Item 1. Description of Registrant's Securities To Be
Registered
On Janaury 26, 1995 Ryan's Family Steak Houses, Inc. (the
"Company") declared a dividend distribution of one Common
Stock Purchase Right for each outstanding share of Common
Stock of the Company to stockholders of record at the close
of business on February 10, 1995. Each Right entitles the
registered holder to purchase from the Company one half
share of Common Stock, $1.00 par value per share (the
"Common Stock"), at a cash exercise price of $25 per half
share, subject to adjustment. The description and terms of
the Rights are set forth in a Shareholder Rights Agreement
between the Company and Wachovia Bank of North Carolina,
N.A., as Rights Agent.
Initially, the Rights will not be exercisable, will be
attached to all outstanding shares of Common Stock, and no
separate Right Certificates will be distributed. The Rights
will separate from the Common Stock and a Distribution Date
will occur upon the earliest of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") (other than an
Exempt Person as defined in the Agreement) has acquired
beneficial ownership of 15% or more of the outstanding
shares of Common Stock (the date of said announcement being
referred to as the "Share Acquisition Date") and (ii) 10
business days following the commencement of a tender offer
or exchange offer that would result in a Person or group
owning 15% or more of the outstanding shares of Common
Stock.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), (a) the Rights will be evidenced
by the Common Stock certificates and will be transferred
with and only with such Common Stock certificates, (b) new
Common Stock certificates issued after February 10, 1995
will contain a notation incorporating the Shareholder Rights
Agreement by reference, and (c) the surrender for transfer
of any certificates for Common Stock will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on February
10, 2005 unless previously redeemed by the Company as
described below.
As soon as practicable after the Distribution Date,
Right Certificates will be mailed to holders of record of
Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Right Certificates alone
will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event that (i) a Person acquires beneficial
ownership of 15% or more of the Company's Common Stock, (ii)
the Company is the surviving corporation in a merger with an
Acquiring Person or any Affiliate or Associate and the
Common Stock is not changed or exchanged, (iii) an Acquiring
Person engages in one of a number of self-dealing
transactions specified in the Shareholder Rights Agreement,
or (iv) an event occurs which results in an Acquiring
Person's ownership interest being increased by more than 1%
(e.g., a reverse stock split), proper provision will be made
so that each holder of a Right will thereafter have the
right to receive upon exercise thereof at the then current
exercise price, that number of shares of Common Stock (or in
certain circumstances, cash, property, or other securities
of the Company) having a market value of two times such
exercise price. However, the Rights are not exercisable
following the occurrence of any of the events set forth
above until such time as the Rights are no longer redeemable
as set forth below. Notwithstanding any of the foregoing,
rights that are or were beneficially owned by an Acquiring
Person shall become null and void.
In the event that, at any time following the Share
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction or (ii) 50% or more
of the Company's assets or earning power is sold, each
holder of a Right shall thereafter have the right to
receive, upon exercise, common stock of the acquiring
company having a market value equal to two times the
exercise price of the Right.
At any time after any person becomes an Acquiring
Person and prior to such the time such Person, together with
its Affiliates and Associates, becomes the Beneficial Owner
of 50% or more of the outstanding Common Stock, the Board of
Directors of the Company may exchange the Rights (other than
Rights which have become void), in whole or in part, at the
exchange rate of one share of Common Stock per Right,
subject to adjustment as provided in the Rights Agreement.
The exercise 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 (i) in the event of a stock
dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of
the Common Stock are granted certain rights or warrants to
subscribe for Common Stock or securities convertible into
Common Stock at less than the current market price of the
Common Stock, or (iii) upon the distribution to holders of
the Common Stock of evidence of indebtedness or assets
(excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustment in the exercise
price will be required until cumulative adjustments amount
to at least 1% of the exercise price. No fractional shares
of Common Stock will be issued and, in lieu thereof, an
adjustment, in cash will be made based on the fair market
value of the Common Stock on the last trading date prior to
the date of exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $.001 per Right (payable in cash, Common Stock or
other consideration deemed appropriate by the Board of
Directors) by the Board of Directors at any time prior to
the close of business on the tenth day after the Share
Acquisition Date or the final expiration Date of the Rights
(whichever is earlier); provided that under certain
circumstances, the Rights may not be redeemed unless there
are Disinterested Directors in office and such redemption is
approved by a majority of such Disinterested Directors.
After the redemption period has expired, the Company's right
of redemption may be reinstated upon the approval of the
Board of Directors if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding
shares of Common Stock in transaction or series of
transactions not involving the Company and there are no
other Acquiring Persons. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the
Rights will terminate and thereafter the only right of the
holders of Rights will be to receive the redemption price.
Until a Right is exercised, the holder will have no
rights as a stockholder of the Company (beyond those as an
existing stockholder), including the right to vote or to
receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to the Company,
stockholders may, depending upon
the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or
other consideration) of the Company or for common stock of
an acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement, other than those
relating to the principal economic terms of the Rights, may
be amended by the Board to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interests
of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement. Amendments adjusting
time periods may, under certain circumstances, require the
approval of a majority of Disinterested Directors, or
otherwise be limited.
A copy of the Shareholder Rights Agreement is available
free of charge from the Company. This summary description
of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Shareholder
Rights Agreement.
Item 2. Exhibits
Rights Agreement dated as of January 26, 1995 between
Ryan's Family Steak Houses, Inc. and Wachovia Bank of North
Carolina, N.A., as Rights Agent, which includes, as Exhibit
A, the Form of Rights Certificate; and as Exhibit B, the
Summary of Rights to Purchase Common Stock. Pursuant to the
Rights Agreement, Rights Certificates will not be mailed
until as soon as practicable after the earlier of (i) 10
business days following a "Share Acquisition Date" (as
defined in the Rights Agreement) 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 shall become an Acquiring Person (as defined in the
Rights Agreement)) following the date of (x) the
commencement, by any Person (as defined in the Rights
Agreement), other than an Exempt Person (as defined in the
Rights Agreement), of, or (y) the first public announcement
of the intention of any Person (other than an Exempt Person)
to commence, a tender or exchange offer if, upon
consummation thereof, such Person would be the Beneficial
Owner (as defined in the Rights Agreement) of 15% or more of
the then outstanding shares of Common Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized.
RYAN'S FAMILY STEAK HOUSES,
INC.
