of this Section 1(f)) or disposing
of any voting securities of the Company; provided, however, that nothing in this
Section 1(f) shall cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the date of
such acquisition.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding, together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(g) "Business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Florida are
authorized or obligated by law or executive order to close.
(h) "Close of business" on any given date shall mean 5:00
P.M., New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding day
which is a Business Day.
(i) "Common Stock" shall mean the common stock, par value
$0.01 per share, of the Company (including, without limitation, any such stock
designated as Restricted Voting Common Stock, and any shares of common stock
issuable upon conversion of such shares of Restricted Voting Common Stock),
except that "Common Stock" when used with reference to any Person other than the
Company shall 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.
(j) "Current market price" shall have the meaning set forth in
Section 11(d) hereof.
(k) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(l) "Exchange Act" shall have the meaning set forth in Section
1(d) hereof.
(m) "Exchange Ratio" shall have the meaning set forth in
Section 11(r)(i) hereof.
(n) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(p) "Independent Director" shall mean any member of the
Company's Board of Directors, while such person is a member of the Board, who
(i) is not an Acquiring Person or an
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Affiliate or Associate of an Acquiring Person, (ii) is not an employee or
officer of the Company or an employee, officer or director of any Acquiring
Person, and (iii) is not a relative or spouse of (A) an Acquiring Person, (B)
any officer or other person employed in a management position with the Company
or with any Acquiring Person or (C) any director of any Acquiring Person.
(q) "Majority Director Vote" shall mean (whether the reference
relates to a determination, approval or vote of the Board of Directors, the
Company or certain of the directors of the Company) the affirmative vote and
approval of the directors of the Company (duly elected or appointed in
accordance with the Company's By-laws) constituting a majority in number of the
total number of directors then constituting the Company's Board of Directors (as
authorized in accordance with the Company's By-laws); provided, however, that if
a Majority Director Vote is required or taken hereunder (or otherwise pursuant
to this Agreement) at any time on or after a Special Vote Event (as defined
below) shall have occurred, then, in addition to such vote and approval of the
full Board of Directors, the vote and approval of a majority of the Independent
Directors, if any, shall also be required. For purposes of this Agreement, a
"Special Vote Event" shall mean and include either (or the earlier of) (i) the
time any Person becomes an Acquiring Person, or (ii) the date of a change
(resulting from a proxy or consent solicitation) in a majority of the directors
of the Company in office at the commencement of such solicitation if any Person
who is a participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a majority of the Board of Directors of the
Company has determined in good faith) that such Person (or any of its Affiliates
or Associates) intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event. To the extent permitted or required under
Florida law, the authorization and approval of this Agreement by the Company's
Board of Directors shall also constitute the authorization and approval of the
special quorum and vote requirements with respect to the directors of the
Company (including any requirement with regard to a vote by or approval of
Independent Directors), as set forth or provided in this Agreement.
(r) "Person" shall mean any individual, firm, company,
corporation, partnership, trust or other entity.
(s) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(t) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(u) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(v) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(w) "Right" and "Rights" shall have the meanings set forth in
the recitals at the beginning of this Rights Plan.
(x) "Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(y) "Rights Dividend Declaration Date" shall have the meaning
set forth in the recitals at the beginning of this Rights Plan.
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(z) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(aa) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(bb) "Stock Acquisition Date" shall mean the first date of a
public announcement (which, for purposes of this definition, shall include a
report filed pursuant to the Exchange Act) by the Company or an Acquiring Person
that a Person has become an Acquiring Person.
(cc) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which a majority of the voting securities (or
voting power of the voting equity securities or interests) is beneficially
owned, directly or indirectly, by such Person.
(dd) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(ee) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(ff) "Triggering Event" shall mean (or, as the case may be,
the earliest of) a Section 11(a)(ii) Event or any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after such date
occurs before the Record Date, the close of business on the Record Date), or
(ii) the close of business on the tenth business day (or such later date as may
be determined by a Majority Director Vote prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) of, or of the first public announcement of the intention of
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the beneficial owner
of shares of Common Stock of the Company aggregating 15% or more of the then
outstanding shares of Common Stock of the Company (including any such date which
is after the date of this Agreement and prior to the issuance of the Rights)
(the earlier of such dates referred to in clauses (i) and (ii) of this sentence
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock of the Company
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registered in the names of the holders thereof (which certificates shall be
deemed also to be Rights Certificates) and not by separate certificates, and (y)
the Rights (and the right to receive Rights Certificates) will be transferable
only in connection with the transfer of the underlying shares of Common Stock of
the Company (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the Rights
Agent, if requested, will send) by first-class, insured, postage prepaid mail,
to each record holder of the Common Stock of the Company as of the close of
business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificate(s), in substantially the
form attached hereto as EXHIBIT A (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held (subject to adjustment as provided
herein). In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by the Rights
Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as EXHIBIT B (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock of the Company 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 shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the transfer (or surrender for transfer) of
any certificates representing shares of Common Stock outstanding on the Record
Date, with or without a Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the shares of Common Stock
represented thereby.
