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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
December 19, 2000
between
FIRST UNION CORPORATION
and
FIRST UNION NATIONAL BANK,
as Rights Agent
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Table of Contents
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Article I
DEFINITIONS
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1.1 Definitions.....................................................................................1
Article II
THE RIGHTS
2.1 Summary of Rights...............................................................................7
2.2 Legend on Common Stock Certificates.............................................................7
2.3 Exercise of Rights; Separation of Rights........................................................8
2.4 Adjustments to Exercise Price; Number of Rights................................................10
2.5 Date on Which Exercise is Effective............................................................11
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates..........................11
2.7 Registration, Registration of Transfer and Exchange............................................11
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates......................................12
2.9 Persons Deemed Owners..........................................................................13
2.10 Delivery and Cancellation of Certificates......................................................13
2.11 Agreement of Rights Holders....................................................................13
Article III
ADJUSTMENTS TO THE RIGHTS FOR CERTAIN TRANSACTIONS
3.1 Flip-in........................................................................................14
3.2 Flip-over......................................................................................16
Article IV
THE RIGHTS AGENT
4.1 General........................................................................................17
4.2 Merger or Consolidation or Change of Name of Rights Agent......................................17
4.3 Duties of Rights Agent.........................................................................18
4.4 Change of Rights Agent.........................................................................19
Article V
MISCELLANEOUS
5.1 Termination....................................................................................20
5.2 Expiration.....................................................................................21
5.3 Issuance of New Rights Certificates............................................................21
5.4 Supplements and Amendments.....................................................................21
5.5 Fractional Shares..............................................................................21
5.6 Rights of Action...............................................................................22
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5.7 Holder of Rights Not Deemed a Shareholder......................................................22
5.8 Notice of Proposed Actions.....................................................................22
5.9 Notices........................................................................................22
5.10 Suspension of Exercisability...................................................................23
5.11 Costs of Enforcement...........................................................................24
5.12 Successors.....................................................................................24
5.13 Benefits of this Agreement.....................................................................24
5.14 Determination and Actions by the Board of Directors, etc.......................................24
5.15 Descriptive Headings...........................................................................24
5.16 GOVERNING LAW..................................................................................24
5.17 Counterparts...................................................................................24
5.18 Severability...................................................................................25
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EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit B Form of Articles of Amendment and Terms
with respect to Participating Class A Preferred Stock
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT, dated as of December
19, 2000 (as amended from time to time, this "Agreement"), between First Union
Corporation, a North Carolina corporation (the "Company"), and First Union
National Bank, as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the close of
business on December 28, 2000 (the "Record Time") payable in respect of each
such share upon certification by the New York Stock Exchange, Inc. to the
Securities and Exchange Commission that the Rights have been approved for
listing and registration (the "Payment Time") and (b) as provided in Section
2.4, authorized the issuance of one Right in respect of each share of Common
Stock issued after the Record Time and prior to the Separation Time (as
hereinafter defined) and, to the extent provided in Section 5.3, each share of
Common Stock issued after the Separation Time; and
WHEREAS, subject to the terms and conditions hereof, each
Right entitles the holder thereof, after the Separation Time, to purchase
securities or assets of the Company (or, in certain cases, securities of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW, THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms have
the meanings indicated:
"Acquiring Person" shall mean any Person who is or becomes the
Beneficial Owner of 10% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not include any Person
(i) who becomes the Beneficial Owner of 10% or more of the outstanding shares of
Common Stock solely as a result of an acquisition by the Company of shares of
Common Stock, until such time thereafter as such Person shall become the
Beneficial Owner (other than by means of a stock dividend or stock split) of any
additional shares of Common Stock while such Person is or as a result of which
such Person becomes the Beneficial Owner of 10% or
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more of the outstanding shares of Common Stock, (ii) who becomes the Beneficial
Owner of 10% or more of the outstanding shares of Common Stock but who acquired
Beneficial Ownership of shares of Common Stock without any plan or intention to
seek or affect control of the Company, if such Person promptly divests, or
promptly enters into an agreement with, and satisfactory to, the Company, in its
sole discretion, to divest, (without exercising or retaining any power,
including voting power, with respect to such shares), sufficient shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial Owner of 10%
or more of the outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares of Common
Stock Beneficially Owned pursuant to the grant or exercise of an option granted
to such Person (an "Option Holder") by the Company in connection with an
agreement to merge with, consolidate or engage in a statutory share exchange
(including by way of a triangular merger or similar structure), or acquire, the
Company entered into prior to a Flip-in Date, (B) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common Stock)
Beneficially Owned by such Option Holder or its Affiliates or Associates at the
time of grant of such option, (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Option Holder after the time of such grant
which, in the aggregate, amount to less than 1% of the outstanding shares of
Common Stock and (D) shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) which are held by such Person
in trust accounts, managed accounts and the like or otherwise held in a
fiduciary capacity, that are Beneficially Owned by third persons who are not
Affiliates or Associates of such Person or acting together with such Person to
hold such shares, or which are acquired by such Person in satisfaction of a debt
previously contracted in good faith. In addition, the Company, any Subsidiary of
the Company and any employee stock ownership or other employee benefit plan of
the Company or a Subsidiary of the Company (or any entity or trustee holding
shares of Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company) shall not be an
Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in
effect on the date of this Agreement.