Date: February 6, 1995 By: /s/ Charles D. Way
Name: Charles D. Way
Title: Chairman
and CEO
EXHIBIT 1
RYAN'S FAMILY STEAK HOUSES, INC.
and
WACHOVIA BANK OF NORTH CAROLINA,
N.A., as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
JANUARY 26, 1995
Table of Contents
Section
Page
1 Certain Definitions..........................................3
2 Appointment of Rights Agent..................................7
3 Issue of Right Certificates..................................7
4 Form of Right Certificates...................................9
5 Countersignature and Registration...........................10
6 Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates..............................11
7 Exercise of Rights; Exercise Price; Expiration
Date of Rights............................................11
8 Cancellation and Destruction of Right Certificates..........13
9 Reservation and Availability of Common Stock................13
10 Common Stock Record Date....................................15
11 Adjustment of Exercise Price, Number and Kind of
Shares or Number of Rights................................15
12 Certificate of Adjusted Exercise Price or Number
of Shares.................................................24
13 Consolidation, Merger or Sale or Transfer of
Assets or Earning Power...................................24
14 Fractional Rights and Fractional Shares.....................27
15 Rights of Action............................................28
16 Agreement of Right Holders..................................29
17 Right Certificate Holder Not Deemed Shareholder.............29
18 Concerning the Rights Agent.................................30
19 Merger or Consolidation or Change of Name of
Rights Agent..............................................30
20 Duties of Rights Agent......................................31
21 Change of Rights Agent......................................33
22 Issuance of New Right Certificates..........................34
23 Redemption..................................................34
24 Exchange....................................................36
25 Notice of Certain Events....................................37
26 Notices.....................................................38
27 Supplements and Amendments..................................39
28 Successors..................................................39
29 Determinations and Actions by the Board of Directors........39
30 Benefits of this Agreement..................................40
31 Severability................................................40
32 Governing Law...............................................40
33 Counterparts................................................41
34 Descriptive Headings........................................41
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
SHAREHOLDER RIGHTS AGREEMENT
Shareholder Rights Agreement (as the same may from time to time be
amended or supplemented, this "Agreement"), dated as of January 26, 1995,
between Ryan's Family Steak Houses, Inc., a South Carolina corporation
(the "Company"), and Wachovia Bank of North Carolina, N.A., a North
Carolina state-chartered bank (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
W I T N E S S E T H
WHEREAS, on January 26, 1995 the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each whole share of Common Stock, $1.00 par
value per share, of the Company (the "Common Stock") outstanding as of
the Close of Business on February 10, 1995 (the "Record Date") and
authorized the issuance of one Right for each whole share of Common Stock
of the Company which is issued or which becomes outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption
Date and the Final Expiration Date (as such terms are hereinafter
defined), each Right initially representing the right to purchase one
half of a share of Common Stock, upon the terms and conditions set forth
herein (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall on any
date hereafter, be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or any of its Subsidiaries, or (iv) any entity or Person
holding shares of Common Stock for or pursuant to the terms of any such
plan. The Persons described in clauses (i) through (iv) above are
referred to herein as "Exempt Persons". Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Stock by the Company which, by reducing the number
of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person
(together with all Affiliates and Associates of such Person) to 15% or
more of the Common Stock of the Company then outstanding; provided,
however, that if any Person, (together with all Affiliates and Associates
of such Person, (other than Exempt Persons) shall become the Beneficial
Owner of 15% or more of the Common Stock of the Company then outstanding
by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock of the Company, then such Person shall be deemed
to be an "Acquiring Person."
(b) "Adjustment Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this
Agreement; provided, however, that no Exempt Person shall be deemed an
Affiliate or an Associate.
(e) 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 own, directly or indirectly (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement) or has the
right to dispose of;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or after the passage of
time) pursuant to any agreement, arrangement or understanding, upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own" (1) securities tendered pursuant to a tender or exchange offer made
by such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; (2)
securities issuable upon exercise of Rights at any time prior to the
occurrence of an Adjustment Event; or (3) securities issuable upon
exercise of Rights from and after the occurrence of an Adjustment Event,
if such Rights were acquired by such Person or such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section 3(a)
or Section 22 or pursuant to Section 11(a)(i) in connection with an
adjustment made with respect to any of the Rights heretofore specified in
this clause (3); or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or
to "beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy given to such Person or any of such
Person's Affiliates or Associates 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, or
(2) is made in connection with, or is to otherwise participate in, a
proxy or consent solicitation made or to be made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under
the Exchange Act, in the case of either clause (1) or (2) of this proviso
whether or not such agreement, arrangement or understanding is also then
reportable by such person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of Section 1(e)(ii) hereof) or disposing
of any securities of the Company; provided, however, that (1) no Person
engaged in business as an underwriter of securities shall be deemed the
Beneficial Owner of any securities acquired through such Person's
participation as an underwriter or selling group member in good faith in
a firm commitment underwriting until the expiration of 40 days after the
date of such acquisition; (2) no Person who is a director or an officer
of the Company shall be deemed the Beneficial Owner of any securities of
the Company that are beneficially owned by any other director or officer
of the Company solely as a result of his or her position as director or
officer of the Company; (3) any agreement, arrangement or understanding
(whether or not in writing), or any communication or discussion, among
two or more Persons with respect to any matter relating to the
management, operation or conduct of the business of the Company,
including any discussion or agreement on, or any communication with
respect to, a position with respect to any such matter and the disclosure
of such communication, discussion, agreement or position to other Persons
(including shareholders of the Company) or to the Company shall not
constitute an agreement, arrangement or understanding contemplated by
Section 1(e)(ii)(B).
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of South
Carolina or the State of North Carolina are authorized or obligated by
law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M.,
Greenville time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Greenville time, on the next
succeeding Business Day.
(h) "Common Stock" shall mean the Common Stock, $1.00 par value
per share, of the Company, except that "common stock" when used with
reference to any Person other than the Company shall mean the capital
stock (or equity interest) with the greatest voting power of such Person,
or the equity securities or other equity interest having power to control
or direct the management, of such person or, if such Person is a
subsidiary of another Person, the Person which ultimately controls such
first-mentioned Person and which has issued and outstanding such capital
stock, equity securities or equity interests.
(i) "Current Per Share Market Price" shall have the meaning set
forth in Section 11(d).
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(k) "Disinterested Director" shall mean (i) any member of the
Company's Board of Directors who is unaffiliated with an Acquiring
Person, or an Affiliate or Associate of any such Person and was a member
of the Company's Board of Directors prior to the time that an Acquiring
Person became such, and any successor of a Disinterested Director who is
unaffiliated with an Acquiring Person, or any Affiliate or Associate of
any such Person and is recommended to succeed a Disinterested Director by
a majority of the Disinterested Directors then on the Company's Board of
Directors.
(l) "Distribution Date" shall have the meaning defined in
Section 3(a) hereof.
(m) "Equivalent Common Stock" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(o) "Exchange Rate" shall have the meaning set forth in Section
24(a) hereof
(p) "Exercise Price" shall have the meaning set forth in Section
4 hereof.
(q) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Group" shall mean two or more Persons acting as a
partnership, limited partnership, syndicate or other group for the
purpose of acquiring, holding or disposing of the Common Stock.
(s) "Person" shall mean any individual, firm, corporation,
partnership or other entity or Group, and shall include any successor (by
merger or otherwise) thereof; provided, however, that when two or more
Persons act as a partnership, limited partnership, syndicate or other
Group for the purpose of acquiring, holding disposing of the Common
Stock, such partnership, limited partnership, syndicate or other Group
shall be deemed to be a single Person.