(c) Rights shall also be issued (consistent with the
provisions of subsection (a) of this Section 3) in respect of all shares of
Common Stock of the Company which are issued after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date. Certificates for shares of Common Stock (including, without
limitation, any reacquired shares referred to in the last sentence of this
Section 3(c)) which become outstanding after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Travel
Services International, Inc. (the "Company") and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent"), dated
as of January 28, 1999, as it may be amended from time to time (the
"Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in
the Agreement, such Rights (as defined in the Agreement) will be
evidenced by separate certificates and will no
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longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Agreement, as in effect on the
date of mailing, without charge after the receipt of a written request
therefor. Under certain circumstances set forth in the Agreement,
Rights issued to, or held or beneficially owned by, any Person who
becomes an Acquiring Person (as such terms are defined in the
Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, become null and void."
With respect to such certificate(s) containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Stock of the
Company represented by such certificate(s) shall be evidenced by such
certificate(s) alone, and the surrender for transfer of any such certificate(s)
shall also constitute the transfer of the Rights associated with the shares of
Common Stock of the Company represented thereby. In the event that the Company
purchases or acquires any Common Stock of the Company after the Record Date but
prior to the Distribution Date, any Rights associated with such reacquired
Common Stock of the Company shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the shares
of Common Stock of the Company which are no longer outstanding.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase Common Stock and of assignment to be printed on the reverse thereof)
shall each be in substantially the form attached hereto as EXHIBIT A and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Rights Plan, 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 stock quotation
or trading system on which the Rights may from time to time be listed or quoted
for trading, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated
as of the Record Date and shall entitle the holders thereof to purchase such
number of shares of Common Stock as shall be set forth therein at the price per
share of Common Stock set forth therein (as determined in accordance with
Section 7(b) hereof, the "Purchase Price"), but the number and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate thereof, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors (or directors, as the case may be) of the Company,
by a Majority Director Vote, has determined, in its sole discretion, is part of
a plan, scheme, arrangement or understanding which has as a primary purpose or
effect the avoidance or circumvention of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or
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Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person,
or an Affiliate or Associate thereof (as such terms are defined in a
Rights Agreement between Travel Services International, Inc. (the
"Company") and American Stock Transfer & Trust Company, as Rights Agent
(the "Agreement"). Accordingly, this Rights Certificate and the Rights
represented hereby become null and void in the circumstances specified
in Section 7(e) of the Agreement. The Company will mail to the holder
of this certificate a copy of the Agreement, as in effect on the date
of mailing, without charge after the receipt of a written request
therefor."
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer or its
President, either manually or by facsimile signature, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually or by facsimile
signature countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased
to be such officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company authorized to
sign such Rights Certificate, although at the date of the execution of this
Rights Plan 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
hereunder. Such books shall show the name and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the earlier of
the Redemption Date and the Final Expiration Date, any Rights Certificate or
Rights Certificates (other than any Right Certificates representing Rights that
have become void pursuant to Section 7(e) hereof or that have been exchanged
pursuant to Section 11(r) hereof) may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder thereof to purchase a like number of shares of Common Stock as
the Rights Certificate or Certificates surrendered then entitled such holder (or
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former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c) and Section 23(a) hereof), in whole or
in part, at any time after the Distribution Date, upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the principal office
of the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of shares of Common
Stock as to which the Rights evidenced by such Rights Certificate are exercised,
at or prior to the earliest of (i) the close of business on January 28, 2009
(the "Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
which the Rights are exchanged as provided in Section 11(r) hereof (the earliest
of (i), (ii) and (iii) being sometimes herein referred to as the "Expiration
Date").
(b) The Purchase Price for each share of Common Stock
purchasable pursuant to the exercise of a Right shall initially be $175.00, and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof, and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the
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Purchase Price for each share of Common Stock to be purchased upon exercise of
such Rights, as set forth below, and an amount equal to any applicable transfer
tax required to be paid by the holder of such Rights Certificate, the Rights
Agent shall, subject to Section 20(j) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Common Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Common Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected, in its sole discretion,
to deposit the total number of shares of Common Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of shares of Common Stock as
are to be purchased (in which case certificates for the shares of Common Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, 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 and any applicable
transfer taxes shall be made in cash or by certified bank check or cashier's
check payable to the Company.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Rights Plan to the
contrary, from and after the occurrence of a Section 11(a)(ii) Event, any Rights
that are or were acquired or beneficially owned by an Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) or an Acquiring Person
Transferee (as such term is defined below in this Section 7(e)), shall be and
become null and void without any further action, and no holder of such Rights
(or of Rights Certificates evidencing such Rights) shall have any rights
whatsoever with respect to such Rights (including, without limitation, any
rights to exercise such Rights), whether under any provision of this Rights Plan
or otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or any other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or their respective Affiliates, Associates or Acquiring Person
Transferees hereunder. No Rights Certificate(s) shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person (or any Associate or Affiliate thereof or any Acquiring Person
Transferee) whose Rights would be null and void pursuant to the preceding
sentence; in addition, no Rights Certificate(s) shall be issued at any time upon
the transfer of any Rights to an Acquiring Person (or any Associate or Affiliate
thereof or any Acquiring Person Transferee) whose Rights would be null and void
pursuant to the preceding sentence; and any Rights Certificate(s) delivered to
the Rights Agent for transfer to an Acquiring Person (or any Associate or
Affiliate thereof or any Acquiring Person Transferee) whose Rights would be null
and void pursuant to the preceding sentence shall be cancelled. For
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purposes of this Agreement, the term "Acquiring Person Transferee" shall mean
and include, with respect to Rights (whether or not attached to shares of Common
Stock), (i) a transferee of an Acquiring Person (or of any Associate or
Affiliate of such Acquiring Person) who becomes a transferee after the Acquiring
Person becomes such, or (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of Directors
of the Company has determined, in its sole discretion, is part of a plan,
scheme, arrangement or understanding which has as a primary purpose or effect
the avoidance or circumvention of this Section 7(e).