"Agreement" shall have the meaning set forth in the Preamble.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding (other than
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customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or 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", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy or consent given in
response to a public proxy or consent solicitation made to more than ten holders
of shares of a class of stock of the Company registered under Section 12 of the
Exchange Act and pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, except if such power (or the arrangements
relating thereto) is then reportable under Item 6 of Schedule 13D under the
Exchange Act (or any similar provision of a comparable or successor report). For
purposes of this Agreement, in determining the percentage of the outstanding
shares of Common Stock with respect to which a Person is the Beneficial Owner,
all shares as to which such Person is deemed the Beneficial Owner shall be
deemed outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in Charlotte, North Carolina are
generally authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m.
Charlotte, North Carolina time on such date or, if such date is not a Business
Day, 5:00 p.m. Charlotte, North Carolina time on the next succeeding Business
Day.
"Common Stock" shall mean the shares of Common Stock, par
value $3.33 1/3 per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
"Election to Exercise" shall have the meaning set forth in
Section 2.3(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) hereof.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $105.00.
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"Expansion Factor" shall have the meaning set forth in Section
2.4(a) hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Termination Time, (iii) the Close of Business on the tenth
anniversary of the date of this Agreement, unless, for purposes of this clause
(iii), extended by action of the Board of Directors (in which case the
applicable time shall be the time at which it has been so extended) and (iv)
immediately prior to the effective time of a consolidation, merger or statutory
share exchange that does not constitute a Flip-over Transaction or Event.
"Flip-in Date" shall mean the tenth business day after any
Stock Acquisition Date or such earlier or later date and time as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Flip-in Date that would otherwise have occurred.
"Flip-over Entity" shall mean (i) in the case of a Flip-over
Transaction or Event described in clause (i) of the definition thereof, the
Person issuing any securities into which shares of Common Stock are being
converted or exchanged and, if no such securities are being issued, the other
Person to such Flip-over Transaction or Event and (ii) in the case of a
Flip-over Transaction or Event referred to in clause (ii) of the definition
thereof, the Person receiving the greatest portion of the (A) assets or (B)
operating income or cash flow being transferred in such Flip-over Transaction or
Event, provided in all cases if such Person is a Subsidiary of another Person,
the ultimate parent entity shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for the direction of the
business and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions, on or after a Flip-in Date, in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a
statutory share exchange (including by way of a triangular merger or similar
structure) with any other Person if, at the time of consummation of the
consolidation, merger or statutory share exchange or at the time the Company
enters into any agreement with respect to any such consolidation, merger or
statutory share exchange, the Acquiring Person is (x) the Beneficial Owner of a
number of shares of Common Stock sufficient to accomplish a merger under Section
55-11-04 of the North Carolina Business Corporation Act or (y) or controls the
Board of Directors of the Company and either (A) any term of or arrangement
concerning the treatment of shares of capital stock in such consolidation,
merger or statutory share exchange relating to the Acquiring Person is not
identical to the terms and arrangements relating to other holders of the Common
Stock or (B) the Person with whom the transaction or series of transactions
occurs is the Acquiring Person or an Affiliate or Associate of the Acquiring
Person or (ii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more
than 50% of the assets (measured by either book value or fair market value) or
(B) generating more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as
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a whole) to any Person (other than the Company or one or more of its wholly
owned Subsidiaries) or to two or more such Persons which are Affiliates or
Associates or otherwise acting in concert, if, at the time of the entry by the
Company (or any such Subsidiary) into an agreement with respect to such sale or
transfer of assets, the Acquiring Person or any of its Affiliates or Associates
controls the Board of Directors of the Company. For purposes of the foregoing
description, the term "Acquiring Person" shall include any Acquiring Person and
its Affiliates and Associates, counted together as a single Person. An Acquiring
Person shall be deemed to control the Company's Board of Directors when, on or
following a Stock Acquisition Date, the persons who were directors of the
Company (or persons nominated and/or appointed as directors by vote of a
majority of such persons) before the Stock Acquisition Date shall cease to
constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 90 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
however, that if any event described in Section 2.4 hereof, or any analogous
event, shall have caused the closing prices used to determine the Market Price
on any Trading Days during such period of 90 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, 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, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the securities are not listed or admitted to trading on any
national securities exchange or 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 securities selected by the Board of Directors of the
Company; provided, however, that if on any such date the securities are not
listed or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on such
date shall mean the fair value per share of securities on such date as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm, and set forth
in a certificate delivered to the Rights Agent.