(t) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(u) "Record Date" shall have the meaning set forth in the
recital clause of this Agreement.
(v) "Redemption Date" shall have the meaning set forth in
Section 7(a).
(w) "Rights" shall have the meaning set forth in the recital
clause of this Agreement.
(x) "Right Certificate" shall have the meaning set forth in
Section 3(a).
(y) "Section 11(a)(ii) Adjustment Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(z) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A), (B), or (C) hereof.
(aa) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(bb) "Share Acquisition Date" shall mean the first date on which
there shall be a public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(cc) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(dd) "Subsidiary" of any Person shall mean any other corporation
or other entity of which a majority of the voting equity securities or
voting interests is owned, directly or indirectly, by such Person, or
which is otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the meaning set forth in
Section 3(b).
(gg) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-
Rights Agents as it may deem necessary or desirable. In the event the
Company appoints one or more co-Rights Agents, the respective duties of
the Rights Agent and any co-Rights Agents shall be as the Company shall
determine.
Section 3. Issue of Right Certificates
(a) Until the earlier of (i) the Close of Business on the 10th
calendar day after the Share Acquisition Date, (ii) the Close of Business
on the 10th Business Day (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 shall become an Acquiring Person) after the date of (x) the
commencement, by any Person, other than an Exempt Person, of, or (y) the
first public announcement of the intention of any Person (other than an
Exempt Person) to commence, a tender or exchange offer if, upon
consummation thereof, such Person would be an Acquiring Person, including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights (the earliest of such dates being herein referred
to as the "Distribution Date"), the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by certificates for the Common
Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and the Rights will be
transferable only in connection with the transfer of the underlying
shares of Common Stock. The Board of Directors of the Company may defer
the date set forth in clause (ii) in the preceding sentence to a
specified later date or to an unspecified later date to be determined,
with the concurrence of a majority of the Disinterested Directors, by
action of the Directors of the Company. As soon as practicable after the
Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Rights Agent will send, by firstclass, insured,
postage prepaid mail, to each record holder of the Common Stock as of the
Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more certificates, in
substantially the form attached hereto as Exhibit A (the "Right
Certificates"), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided herein. As of and after the
Close of Business on the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or thereafter, the Company will send a
notification of the existence of the Rights, by postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding
as of the Record Date, until the Distribution Date or the earlier of the
Redemption Date or the Final Expiration Date, the Rights will be
evidenced by such certificates for the Common Stock with or without a
copy of the Summary of Rights in the form attached hereto as Exhibit B
(the "Summary of Rights") attached thereto, and the registered holders of
the Common Stock shall also be the registered holders of the associated
Rights. Until the Distribution Date (or earlier redemption, expiration
or termination of the Rights), the transfer of any of the certificates
for the Common Stock outstanding on the Record Date, even without a copy
of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Stock represented by
such certificate.
(c) Certificates for the Common Stock issued after the Record
Date, but prior to the earlier of the Distribution Date, the Redemption
Date or the Final Expiration Date, shall be deemed also to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Shareholder Rights Agreement
between Ryan's Family Steak Houses, Inc. and Wachovia Bank of North
Carolina, N.A., as Rights Agent, dated as of January 26, 1995 (the
"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
offices of Ryan's Family Steak Houses, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. Ryan's Family Steak Houses, Inc. will mail to
the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt
of a written request therefor. Under certain circumstances, Rights
issued to Acquiring Persons or any Affiliates or Associates thereof
(as defined in the Rights Agreement) and any subsequent holder of
such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date or the earlier of the Redemption Date or the Final
Expiration Date, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates alone, and
the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by
such certificates. In the event that the Company purchases or acquires
any shares of Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock 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 which are
no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof)
shall each be substantially in the form of Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any applicable law, rule or regulation or with
any rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates,
whenever distributed, shall be dated as of the Record Date, and on their
face shall entitle the holders thereof to Purchase such number of shares
of Common Stock as shall be set forth therein at the price set forth
therein (the "Exercise Price"), but the number of such shares and the
Exercise Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person or (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 (or of such Affiliate or Associate) to holders of equity
interests in such Acquiring Person (or of such Affiliate or Associate) 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 is part
of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of Section 11 hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in
this sentence, shall contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may become null
and void under certain circumstances as specified in Section 11
of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person or
any Associate or Affiliate thereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or any Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and
delivered by the Company with the same force and effect as though the
Person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificates may be signed on
behalf of the Company by any Person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such Person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at one of its offices designated as the appropriate
place for surrender of Right Certificates upon exercise or transfer,
books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b), Section 11,
Section 14 and Section 24 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 or the Final Expiration Date, any
Right Certificate or Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock (or
following an Adjustment Event, other securities, cash or other assets as
the case may be) as the Right Certificate or Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Certificates to be transferred, split
up, combined or exchanged, with the form of assignment and certificate
duly executed, at
the office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered
Right Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 11 and Section 14 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or Certificates, as the case
may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Final Expiration Date
of Rights.
(a) Subject to Section 11(a)(ii) hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Section 9, Section 11(a)(iii)
and Section 23(a)), in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form
of election to purchase and the certificate set forth on the reverse side
thereof completed and duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Exercise Price for the total number of shares of
Common Stock (or other securities, cash or other assets, as the case may
be) as to which such surrendered Rights are then exercised, at or prior
to the earlier of (i) the Close of Business on February 10, 2005 (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 which such Rights are exchanged as provided in Section 24. Except
as set forth in Section 11(a) hereof and notwithstanding any other
provision of this Agreement, any Person who prior to the Distribution
Date becomes a record holder of shares of Common Stock may exercise all
of the rights of a registered holder of a Right Certificate with respect
to the Rights associated with such shares of Common Stock in accordance
with the provisions of this Agreement, as of the date such Person becomes
a record holder of shares of Common Stock.
(b) The Exercise Price for each half share of Common Stock
pursuant to the exercise of a Right shall initially be $25 (equivalent to
$50 for each share of Common Stock), shall be subject to adjustment from
time to time provided in Section 11 and Section 13 hereof, and shall be
payable in lawful money of the United States of America in accordance
with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate set
forth on the reverse side thereof completed and duly executed,
accompanied by payment of the Exercise Price for the shares (or,
following an Adjustment Event, other securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any applicable
transfer tax (as determined by the Rights Agent) in cash, or by certified
check or bank draft payable
to the order of the Company, the Rights Agent shall, subject to Section
20(k) 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 therefor) certificates for the 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 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
issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depository receipts, cause
the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate. In the event that the Company is obligated to
issue other securities of the Company, pay cash or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Right Certificate surrendered for such exercise,
and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Common Stock (and, following the occurrence of an Adjustment Event, other
securities or out of its authorized and issued shares held in its
treasury)
the number of shares of Common Stock (and, following the occurrence of an
Adjustment Event, other securities) that, as provided in this Agreement
will be sufficient to permit the exercise in full of all outstanding
Rights; provided, that such action need not be taken with respect to
shares of Common Stock (or other securities) issuable upon occurrence of
an Adjustment Event until the occurrence of such event.