(f) Notwithstanding anything in this Rights Plan to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Plan. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) Subject to the Company's rights in Section 11(q) or
elsewhere herein to otherwise fulfill its obligations hereunder, the Company
covenants and agrees that, from and after the Distribution Date, it will cause
to be reserved and kept available out of its authorized and unissued shares of
Common Stock or any treasury shares of Common Stock not reserved for another
purpose the number of shares of Common Stock that, as provided in this Rights
Plan, will be sufficient to permit the exercise in full of all outstanding
Rights; provided, however, that the Company shall not be required to reserve and
keep available shares of 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) or Section 13 hereof unless the Rights become
exercisable pursuant to such adjustments.
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(b) So long as the shares of Common Stock issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange or, if the shares of Common Stock are not listed on any
national securities exchange or listed or registered for quotation on any other
market (including, without limitation, the NASDAQ Stock Market ("NASDAQ")), the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable and as required by law following the Distribution Date, a
registration statement under the Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, 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 date of the expiration or termination of the Rights. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
or periods of time from time to time, not to exceed ninety (90) days in the
aggregate after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Rights Plan to the contrary, the Rights
shall not be exercisable in any jurisdiction unless or until the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Common Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price
therefore), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for shares of Common Stock upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of
shares of Common Stock in respect of a name other than that of, the registered
holder of the Rights Certificates evidencing Rights surrendered for exercise or
to issue or deliver any certificates for shares of Common Stock in a name other
than that of the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
SECTION 10. COMMON STOCK RECORD DATE. Each person in whose name any
certificate for a number of shares of Common Stock (or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such shares of Common Stock
represented thereby on, and such certificates shall be dated, the
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date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Common Stock transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares of Common Stock for which the Rights shall be exercisable, including,
without limitation, the right to vote (on consent with respect thereto), to
transfer, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
meeting or proceeding of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS; EXCHANGE OF RIGHTS FOR SHARES OF COMMON STOCK. The Purchase
Price, the number and kind of shares of Common Stock covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding shares of Common Stock,
(C) combine the outstanding Common Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) or Section 7(e) hereof, the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) In the event that, at any time after the Rights
Dividend Declaration Date, any Person shall become an Acquiring Person (such
event being referred to herein as a "Section 11(a)(ii) Event"), then, subject to
Sections 11(r) and 23(a) and except as otherwise provided in this Section 11,
each holder of a Right (except as provided in Section 7(e) hereof) shall
thereafter have the right to receive, in accordance with the terms of this
Agreement, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of shares of Common Stock for which the Right is
then exercisable such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the number of shares of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of the Section 11(a)(ii) Event, and
dividing that product by (y) 50% of the then current market price (as determined
pursuant to Section 11(d)
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hereof) per share of the Common Stock of the Company on the date of the
occurrence of such Section 11(a)(ii) Event. In the event that there shall not be
sufficient shares of Common Stock authorized or available for issuance to permit
the exercise in full of the Rights in accordance with this Section 11(a)(ii),
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exercise of the Rights. In
the event that any Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action which would eliminate
or diminish the benefits intended to be afforded by the Rights as provided under
this Agreement.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within forty-five (45) calendar days after such
record date) to subscribe for or purchase Common Stock (or shares having the
same rights, privileges and preferences as the shares of Common Stock
("equivalent common stock")) or securities convertible into Common Stock or
equivalent common stock at a price per share of Common Stock or per share of
equivalent common stock (or having a conversion price per share, if a security
convertible into Common Stock or equivalent common stock) less than the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Common Stock on such record date, the Purchase Price to be in effect after such
record date, shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock and/or equivalent common stock so to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares of Common
Stock and/or equivalent common stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Common Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common 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 Common Stock, but including
any dividend payable in stock other than Common Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall
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be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Common Stock on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common Stock, and the
denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of Common Stock; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
market price" per share of Common Stock (or per share of any other security) on
any date shall be deemed to be the average of the daily closing prices per share
of such Common Stock (or per share of such other security) for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current market price
per share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution of such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day period
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the "current market price" shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock 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 shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock 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 shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as determined in
good faith by the Board of Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock (or applicable security) are listed
or admitted to trading is open for the transaction of business or, if the shares
or Common Stock (or other security) are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, "current market price" per share shall
mean the fair
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value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes of this Rights Plan.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1.0%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one-thousandth of a share of
Common Stock or other share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three (3) years from the date of the
transaction which requires such adjustment, or (ii) the date of the expiration
of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares or fraction of a share of capital
stock other than Common Stock, thereafter the number or fraction of such other
shares so receivable upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest one-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately
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after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated or par value, if any, of the
number of shares of Common Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
such number of duly authorized, fully paid and nonassessable shares of Common
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of Directors of the Company
shall determine in good faith by a Majority Director Vote to be advisable in
order that any (i) consolidation or subdivision of the Common Stock, (ii)
issuance wholly for cash of any shares of Common Stock at less than the current
market price, (iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable
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for shares of Common 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 Common Stock shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof) or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof or otherwise specifically permitted by this Rights Plan, 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.
(p) Anything in this Rights Plan to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine
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, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator which
shall be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately following the
occurrence of such event.
(q) In lieu of issuing shares of Common Stock in accordance
with Section 11(a)(ii) hereof, the Board of Directors may, if the number of
shares of Common Stock which are authorized by the Company's Articles of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit the exercise in
full of the Rights in accordance with Section 11(a)(ii) hereof, the Board of
Directors shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine the
value of the shares of Common Stock (the
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"Adjustment Shares") issuable upon the exercise of a Right immediately after the
adjustments provided for in Section 11(a)(ii) (the "Current Value"), and (B)
with respect to each Right (other than Rights which have become void pursuant to
the provisions hereof), make adequate provision to substitute for any or all
such Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock which are deemed in good faith by
the Board of Directors to have substantially the same value as shares of Common
Stock (such shares or units of shares of preferred stock are herein called
"Common Stock equivalents")), (3) debt securities of the Company, (4) other
assets, (5) a reduction of the Purchase Price, or (6) any combination of the
foregoing having a value which, when added to the value of the shares of Common
Stock actually issued upon exercise of such Right, shall have an aggregate value
equal to the Current Value, where such aggregate value has been determined in
good faith by the Board of Directors based upon the advice of a nationally
recognized independent investment banking firm selected in good faith by the
Board of Directors; provided that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the date (the "Section 11(a)(ii) Trigger Date") which is the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a) expires, then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares and
cash have an aggregate value equal to the excess of (x) the Current Value over
(y) the Purchase Price for the number of shares (or fraction of a share) of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event. If, upon the occurrence of a Section
11(a)(ii) Event, the number of shares of Common Stock that are authorized by the
Company's Articles of Incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not sufficient to permit
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, and
if the Board of Directors shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, then, if the Board of Directors so elects,
the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such thirty (30) day period, as it may
be extended, is herein called the "Substitution Period"). To the extent that the
Company determines that some action must be taken pursuant to the first or
second sentence of this Section 11(q), the Company (x) shall provide, subject to
Section 7(e) hereof and the last sentence of this Section 11(q), that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such times
as the suspension is no longer in effect. For purposes of this Section 11(q),
the value of the Common Stock shall be the current market price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "Common Stock equivalent" shall be deemed to equal the current
market price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(q).
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(r) (i) The Board of Directors of the Company may, at its
option upon approval by a Majority Director Vote, at any time after any Person
becomes an Acquiring Person, exchange shares of Common Stock for all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof), at an
exchange ratio of one (1.0) share of Common Stock per Right, appropriately
adjusted to reflect any adjustment in the number of Rights pursuant to Section
11(a)(i) hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding Common Stock 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
shares of Common Stock then outstanding.
(ii) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (i) of this Section 11(r) and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the 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.
(iii) In the event that there shall not be sufficient
shares of Common Stock available for issuance to permit any exchange of Rights
as contemplated in accordance with this Section 11(r), the Company shall either
take such action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights or, alternatively, at the option
and in the sole discretion of the Board of Directors (or directors, as the case
may be), approved by a Majority Director Vote, in lieu of issuing Common Stock
in exchange for each such Right, (x) pay cash in an amount equal to the Current
Value (as hereinafter defined), (y) issue debt or equity securities or a
combination thereof, having a value equal to the Current Value, where the value
of such securities shall be determined by the Board of Directors in good faith
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors, or (z) deliver any combination of cash,
property, Common Stock and/or other securities having a value equal to the
Current Value (again, where the value of such securities shall be determined by
the Board of Directors in good faith based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors). For
purposes of this paragraph (iii) only, the term "Current Value" shall mean the
product of the current market price per share of Common Stock (determined
pursuant to Section 11(d) as of the Stock Acquisition Date) multiplied by the
number of shares of Common Stock for which the Right otherwise would be
exchangeable if there were sufficient shares available. To the extent that the
Company
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determines that some action need be taken pursuant to clauses (x), (y) or (z) of
this paragraph (iii), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to ninety (90) days following
the Stock Acquisition Date, in order to seek any authorization of additional
shares of Common Stock and/or to decide the appropriate form of distribution to
be made pursuant to this paragraph (iii) and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with the transfer agent for the
Common 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 hereof.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer)
in one transaction or a series of related transactions, assets or earning power
aggregating 50% or more 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(o) hereof), then, and in each such case, proper
provisions shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof, in accordance with the terms of this Rights Plan, such number
of duly and validly authorized and issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event, and dividing that product (which product, following the
first occurrence of a Section 13 Event, shall be the aggregate "Purchase Price"
for all the securities that may be purchased pursuant to the Right upon the
adjustment pursuant to this clause (i) and for all purposes of this Rights Plan)
by (2) 50% of the current market price (determined pursuant to Section 11(d)
hereof) per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party (I.E., the
issuer of such shares) shall thereafter be liable for, and shall assume, by
virtue of
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such Section 13 Event, all the obligations and duties of the Company pursuant to
this Rights Plan; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with the provisions of this Rights
Plan) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, 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 (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
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" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer (or any other transaction constituting a Section 13
Event) unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets (or any other transaction constituting a Section 13
Event), 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 (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
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(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a). The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would be
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 shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed 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 determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise or exchange of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised or exchanged as
herein provided an amount in cash equal to the same fraction of the current
market value of a share of Common Stock. For purposes of this Section 14(b), the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
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(c) The holder of a Right, by the acceptance of the Right,
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right, except as permitted by
this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Plan 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, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate and in this Rights
Plan. Without limiting the foregoing or any remedies available to the holders of
the Rights, it is specifically acknowledged that the holders of the Rights would
not have an adequate remedy at law for any breach of this Agreement, and shall
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
acceptance of the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of 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;
(c) subject to Section 6(a) and Section 7(f) hereof, 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 Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the second sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Rights Plan to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Rights Plan by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligations.