(b) If at the time the Rights become exercisable, the then
outstanding shares of Common Stock are listed on any national or regional
securities exchange or are quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or any
successor thereto or other comparable quotation system, the Company shall
use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares of Common Stock (and, following the
occurrence of an Adjustment Event, other securities) reserved for
issuance upon such exercise to be quoted on such system or listed on such
exchange, as the case may be.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event as of which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in accordance
with this Agreement, or as soon as required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect
to the Common Stock or other securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii)
cause such registration statement to remain effective (with a prospectus
that at all times meets the requirements of the Securities Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable
for such securities, and (B) the date of the expiration of the Rights.
The Company will also take such action as may be appropriate under, and
which will ensure compliance with, the securities or blue sky laws of the
various states in connection with the exercisability of the Rights. The
Company may temporarily suspend for a period of time not to exceed ninety
(90) days after the date 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 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 such provision of
this Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be reasonably necessary to ensure that all shares of Common
Stock (and, following the occurrence of an Adjustment Event, other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that, subject to
Section 6, 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 Right Certificates or of any certificates for
shares of Common Stock (or other securities, as the case may be) 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 Right Certificates to a Person other than, or in respect of
the issuance or delivery of securities in a name other than that of, the
registered holder of the Right Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for securities in a
name other than that of the registered holder upon the exercise of any
Rights until such tax
shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for Common Stock is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
shares of Common Stock represented thereby on, and such certificate shall
be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Exercise Price (and any
applicable transfer taxes) was made; provided, however, that if the date
of such surrender and payment is a date upon which the 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 Right evidenced thereby, the holder of a Right Certificate shall not
be entitled to any rights of a shareholder of the Company with respect to
shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind of Shares
or
Number of Rights. The Exercise Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding 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), then, except as otherwise provided in this
Section 11(a), the Exercise 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
Common Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of Common Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock (or other capital stock, as the
case may be) transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; 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 the Company issuable upon the exercise thereof. If an event occurs
which would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, (1) shall merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and the Common Stock
of the Company shall remain outstanding and not changed into or exchanged
for stock or other securities of any other Person or the Company or cash
or any other property, (2) shall, in one or more transactions, transfer
any assets to the Company in
exchange (in whole or in part) for shares of any equity security of the
Company or any of its Subsidiaries or for securities exercisable for or
convertible into shares of any equity security of the Company or any of
its Subsidiaries or otherwise obtain from the Company, with or without
consideration, any additional shares of any equity security of the
Company or securities exercisable for or convertible into shares of any
equity security of the Company or any of its Subsidiaries (other than as
part of a pro rata distribution to all holders of Common Stock), (3)
shall sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise dispose (in one or more transactions), to, from or with, as the
case may be, the Company or any of its Subsidiaries, assets on terms and
conditions less favorable to the Company than the Company would be able
to obtain in arm'slength negotiation with an unaffiliated third Person,
(4) shall engage in any transaction with the Company involving the sale,
purchase, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions), other than
incidental to the lines of business currently engaged in as of the date
hereof by the Company and such Acquiring Person, or Associate or
Affiliate, of assets having an aggregate fair market value of more than
$5,000,000, (5) shall receive any compensation from the Company or any of
the Company's Subsidiaries other than compensation for full time
employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (6) shall receive the
benefit, directly or indirectly (except proportionately as a
shareholder), of any loans other than in the ordinary course of
business), advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantage provided by the Company or any of
its Subsidiaries, or
(B) any Person (other than an Exempt Person), shall become
an Acquiring Person, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock
split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions (whether or not with or into or
otherwise involving an Acquiring Person) which has the effect, directly
or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company
or any of its Subsidiaries which is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring Person,
then, and in each such case, proper provision shall be made so that each
holder of a Right, except as provided in this paragraph (ii), shall
thereafter have a right to receive, upon exercise of such Right at the
then current Exercise Price in accordance with the terms of this
Agreement, such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Exercise
Price by the then number of one half shares of Common Stock for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event and (y) dividing that product (which, following
such first occurrence, shall thereafter be referred to as the "Exercise
Price" for each Right and for all purposes of this Agreement) by 50% of
the Current Per Share Market Price of the Common Stock (determined
pursuant to Section 11(d)) on the date of the occurrence of any one of
the events listed above in this Section 11(a)(ii) (such number of shares
is herein called the "Adjustment Shares"); provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is
also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). The Company shall not enter into any
transaction of the kind listed in this Section 11(a)(ii) 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 substantially
diminish or otherwise eliminate the benefits intended to be afforded by
the Rights.
Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights, or (B) a transfer which
the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 11(a), shall become null and void without any
further action and no holder or beneficial owner of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)
and Section 4(b) hereof are complied with, but shall have no liability to
any holder or beneficial owner of Right Certificates or any other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or any Affiliates and Associates thereof or any
transferee of any of them hereunder.
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's articles of organization 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), the Company shall:
(A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over (2) the
Exercise Price (such excess is herein called the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Exercise Price, (1)
cash, (2) a reduction in the Exercise Price, (3) Common Stock or other
equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which the Board has deemed to have
the same value as shares of Common Stock (such shares or units of shares
of preferred stock are herein called "Equivalent Common Stock")), (4)
debt securities of the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board based upon
the advice of a competent investment banking firm selected by the Board;
provided, however, if the Company shall not have made adequate provision
to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Adjustment Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Exercise Price, shares of
Common Stock (to the extent available) and then, if necessary, cash,
which shares or cash have an aggregate value equal to the Spread. If the
Board shall determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Adjustment Date, in order that the
Company may seek stockholder 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 need
be taken pursuant to the first or second sentence of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii)
hereof, that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the expiration
of the Substitution
Period in order to seek an authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer
in effect. For the purpose of this Section 11(a)(iii), the value of
Adjustment Shares shall be the Current Per Share Market Price of the
Common Stock on the Section 11(a)(ii) Adjustment Date, and the per share
or per unit value of any Equivalent Common Stock shall be deemed to equal
the Current Per Share Market Price of the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of
Common Stock entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Common Stock or
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 Per Share Market Price (as determined pursuant to
Section 11(d) hereof) of the Common Stock on such record date, the
Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
shares of Common Stock 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 or Equivalent Common Stock to be offered
(and the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such Current Per Share 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 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 the Company
issuable upon the exercise thereof. In case such subscription price may
be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be the Current Per Share
Market Price thereof determined in accordance with Section 11(d) hereof.
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 adjustments shall be made successively whenever such a record date
is fixed; and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (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 periodic 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 options, subscription rights or warrants (excluding
those referred to in Section 11(b)), the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Per Share Market Price (as
determined pursuant to Section 11(d) hereof) of Common Stock on such
record date, less the Current Per Share Market Price (as determined
pursuant to Section 11(d) hereof) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such options,
subscription rights or warrants applicable to one share of Common Stock
and the denominator of which shall be the Current Per Share Market Price
(as determined pursuant to Section
11(d) hereof) per one 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 the Company
issuable upon the exercise thereof. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Exercise Price shall again be
adjusted to be the Exercise Price which would be in effect if such record
date had not been fixed.