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SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote (or consent
with respect to), receive dividends or be deemed for any purpose whatsoever the
holder of shares of Common Stock or of any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings,
proceedings or other actions affecting shareholders (except as provided in
Section 24 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Rights Plan and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Rights Plan.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Plan in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights Plan
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; PROVIDED, HOWEVER, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Rights Plan any of the Rights Certificates shall
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 shall not have 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
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Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Plan.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Rights Plan.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Rights Plan upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel acceptable
to the Company (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Plan the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Rights Plan in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Plan or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Plan or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for the manner,
method or amount of any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Rights Plan or any Rights
Certificate or as to whether any shares of Common Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
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(e) 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 Rights Plan.
(f) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the Secretary or
the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(g) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Rights Plan. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(i) No provision of this Rights Plan shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights Plan
upon sixty (60) days' notice in writing mailed to the Company, and to each
transfer agent of the Common 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 thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to the transfer agent of the Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of sixty (60) days
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after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then 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, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property and records at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Rights Plan or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Rights Plan. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter 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 (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option,
as approved by a Majority Director Vote, at any time prior to the earlier of (i)
the time that any Person becomes an Acquiring Person, or (ii) the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The
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<PAGE>
redemption of the Rights pursuant to this Section 23(a) may be made effective at
such time, on such basis and with such conditions as the Board of Directors of
the Company, in its sole discretion, may establish (as approved by a Majority
Director Vote).
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and 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 Common Stock; provided, however,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 11(r) hereof, and other than in connection with the purchase of shares
of Common Stock prior to the Distribution Date.
SECTION 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Common Stock or to make any other distribution to the holders of
Common 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 Common
Stock rights or warrants to subscribe for or to purchase any additional shares
of Common Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), 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 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Common Stock for purposes
of such action, and in the case of any such other action, at least twenty (20)
days prior to the date of the taking of such proposed
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<PAGE>
action or the date of participation therein by the holders of the shares of
Common Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Common Stock shall be deemed thereafter
to refer, if appropriate, to other securities.
(c) The failure to give notice required by this Section 24 or
any defect therein shall not affect the legality or validity of the action taken
by the Company or the vote on any such action.
SECTION 25. NOTICES. Notices or demands authorized by this Rights Plan
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Travel Services International, Inc.
220 Congress Park Drive
Delray Beach, FL 33445
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Plan to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Corporate Trust Department
Notices or demands authorized by this Rights Plan 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 Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage pre-paid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. The Company may, and the Rights
Agent shall if the Company so directs, from time to time, supplement or amend
this Agreement without the approval of any holder(s) of Rights Certificates in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions with respect to the Rights which the Company may
deem necessary or desirable, any such supplement or amendment to be approved by
a Majority Director Vote and evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that, from and after such time as any
Person becomes an Acquiring
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<PAGE>
Person, this Agreement shall not be amended in any manner which would adversely
affect the interests of the holders of Rights. Without limiting the foregoing,
the Company may, at any time prior to such time as any Person becomes an
Acquiring Person, amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) hereof to not less than the greater of (a) the sum of
.001% and the largest percentage of the outstanding shares of Common Stock then
known by the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company, or any entity holding shares of Common Stock
for or pursuant to the terms of any such plan) and (b) 10.0%. 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 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Plan to the contrary, no
supplement or amendment may be made after the time that any Person becomes an
Acquiring Person unless such supplement or amendment (i) does not adversely
affect the interests of the holders of Rights, and (ii) is approved by a
Majority Director Vote.
SECTION 27. SUCCESSORS. All the covenants and provisions of this Rights
Plan by or for the benefit of the Company or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Rights Plan, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company (where
specifically provided for herein, by the requisite vote and/or with the approval
of Independent Directors (where a Majority Director Vote is required)) shall
have the exclusive power and authority to administer this Rights Plan and to
exercise all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the approval of Independent Directors (where a
Majority Director Vote is required)) or to the Company, or as may be necessary
or advisable in the administration of this Rights Plan, including, without
limitation, the right and power to (i) interpret the provisions of this Rights
Plan and (ii) make all determinations deemed necessary or advisable for the
administration of this Rights Plan (including a determination to redeem or not
redeem the Rights, to exchange the Rights or to amend or supplement this Rights
Plan). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board (with, where specifically
provided for herein, the approval of Independent Directors (where a Majority
Director Vote is required)) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (y) not subject the Board or the Independent Directors (if
applicable) to any liability to the holders of the Rights.