(d) For the purpose of this Agreement, the "Current Per Share
Market Price" of any share of Common Stock or any other stock or any
Right or other security or any other property shall be determined as
provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other
security (hereinafter in this Section 11(d)(i) a "Security"), the Current
Per Share Market Price on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that for the purpose
of computations made pursuant to Section 11(a)(iii) hereof, the Current
Per Share Market Price on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the ten (10)
consecutive Trading Days immediately following such date; and provided
further, that in the event that the Current Per Share Market Price of any
Security is determined during a period following the announcement by the
issuer of such Security of (x) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into shares of such Security (other than the Rights) or (y) any
subdivision, combination or reclassification of such Security, and prior
to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current
Per Share 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 Securities are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
Security is listed or admitted to trading; or, if not listed or admitted
to trading on any national securities exchange, the last quoted price
(or, if not so quoted, the average of the last quoted high bid and low
asked prices) in the over-the-counter market, as reported by NASDAQ or
such other system then in use; or, if, on any such date no bids for such
Security are quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in such Security selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in such
Security, the Current Per Share Market Price of such Security on such
date shall be determined reasonably and with good faith to the holders of
the Rights by the Board of Directors of the Company, including, if at the
time of such determination there is an Acquiring Person, a majority of
the Disinterested Directors then in office, or if there are no
Disinterested Directors, by a competent investment banking firm selected
by the Board of Directors, which determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which such
Security is listed or admitted to trading is open for the transaction of
business or, if such Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) If a Security is not publicly held or not so listed or
traded, "Current Per Share Market Price" shall mean the fair value per
share of stock or per other unit of such Security, determined reasonably
and with utmost good faith to the holders of the Rights by the Board of
Directors of the Company, including, if at the time of such determination
there is an Acquiring Person, a majority of the Disinterested Directors
then in office, or if there are no Disinterested Directors, by a
competent investment banking firm selected by the Board of Directors,
which determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of
the Rights.
(iii) In the case of property other than securities, the
Current Per Share Market Price thereof shall be determined reasonably and
with utmost good faith to the holders of Rights by the Board of Directors
of the Company, including, if at the time of such determination there is
an Acquiring Person, a majority of the Disinterested Directors then in
office, or if there are no Disinterested Directors, by a competent
investment banking firm selected by the Board of Directors, which
determination shall be described in a statement filed with the Rights
Agent and shall be binding upon the Rights Agent and the holders of the
Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least l% in the Exercise
Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth of a share, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section
shall be made no later than the earlier of (i) three (3) years from the
date of the transaction which mandates such adjustment or (ii) the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Exercise 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 Section 11(a) through (c), (e), (g) through
(k), and (m), inclusive, 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 Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of shares
(or fractions thereof) 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 Exercise Price as
a result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of shares of Common Stock (calculated to the nearest
one tenthousandth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the
Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of any adjustment
of the Exercise Price to adjust the number of Rights, in substitution for
any adjustment in the number of shares of Common Stock 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 ten-thousandth) obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise
Price by the Exercise Price in effect immediately after adjustment of the
Exercise Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Exercise Price
is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Exercise Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Common Stock issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Exercise Price per share and the number of
shares which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below the then 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 fully paid and nonassessable shares of Common Stock at such
adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right exercised
after such record date the number of shares of Common Stock 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 Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of
the event requiring such adjustment.
(m) Notwithstanding anything in this Section 11 to the contrary,
the Company shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision
of the Common Stock, issuance wholly for cash of any shares of Common
Stock at less than
the Current Per Share Market Price, issuance wholly for cash of shares of
Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, stock dividends or issuance of
rights, options or warrants referred to hereinabove 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, (ii) merge with
or into, or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions, assets
or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries taken as a whole, to any other Person
or Persons if (x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments
outstanding or agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale the shareholders of
a Person who constitutes, or would constitute, the "Principal Party" for
the purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that after the Distribution
Date it will not, except as permitted by Section 23 or Section 24 hereof,
take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and
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 each transfer agent for the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, on or after the Share Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company
in a transaction which is not prohibited by 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 is not prohibited by Section 11(o) hereof)
shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the shares of
Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the
Company shall sell, mortgage or otherwise transfer (or one or more of its
Subsidiaries shall sell, mortgage or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which is not prohibited by Section 11(o) hereof)
then, and in each such case, proper provision shall be made so that: (i)
each holder of a Right, except as provided otherwise herein, shall have
the right to receive, upon the exercise thereof at the then current
Exercise Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid and nonassessable
shares of freely tradeable Common Stock of the Principal Party (as
hereinafter defined in Section 13(b)), free and clear of rights of call
or first refusal, liens, encumbrances or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current
Exercise Price by the number of one half shares of Common Stock for which
a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of one
half shares of Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the
Exercise Price in effect immediately prior to such first occurrence) and
dividing that product (which, following the first occurrence of a Section
13 Event, shall be referred to as the "Exercise Price" for each Right and
for all purposes of this Agreement) by (2) 50% of the Current Per Share
Market Price (determined pursuant to Section 11(d) hereof) of the Common
Stock of such Principal Party on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock to permit exercise of all
outstanding Rights in accordance with this Section 13(a)) in connection
with such consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights. The Company shall not enter into any transaction
of the kind set forth in this subsection if at the time of the
consummation of such transaction there are any options, warrants, rights,
conversion or exchange provisions or securities outstanding or any
agreements or arrangements in effect which, as a result of the
consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. If, in the
case of a transaction of the kind described in clause (z) of the first
sentence of this subsection, the Person or Persons to whom assets or
earning power are sold or otherwise transferred are individuals, then the
preceding sentences of this subsection shall be inapplicable, and the
Company shall require as a condition to such sale or transfer that such
Person or Persons pay to each holder of a Rights Certificate, upon its
surrender to the Rights Agent and in exchange therefor (without requiring
payment by such holder), cash in the amount determined by multiplying the
then current Exercise Price by the number of one half shares of Common
Stock for which a Right is then exercisable.
(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 the 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, (x) if the Common Stock of such
Person is not at such time and has not been continuously over the
preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall
refer to such other Person; and (y) in case such Person is a Subsidiary,
directly or indirectly, or 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 of shares outstanding.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto (x) the Principal Party
shall have a sufficient number of authorized shares of its Common Stock
which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13, and
(y) the Company and each Principal Party and each other Person who may
become a Principal Party as a result of such consolidation, merger, sale
or transfer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section 13(a)
and (b) and further providing that, as soon as practicable after the date
of any consolidation, merger, sale or transfer of assets mentioned in
Section 13(a), the Principal Party at its own expense will
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus that at all
times meets the requirements of the Securities Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility requirements
for quotation on NASDAQ; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all material 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. If any 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).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there may be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the 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 per Right for the Trading Day immediately
prior
to such date on which fractional Rights would have been otherwise
issuable. The closing price for any Trading Day shall be the last sale
price, regular way, or, in case no such sale takes place on such Trading
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 not listed or admitted to trading on any
national securities exchange, the last quoted price (or, if not so
quoted, the average of the last quoted high bid and low asked prices) in
the over-thecounter market, as reported by NASDAQ or such other system
then in use; or, if, on any such Trading Day no bids for the Rights are
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Rights the current market
value of the Rights on such Trading Day shall be determined reasonably
and with utmost good faith to the holders of the Rights 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.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise 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 Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value per share of Common Stock. For purposes of
this Section 14(b), the current market value per share of Common Stock
shall be the closing price per share of Common Stock determined pursuant
to Section 11(d) hereof for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and prior to the Distribution Date,
the registered holders of the Common Stock); and any registered holder of
any Right 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 Right 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 Right evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement. Holders
of Rights shall be entitled to recover the reasonable costs and expenses,
including attorneys' fees, incurred by them in any action to enforce the
provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and with the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be
transferable only simultaneously and together with the transfer of shares
of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or offices of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer;
(c) subject to Sections 6 and 11, the Company and the Rights
Agent may deem and treat the person in whose name a Right Certificate
(or, prior to the Distribution Date, the associated 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 Right 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
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as the result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such
obligations; provided, however, that the Company must use its reasonable
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares
of Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed
to confer upon the holder of any Right Certificate, as such, any of the
rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders
(except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent 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 Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against any loss,
liability, or expense, incurred without negligence, recklessness, bad
faith or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance
upon any Right Certificate or certificate for Common Stock or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to
be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or in reliance upon the advice of counsel
as set forth in Section 20.
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 or shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by
it (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of Current Per Share 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 any duly
authorized officer of the Company and delivered to the Rights Agent; and
such certificate shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, recklessness, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in
the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or
in any Right Certificate; nor shall it be responsible for any change in
the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a) hereof) or any adjustment required under the
provisions of Sections 3, 11, 13, 23 or 24 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates
after receipt of a certificate describing any such adjustment furnished
in accordance with Section 12 hereof), nor shall it be responsible for
any determination by the Board of Directors of the Company of current
market value of the Rights or Common Stock pursuant to the provisions of
Section 14 hereof; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Common Stock will, when
so issued, be validly authorized and issued, fully paid and
nonassessable; nor shall it be under any obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more of the registered
holders of the Rights Certificates shall furnish the Rights Agent with
security and indemnity to its satisfaction for any costs and expenses
which may be incurred; nor shall it be liable for any failure to perform
any duties except as specifically set forth herein and no implied
covenants or obligations shall be read into this Agreement against the
Rights Agent, whose duties and obligations shall be determined solely by
the express provisions hereof.
(f) The Company agrees that it will inform the Rights Agent
promptly upon the Company's determination that a Person has become an
Acquiring Person, and the Rights Agent will not be responsible for making
such determination prior to such notice by the Company. The Company
agrees that it will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any duly
authorized officer of the Company, and is authorized to apply to any such
officer 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. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with
a proposal included in such application on or after the date specified in
such application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to
an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying
the action
to be taken or omitted.
(h) 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 the Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers vested in it or perform any of its duties hereunder either
directly 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 attorney or agent or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided the
Rights Agent exercised reasonable care in the selection or continued
employment of such agent.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause (1) or clause (2) thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Right Certificates by first-
class mail. The Company may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Right 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 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent
Rights Agent or the registered holder of any Right Certificate may apply
to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of the State of
North Carolina or the State of South Carolina (or of any other state of
the United States so long as such corporation is authorized to do
business as a banking institution in the State of North Carolina or the
State of South Carolina), in good standing, which is authorized under
such laws to exercise shareholder services or 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 or (b) an Affiliate of a
corporation described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice
thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock
and mail a notice thereof in writing to the registered holders of the
Right 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 Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price and the number or
kind or class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock 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
hereafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the Company,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no
such Right Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or
the person to whom such Right Certificate would be issued, and (ii) no
such Right Certificate shall be issued if, and to the extent that,
appropriate adjustments shall otherwise have been made in lieu of the
issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the Close of Business on the tenth day
following the Share Acquisition Date (or, if the Share Acquisition Date
shall have occurred prior to the Record Date, the Close of Business on
the tenth day following the Record Date), or (y) the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at
a redemption price of $.001 per Right, as such amount may be
appropriately adjusted, as determined by the Board of Directors, to
reflect any transaction of the kind described in clauses (A) through (D)
of Section 11(a)(i) occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"); provided,
however, that if the Board of Directors of the Company shall authorize
the redemption of the Rights in the circumstances set forth in clause (i)
or (ii) below, then there must be Disinterested Directors in office and
such authorization shall require the concurrence of a majority of such
Disinterested Directors: (i) such authorization occurs on or after the
date a Person becomes an Acquiring Person or (ii) such authorization
occurs on or after the date of a change (resulting from one or more proxy
or consent solicitations) in a majority of the directors 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 an Adjustment Event. In considering whether to
redeem the Rights, the Board of Directors of the Company may consider the
best long-term and short-term interests of the Company, including,
without limitation, the effects of the redemption of the Rights upon
employees, suppliers and customers of the Company or any Subsidiary of
the Company and communities in which offices or other establishments of
the Company or any Subsidiary of the Company are located and all other
pertinent factors. The redemption of the Rights by the Board of
Directors may be effective at such time, on such basis and
with such conditions as such Board of Directors in its sole discretion
may establish. In addition to the right of redemption reserved in the
first sentence of this subsection (a), if there are Disinterested
Directors then in office, such Board of Directors may redeem, with the
concurrence of a majority of such Disinterested Directors, all, but not
less than all, of the then outstanding Rights at the Redemption Price
after the occurrence of a Share Acquisition Date, but prior to the
occurrence of any transaction of the kind described in Section
11(a)(ii)(A) or (C) or Section 13(a), if either (i) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number
of shares of Common Stock in one transaction or series of transactions,
not directly or indirectly involving the Company or any of its
Subsidiaries and which did not result in the occurrence of any
transaction of the kind described in Section 11(a)(ii)(A) or (C) or
Section 13(a), as shall result in such Person thereafter being a
Beneficial Owner of 10% or less of the outstanding shares of Common Stock
of the Company, and after such transfer or other disposition there are no
other Acquiring Persons, or (ii) in connection with any transaction of
the kind described in Section 11(a)(ii)(A) or Section 13(a) in which all
holders of the Common Stock of the Company are treated the same and which
shall not involve an Acquiring Person, an Affiliate or Associate of an
Acquiring Person, any other Person in which such Acquiring Person,
Affiliate or Associate has any interest or any other Person acting,
directly or indirectly, on behalf of or in association with such
Acquiring Person, Affiliate or Associate. Notwithstanding any other
provision of this Agreement, the Rights shall not be exercisable after
the first occurrence of an event specified in Section 11(a)(ii) until
such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price 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 the Rights Agent and to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. 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 of value any Rights at any time in any manner other than that
specifically set forth in this Section 23, or in connection with the
purchase, acquisition or redemption of shares of Common Stock prior to
the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the Current Per Share Market Price
of the Common Stock as of the time of redemption) or any other form of
consideration deemed appropriate by the Board.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person shall have become an Acquiring Person,
exchange all or any part of the then outstanding and exercisable Rights
(which shall not include Rights which have become void pursuant to the
provisions of Section 11(a)(ii)) for Common Stock of the Company at an
exchange rate of one share of Common Stock per Right, appropriately
adjusted to reflect any transaction specified in clauses (A) through (D),
inclusive, of Section 11(a)(i) occurring after the date hereof (such
exchange rate being hereinafter called the "Exchange Rate"); provided,
however, that the Board of Directors shall not be empowered to effect
such an exchange at any time after any Person (other than an Exempt
Person), together with all
Affiliates and Associates of such Person, shall have become the
Beneficial Owner of 50% or more of the Common Stock of the Company then
outstanding.