SECTION 29. BENEFITS OF THIS RIGHTS PLAN. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the 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; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
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<PAGE>
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Without limiting the foregoing, if any provision requiring that a determination,
vote or approval be made by less than the entire Board (or at a time or with the
concurrence of a group of directors consisting of less than the entire Board) is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, such determination, vote or approval shall then be made by the
full Board of Directors in accordance with applicable law and the Company's
Articles of Incorporation and By-laws.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Florida and for all purposes shall 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.
SECTION 32. CONSENT TO JURISDICTION; SERVICE OF PROCESS. The Company,
the Rights Agent and the holders of the Rights Certificates hereby irrevocably
submit to the jurisdiction of the state or federal courts located in Miami-Dade
County, Florida in connection with any suit, action or other proceeding arising
out of or relating to this Rights Plan and the transactions contemplated hereby,
and hereby agree not to assert, by way of motion, as a defense, or otherwise in
any such suit, action or proceeding that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Rights Plan or the subject matter hereof may
not be enforced by such courts.
SECTION 33. COUNTERPARTS. This Agreement may be executed in
counterparts and both of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Rights Plan are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Plan to
be duly executed and attested, all as of the date first above written.
TRAVEL SERVICES INTERNATIONAL, INC.
By:/s/ Joseph H. Vittoria
----------------------
Name: Joseph H. Vittoria
------------------
Title: Chairman and Chief Executive Officer
------------------------------------
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<PAGE>
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:/s/ Herbert J. Lemmar
---------------------
Name: Herbert J. Lemmar
-----------------
Title: Vice President
--------------
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<PAGE>
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
TRAVEL SERVICES INTERNATIONAL, INC.
Certificate No. R-_____________________ __________________________ Rights
NOT EXERCISABLE AFTER ___________, 2009 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.001 PER RIGHT, AND TO EXCHANGE, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS PLAN) AND ANY TRANSFEREE
OR SUBSEQUENT HOLDER OF THE RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS PLAN). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)
RIGHTS CERTIFICATE
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 __________, 1999 (the "Rights
Plan"), between Travel Services International, Inc., a Florida corporation (the
"Company"), and ____________________ (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (New York time) on ____________, 2009 at
the office or offices of the Rights Agent designated for such purpose, or its
successor(s) as Rights Agent, one (1) fully paid, non-assessable share of common
stock, par value $0.01 per share (the "Common Stock"), of the Company (or in
certain circumstances, cash, property or other securities), at a purchase price
of $___.00 per share of Common Stock (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The Purchase Price shall be paid in cash.
The number of Rights evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of _________, __1999, based on the Common Stock as constituted at such date.
- ----------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
<PAGE>
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Plan), if the Rights evidenced by this Rights Certificate
are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Plan), or (ii) an Acquiring
Person Transferee (as such term is defined in the Rights Plan), such Rights
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Plan, the Purchase Price and the number and
kind of shares of Common Stock or other capital stock or other securities, which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as such term is defined in the
Rights Plan).
This Rights Certificate, and the Rights evidenced hereby, are subject
to all of the terms, provisions and conditions of the Rights Plan, which terms,
provisions and conditions are hereby incorporated herein by reference and made a
part hereof and to which Rights Plan reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder and thereunder of the Rights Agent, the Company and the
holders of the Rights Certificates, which limitations of rights include (without
limitation) the temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Plan. In the event of any
conflict or inconsistency between the terms, provisions and conditions of Rights
as set forth in the Rights Plan and those described or set forth in this Rights
Certificate, the terms, provisions and conditions set forth in the Rights Plan
shall govern and prevail. Copies of the Rights Plan are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
If this Rights Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised. 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 of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase.
Subject to the terms, provisions and conditions of the Rights Plan, the
Rights evidenced by this Certificate (i) may be redeemed by the Company at its
option at a redemption price of $.001 per Right or (ii) may be exchanged in
whole or in part for shares of Common Stock. Under certain circumstances set
forth in the Rights Plan, the decision to redeem shall require the concurrence
of a majority of the members of the full Board of Directors and a majority of
any Independent Directors (as such term is defined in the Rights Plan). The
Rights Plan is also subject to amendment and supplement by the Company, on the
terms and conditions set forth in the Rights Plan.
No fractional shares of Common 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 Plan.
A-2
<PAGE>
No holder of this Rights Certificate shall be entitled to vote (or
consent with respect to) or receive dividends or be deemed for any purpose the
holder of shares of Common Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Plan or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting or proceeding thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Plan), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Plan.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ______________, 19__
ATTEST: TRAVEL SERVICES INTERNATIONAL, INC.
By:_________________________________ By:___________________________________
Name: Name:
Title: Title:
Countersigned:
[RIGHTS AGENT]
By:_________________________________
Authorized Signature
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 transfers unto _____________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together will 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:_____________________, 19__
__________________________________
Signature
SIGNATURE GUARANTEE:
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.
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>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person, an Acquiring Person Transferee or an Affiliate or Associate thereof (as
such terms are defined under the Rights Plan);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was or subsequently became an
Acquiring Person, an Acquiring Person Transferee or an Affiliate or Associate
thereof (as such terms are defined under the Rights Plan).
Dated:_______________, 19__
__________________________________
Signature
SIGNATURE GUARANTEE:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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-5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: [Company Name]:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated:______________, 19__
__________________________________
Signature
A-6
<PAGE>
SIGNATURE GUARANTEE:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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-7
<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,
an Acquiring Person Transferee or an Affiliate or Associate thereof (as such
terms are defined under the Rights Plan);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was or became an Acquiring Person, an
Acquiring Person Transferee or an Affiliate or Associate thereof (as such terms
are defined under the Rights Plan).