(b) Immediately after any action by the Board of Directors of the
Company directing the exchange of any Rights pursuant to subsection (a)
of this Section 24, notice of which shall be filed with the Rights Agent,
and without any further action and without any notice, the right to
exercise such Rights shall terminate and each registered holder of such
Rights shall thereafter be entitled to receive only the number of shares
of Common Stock which shall equal the number of Rights held by such
registered holder multiplied by the Exchange Rate. The Company shall
give prompt public notice of any exchange directed pursuant to such
subsection (a); provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such
exchange. Within 10 days after action by such Board of Directors
directing the exchange of such Rights, the Company shall mail a notice of
exchange to all registered holders of such Rights at their last addresses
appearing 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. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not received by the registered holder
to whom sent; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of any such exchange.
Each such notice shall state the method by which the exchange of 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 among the registered holders of the
Rights based upon the number of Rights held (excluding Rights which have
become void pursuant to the provisions of Section 11(a)(ii)); and in such
case, a new Rights Certificate evidencing the Rights not being exchanged
shall be prepared and executed by the Company and countersigned and
delivered by the Rights Agent to the registered holder of such Rights
subject to the provisions of Section 14.
(c) In the event that there shall be an insufficient number of
shares of Common Stock authorized but unissued or issued and held in the
treasury of the Company to permit an exchange of Rights directed by the
Board of Directors of the Company, the Company shall take all such action
as may be necessary to authorize additional shares of Common Stock for
issuance upon such exchange of the Rights. In any such exchange, the
Company may, at its option, substitute Equivalent Common Stock for some
or all of the Common Stock otherwise exchangeable for the Rights.
(d) The Company shall not be required to issue fractional
shares of Common Stock in exchange for Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu
of fractional shares of Common Stock, the Company shall pay to the
registered holders of the Rights with respect to which such fractional
Common Stock would otherwise be issuable an amount in cash equal to the
same fraction of the Current Per Share Market Value of Common Stock (as
determined as provided in Section 11(d)) for the Trading Day immediately
prior to the date of such exchange.
Section 25. Notice of Certain Events
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class
to the holders of Common Stock or to make any other distribution to the
holders of Common Stock (other than a regular periodic 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, or to effect any
sale, non-ordinary course mortgage or other transfer (or to permit one or
more of its Subsidiaries to effect any sale, non-ordinary course mortgage
or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other person
(other than a Subsidiary of the Company in one or more transactions each
of which is not prohibited by 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 Right Certificate, in
accordance with Section 26 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 ten (10) 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 ten (10) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares
of Common Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give
to each registered holder of a Right Certificate, in accordance with
Section 26 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.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Ryan's Family Steak Houses, Inc.
405 Lancaster Avenue
Greer, South Carolina 29652
Attn: Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on
the Rights Agent shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as
follows:
Wachovia Bank of North Carolina, N.A.
301 North Church Street
Winston-Salem, North Carolina 27101
Attn: Rights Agent Ryan's Family Steak Houses, Inc.
Notices or demands authorized by this Agreement to be given or made by
the company or the Rights Agent to the holder of any Right Certificate
(or, prior to the Distribution Date, to the holder of any certificate
representing shares of Common Stock) shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution
Date, the Company and the Rights Agent shall, if so directed by the
Company, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing Common Stock. From
and after the Distribution Date, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without the
approval of any holder of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change
or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable and which shall not adversely affect, as
determined solely by the Company, the interests of the holders of the
Rights or the Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, however, that
this Agreement may not be supplemented or amended pursuant to clause
(iii) of this sentence (A) to lengthen any time period unless (1)
approved by a majority of the Disinterested Directors then in office and
(2) such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, registered holders of
the Rights, or (B) to lengthen any time period relating to when the
Rights may be redeemed if at such time the Rights are not then
redeemable. Upon the delivery of such certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or
amendment shall be made on or after the Distribution Date which changes
the Redemption Price, the Final Expiration Date, the Exercise Price or
the number of shares (or portions thereof) of Common Stock for which a
Right is exercisable. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of
the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, 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 as in effect on
the date hereof. The Board of Directors of the Company (with, where
specifically provided for herein, the approval of a majority of the
Disinterested Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for
herein, the approval of a majority of the Disinterested Directors) or to
the Company, or as may be necessary or advisable in the administration of
this Agreement, including without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors (or, where specifically provided for
herein, by a majority of the Disinterested Directors) in good faith shall
(x) be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties, and (y) not subject any
member of the Board of Directors or any of the Disinterested Directors to
any liability to the holders of the Rights or to any other person.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, 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 registered holders of
the Right Certificates (and, prior to the Distribution Date, registered
holders of
the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors
of the Company (including, if at the time of such determination, there is
an Acquiring Person, a majority of the Disinterested Directors then in
office) determines in its good faith judgment that severing the invalid
language from the Agreement would adversely affect the purpose or effect
of the Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on
the tenth day following the date of such determination by the Board of
Directors.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of South Carolina and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and to be performed entirely within
South Carolina.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
ATTEST: RYAN'S FAMILY STEAK HOUSES, INC.
By: By:
Secretary President
ATTEST: WACHOVIA BANK OF NORTH CAROLINA, N.A.
By:________________________ By:_____________________________
Assistant Secretary Vice President
Exhibit A
[Form of Right Certificate]
Certificate No. R-______________ __________ Rights
NOT EXERCISABLE AFTER FEBRUARY 10, 2005 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE
COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.] [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID
UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN SECTION 11(a) OF THE RIGHTS
AGREEMENT.]
RIGHT CERTIFICATE
RYAN'S FAMILY STEAK HOUSES, INC.