Dated:_________________, 19__
__________________________________
Signature
SIGNATURE GUARANTEE:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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-8
<PAGE>
EXHIBIT B
[TRAVEL SERVICES INTERNATIONAL, INC. LETTERHEAD]
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
_____________ __, 1999
To Our Shareholders:
On ___________, 1999, your Board of Directors adopted a share purchase
rights plan (the "Rights Plan") and declared a dividend distribution of one
right (a "Right") for each outstanding share of common stock, par value $0.01
per share (the "Common Stock"), of the Company to shareholders of record at the
close of business on ___________, 1999. Each Right entitles the registered
holder to purchase from the Company one (1) share of Common Stock (or in certain
circumstances, cash, property or other securities) at a price of $___.00 per
share (the "Purchase Price"), subject to adjustment. This letter describes the
Board's reasons for adopting the Rights Plan and summarizes certain material
terms of the Rights Plan.
FLIP-IN
In the event that any person or group of affiliated or associated
persons acquires beneficial ownership of 15% or more of the outstanding shares
of Common Stock (an "Acquiring Person"), each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise price of the
Right. Issuances (and consequent beneficial ownership) of Common Stock (at or in
excess of such 15% threshold) by the Company in connection with certain
acquisition transactions effected by the Company and approved by the Board of
Directors are excepted from this provision.
FLIP-OVER
If 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
after a person or group has become an Acquiring Person, each holder of a Right
(other than Rights beneficially owned by the Acquiring Person, which will be
void) will thereafter have the right to receive that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
DISTRIBUTION DATE
The distribution date is the earlier of:
B-1
<PAGE>
(i) 10 days following a public announcement that a person or group of
affiliated or associated persons have acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock; or
(ii) 10 business days (or such later date as may be determined by
action of the Board of Directors of the Company prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding shares of
Common Stock.
TRANSFER AND DETACHMENT
Until the Distribution Date, the Rights will be evidenced, with respect
to any of the Common Stock certificate(s) outstanding as of the Record Date, by
such Common Stock certificate(s) with a copy of this Summary of Rights attached
thereto. Until the Distribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with the shares of Common
Stock, no separate rights certificates will be issued and transfer of Common
Stock certificates will also constitute transfer of these Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the shares of Common Stock as of the close of business on
the Distribution Date, and such separate Right Certificates alone will
thereafter evidence the Rights.
EXERCISABILITY
The Rights are not exercisable until the Distribution Date. The Rights
will expire on _____________, 2009 (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, on the terms and conditions set forth in
the Rights Plan (as described below).
ADJUSTMENTS
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution in the event of stock
dividends, stock splits, reclassifications, or certain distributions with
respect to the Common Stock. The number of outstanding Rights and the number of
shares of Common Stock issuable upon exercise of each Right are also subject to
adjustment if, prior to the Distribution Date, there is a stock split of the
Common Stock or a stock dividend on the Common Stock payable in shares of Common
Stock or subdivisions, consolidations or combinations of the Common Stock. With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1.0% in such Purchase
Price. No fractional shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Common Stock on the last
trading day prior to the date of exercise.
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<PAGE>
EXCHANGE
At any time after any person or group becomes an Acquiring Person, and
prior to the acquisition by any such person or group of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person, which will
have become void), in whole or in part, for shares of Common Stock, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
REDEMPTION
At any time prior to any person or group becoming an Acquiring Person,
the Board of Directors of the Company may redeem the Rights, in whole but not in
part, at a price of $.001 per Right (the "Redemption Price"). If, however, such
redemption is authorized on or after the date of a change (resulting from a
proxy contest or consent solicitation) in a majority of the directors in office,
then such redemption must be approved by a majority of Independent Directors (as
defined in the Rights Plan), if any, and by a majority of the full board of
directors. The redemption of the Rights may be made effective at such time on
such basis with such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
AMENDMENTS
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 an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding shares of Common
Stock then known to the Company to be beneficially owned by any person or group
of affiliated or associated persons and (ii) 10%, except that from and after
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
INTERPRETATION; BOARD APPROVALS
The Board of Directors of the Company has the sole authority to
administer the Rights Plan and to exercise all rights and powers granted to the
Board or to the Company, or as are advisable in the administration of the Rights
Plan, including the power to (i) interpret the provisions of the Rights Plan and
(ii) make all determinations appropriate for the administration of the Rights
Plan (including a determination to redeem or not redeem the Rights, to exchange
the Rights or to amend the Rights Plan). All such interpretations and
determinations in good faith are final and binding on the parties (including the
Rights holders) and do not subject the Board (or the directors) to any liability
to the holders of Rights. In the event a vote, approval or determination of the
Board of Directors (including a determination to redeem or not redeem the
Rights, to exchange the Rights or to amend or supplement the Rights Plan) occurs
at any time after either a Person becomes an Acquiring Person or a change
(resulting from a proxy contest or consent solicitation) in a majority of the
directors in office, then such vote, approval or determination must
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<PAGE>
be approved by a majority of Independent Directors (as defined in the Rights
Plan), if any, and by a majority of the full board of directors.
RIGHTS AND HOLDERS
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
FURTHER INFORMATION
A copy of the Agreement setting forth the Rights Plan has been filed
with the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated ______________, 1999. A copy of the Rights Plan 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 Agreement, which is hereby incorporated herein by reference.
EXHIBIT 99.1
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Suzanne B. Bell Joseph V. Vittoria Doug DeLieto Christina Howard
General Counsel Chief Executive Officer (General Info.) (Analysis Info.)
(561) 266-0860 (212) 661-8030
THE TRAVEL COMPANY ADOPTS SHARE PURCHASE RIGHTS PLAN
AND BY-LAW AMENDMENTS
Delray Beach, FL; January 29, 1999 - Travel Services International,
Inc., dba The Travel Company (NASDAQ:TRVL) announced today that its Board of
Directors adopted a Share Purchase Rights Plan (the "Rights Plan") and, in
connection therewith, declared a dividend distribution of one Common Stock
Purchase Right on each outstanding share of the Company's common stock. The
Board of Directors also adopted various amendments to the Company's Bylaws,
providing for procedures and other provisions in connection with shareholder
proposals, nominations, meetings, actions by written consent and other matters.
Joseph V. Vittoria, Chairman and Chief Executive Officer of The Travel
Company, stated: "The Rights Plan is designed to assure that all of the
Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company, and to guard against coercive or unfair
tactics to gain control of The Travel Company without paying all shareholders a
premium for that control. The Rights are not being adopted in response to any
specific takeover threat, but are a response to the general takeover environment
and volatility in the stock markets."
The Company stated that the Rights Plan is similar to those adopted by
many other public companies. The Rights are intended to enable the Company's
shareholders to realize the long-term value of their investment in the Company.
They will not prevent a takeover, but should encourage anyone seeking to acquire
the Company to negotiate with the Board of Directors prior to attempting a
takeover.
Each Right has an initial exercise price of $175.00 for one share of
the Company's common stock (subject to adjustment). The Rights will be
exercisable only if a person or group acquires 15% or more of the Company's
common stock or announces a tender or exchange offer the consummation of which
would result in ownership by a person or group of 15% or more of the common
stock. Upon any such occurrence, each Right will entitle its holder (other than
such person or group of affiliated or associated persons) to purchase, at the
Right's then-current exercise price, a number of the Company's common shares
having a market value of twice such price. In addition, if the Company is
acquired in a merger or other business combination transaction, or sells 50% or
more of its assets or earning power, after a person or group has acquired 15% or
more of the Company's outstanding shares, each Right will entitle its holder to
purchase, at the Right's then-current exercise price, a number of the acquiring
company's common shares having a market value of twice such price. The acquiring
person (and affiliated and associated persons) will not be entitled to exercise
these Rights.
<PAGE>
Following the acquisition by a person or group of 15% or more of the
Company's common stock and prior to an acquisition of 50% or more of the common
stock, the Board of Directors may exchange the Rights (other than Rights owned
by such person or group) at an exchange ratio of one share of common stock per
Right.
Prior to the acquisition by a person or group of 15% or more of the
Company's common stock, the Rights are redeemable for $.001 per Right at the
option of the Board of Directors. If a redemption is authorized after a change
in a majority of the Board of Directors (resulting from a proxy contest or
consent solicitation), then it must be approved by a majority of "independent
directors" (as defined in the plan) and by a majority vote of the full Board.
The Board of Directors is also authorized to reduce the 15% thresholds referred
to above to not less than 10% under circumstances the Board deems appropriate.
The dividend distribution will be made on or about February 8, 1999,
payable to shareholders of record on January 28, 1999. The Rights will expire on
January 28, 2009. The adoption of the Rights Plan and the distribution of the
Rights is not dilutive, does not affect reported earnings per share, and is not
taxable to shareholders. A copy of the complete Rights Plan will be included
with the appropriate filings with the Securities and Exchange Commission.
Separately, the Company announced that the Board of Directors also
amended and restated the Company's Bylaws to provide for certain procedures and
other provisions in connection with shareholder proposals, nominations,
meetings, actions by written consent and other matters. These include the
addition of procedures that authorize the Chairman of any shareholders' meeting
to adjourn the meeting, and for the Board to have authority to postpone a
shareholders' meeting by public announcement prior to the scheduled meeting
date; specified notice, timing and content requirements for shareholders to
propose business to be conducted at, or to nominate persons for election as
directors at, annual or special meetings of shareholders; procedures for
shareholders to take action without a meeting by written consent; and a
provision authorizing the Board to establish special voting and/or quorum
requirements with respect to authorizations, approvals and/or determinations by
the Board (or by designated directors or subgroups or committees of directors).
These provisions could render more difficult or discourage an attempt to obtain
control of the Company through a proxy contest or consent solicitation.
The Company also announced that it has completed its reincorporation
from Delaware to Florida, effective as of December 31, 1998. This change in the
Company's state of incorporation was approved by shareholders at the 1998 annual
meeting of stockholders. Shareholders will not be required to exchange their
stock certificates in connection with the reincorporation.
The Travel Company is a leading specialized distributor of cruise
vacations, domestic and international airline tickets and European auto rentals,
and a leading provider of electronic hotel reservation services. The Company
provides travel agents and travelers a unique combination of specialized
expertise, the ability to compare options from multiple travel providers and
competitive prices.
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