This certifies that ________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Shareholder Rights Agreement dated as of January 26,
1995 (the "Rights Agreement") between Ryan's Family Steak Houses, Inc.
(the "Company"), and Wachovia Bank of North Carolina, N.A. (the "Rights
Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to the
Close of Business on February 10, 2005, at the office or offices of the
Rights Agent designated for such purpose, or its successors as Rights
Agent, one half of a fully paid and nonassessable share of common stock,
$1.00 par value per share (the "Common Stock"), of the Company, at an
exercise price of $25 per half share (the "Exercise Price") equivalent to
$50 for each share), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and the related
Certificate duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above and the Exercise Price per share set forth above,
are the number and Exercise Price as of _________________, based on the
Common Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Affiliate or Associate, or (iii) under certain circumstances specified in
the Rights Agreement, a transferee of a Person who, after such transfer,
became an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, such Right shall become null and void and no holder hereof shall
have any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and the
number of shares of Common Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension
of the exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the principal offices of the Company and the Rights Agent and are also
available upon written request to the Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or offices of the Rights Agent designated for
such
purpose, may be exchanged for another Right Certificate or Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Common Stock as the Rights evidenced by
the Right Certificate or Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Board of Directors of
the Company at its option at a redemption price of $.001 per Right
(payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors), or may be exchanged, in whole or in part, for
Common Stock.
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 Agreement.
No holder, as such, of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
shares of Common Stock or any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ____________, 19___.
ATTEST: Ryan's Family Steak Houses, Inc.
By:________________________ By:________________________
Secretary President
Countersigned:
WACHOVIA BANK OF NORTH CAROLINA, N.A.
as Rights Agent
_____________________________
Title
[Form of Reverse Side of Right
Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________ hereby sells, assigns
and transfers unto
______________________________________________________ (please print
name and address of transferee) this Right Certificate, together with
all right, title and interest therein, and does hereby
irrevocably constitute and appoint ________________________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________________ 19___ ______________________________
Signature
Signature Guaranteed:____________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate __ are __ are not
being transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned __ did __ did not directly or indirectly acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: ____________, 19___ ______________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by the Right
Certificate.)
To: Ryan's Family Steak Houses, Inc.:
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase the shares of
Common Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable
upon the exercise of the Rights) and requests that certificates for such
shares be issued in the name of:
_________________________________________________________________________
_
(Please 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 Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
_________________________________________________________________________
_
(Please print name and address)
______________________________
(Please insert social security
or other identifying number)
Dated: ____________, 19___
__________________________________
__ Signature
Signature Guaranteed:______________________
Exhibit B
RYAN'S FAMILY STEAK HOUSES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON
STOCK
On January 26, 1995, the Board of Directors of Ryan's Family Steak
Houses, Inc. (the "Company") declared a dividend distribution of one
Common Stock Purchase Right for each outstanding share of Common Stock of
the Company to stockholders of record at the close of business on February
10, 1995. Each Right entitles the registered holder to purchase from the
Company one half share of Common Stock, $1.00 par value per share (the
"Common Stock"), at a cash exercise price of $25 per half share, subject
to adjustment. The description and terms of the Rights are set forth in a
Shareholder Rights Agreement between the Company and Wachovia Bank of
North Carolina, N.A., as Rights Agent.
Initially, the Rights will not be exercisable, will be attached to
all outstanding shares of Common Stock, and no separate Right Certificates
will be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earliest of (i) 10 days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") (other than an Exempt Person as defined in
the Agreement) has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the date of said announcement being
referred to as the "Share Acquisition Date") and (ii) 10 business days
following the commencement of a tender offer or exchange offer that would
result in a Person or group owning 15% or more of the outstanding shares
of Common Stock.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), (a) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (b) new Common Stock certificates issued after February 10,
1995 will contain a notation incorporating the Shareholder Rights
Agreement by reference, and (c) the surrender for transfer of any
certificates for Common Stock will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on February 10, 2005 unless previously
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Right
Certificates will be mailed to holders of record of Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate
Right Certificates alone will represent the Rights. Except as otherwise
determined by the Board of Directors, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event that (i) a Person acquires beneficial ownership of 15%
or more of the Company's Common Stock, (ii) the Company is the surviving
corporation in a merger with an Acquiring Person or any Affiliate or
Associate and the Common Stock is not changed or exchanged, (iii) an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Shareholder Rights Agreement, or (iv) an event occurs
which results in an Acquiring Person's ownership interest being increased
by more than 1% (e.g., a reverse stock split), proper provision will be
made so that each holder of a Right will thereafter have the right to
receive upon exercise thereof at the then current exercise price, that
number of shares of Common Stock (or in certain circumstances, cash,
property, or other securities of the Company) having a market value of two
times such exercise price. However, the Rights are not exercisable
following the occurrence of any of the events set forth above until such
time as the Rights are no longer redeemable as set forth below.
Notwithstanding any of the foregoing, rights that are or were beneficially
owned by an Acquiring Person shall become null and void.
In the event that, at any time following the Share Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction or (ii) 50% or more of the Company's assets or earning power
is sold, each holder of a Right shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a
market value equal to two times the exercise price of the Right.
At any time after any person becomes an Acquiring Person and prior to
such the time such Person, together with its Affiliates and Associates,
becomes the Beneficial Owner of 50% or more of the outstanding Common
Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights which have become void), in whole or in part, at the
exchange rate of one share of Common Stock per Right, subject to
adjustment as provided in the Rights Agreement.
The exercise 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 (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) if holders of the Common Stock
are granted certain rights or warrants to subscribe for Common Stock or
securities convertible into Common Stock at less than the current market
price of the Common Stock, or (iii) upon the distribution to holders of
the Common Stock of evidence of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the exercise price will be
required until cumulative adjustments amount to at least 1% of the
exercise price. No fractional shares of Common Stock will be issued and,
in lieu thereof, an adjustment, in cash will be made based on the fair
market value of the Common Stock on the last trading date prior to the
date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of
$.001 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors) by the Board of Directors at
any time prior to the close of business on the tenth day after the Share
Acquisition Date or the final expiration Date of the Rights (whichever is
earlier); provided that under certain circumstances, the Rights may not be
redeemed unless there are Disinterested Directors in office and such
redemption is approved by a majority of such Disinterested Directors.
After the redemption period has expired, the Company's right of redemption
may be reinstated upon the approval of the Board of Directors if an
Acquiring Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in transaction or series of
transactions not involving the Company and there are no other Acquiring
Persons. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and thereafter the
only right of the holders of Rights will be to receive the redemption
price.
Until a Right is exercised, the holder will have no rights as a
stockholder of the Company (beyond those as an existing stockholder),
including the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of an
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement, other than
those relating to the principal economic terms of the Rights, may be
amended by the Board to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of holders of
Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement. Amendments adjusting time
periods may, under certain circumstances, require the approval of a
majority of Disinterested Directors, or otherwise be limited.
A copy of the Shareholder Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to
the Shareholder Rights Agreement.