"Option Holder" shall have the meaning set forth in the
definition of Acquiring Person.
"Payment Time" shall have the meaning set forth in the
Recitals.
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"Person" shall mean any individual, firm, partnership, limited
liability company, association, group (as such term is used in Rule 13d-5 under
the Exchange Act, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Preferred Stock" shall mean the series of Participating Class
A Preferred Stock, no-par value, of the Company created by Articles of Amendment
and Terms in substantially the form set forth in Exhibit B hereto appropriately
completed.
"Record Time" shall have the meaning set forth in the
Recitals.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the
Preamble.
"Rights Certificate" shall have the meaning set forth in
Section 2.3(c) hereof.
"Rights Register" shall have the meaning set forth in Section
2.7(a) hereof.
"Separation Time" shall mean the earlier of (i) the Close of
Business on the tenth Business Day (or such later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to the
Separation Time that would otherwise have occurred) after the date on which any
Person commences a tender or exchange offer which, if consummated, would result
in such Person's becoming an Acquiring Person and (ii) the time of the first
event causing a Flip-in Date to occur; provided, that if the foregoing results
in the Separation Time being prior to the Record Time, the Separation Time shall
be the Record Time and provided further, that if any tender or exchange offer
referred to in clause (i) of this paragraph is cancelled, terminated or
otherwise withdrawn prior to the Separation Time without the purchase of any
shares of Common Stock pursuant thereto, such offer shall be deemed, for
purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the earlier of (i) the
first date on which there shall be a public announcement by the Company (by any
means) that a Person has become an Acquiring Person or (ii) the date and time on
which any Acquiring Person becomes the Beneficial Owner of more than 25% of the
outstanding shares of Common Stock.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity or membership interest is
Beneficially Owned, directly or indirectly, by such Person.
"Termination Time" means the time when the Rights are to
terminate pursuant to Section 5.1.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if
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such securities are not listed or admitted to trading on the New York Stock
Exchange, Inc., a day on which the principal national securities exchange on
which such securities are listed or admitted to trading is open for the
transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued on or after the Payment Time but prior to the Separation
Time shall evidence one Right for each share of Common Stock represented thereby
and shall have impressed on, printed on, written on or otherwise affixed to them
a legend substantially as follows:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement, between
First Union Corporation (the "Company") and First Union National Bank,
as Rights Agent (as such agreement may be supplemented or amended from
time to time, the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
terminated, may become exercisable for securities or assets of the
Company or securities of another entity, may be exchanged for shares of
Common Stock or other securities or assets of the Company, may expire,
may become void (if they are Beneficially Owned by an Acquiring Person
or an Affiliate or Associate thereof, as such terms are defined in the
Rights Agreement, or by any transferee of any of the foregoing) or may
be evidenced by separate certificates and may no longer be evidenced by
this certificate. The Company will mail or arrange for the mailing of a
copy of the Rights Agreement to the holder of this certificate without
charge after the receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Payment Time shall, together with the letter mailed pursuant to Section
2.1, evidence one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
If the Common Stock issued after the Payment Time but prior to
the Separation Time shall be uncertificated, the registration of such Common
Stock on the
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stock transfer books of the Company shall evidence one Right for each share of
Common Stock represented thereby and the Company shall mail to every Person that
holds such Common Stock a confirmation of the registration of such Common Stock
on the stock transfer books of the Company, which confirmation will have
impressed, printed, written or stamped thereon or otherwise affixed thereto the
above legend. The Company shall mail or arrange for the mailing of a copy of
this Agreement to any Person that holds Common Stock, as evidenced by the
registration of the Common Stock in the name of such Person on the stock
transfer books of the Company, without charge after the receipt of a written
request therefor.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to
Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, on or after the Separation Time and prior
to the Expiration Time, to purchase, for the Exercise Price, one one-hundredth
of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (or, if the Common Stock shall be uncertificated, by the
registration of the associated Common Stock on the stock transfer books of the
Company and the confirmation thereof provided for in Section 2.2), together, in
the case of certificates issued prior to the Payment Time, with the letter
mailed to the record holder thereof pursuant to Section 2.1, and will be
transferable only together with, and will be transferred by a transfer (whether
with or without such letter or confirmation) of, such associated share.
(c) Subject to the terms and conditions hereof, on or after
the Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent will mail to each
holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having 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
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights; provided, however, that the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
(d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day on or after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such
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Rights with an Election to Exercise (an "Election to Exercise") substantially in
the form attached to the Rights Certificate duly completed, accompanied by
payment in cash, or by certified or official bank check or money order payable
to the order of the Company, of a sum equal to the Exercise Price multiplied by
the number of Rights being exercised and a sum sufficient to cover any transfer
tax or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates (or, if uncertificated, the registration on the stock transfer
books of the Company) for shares or depositary receipts (or both) in a name
other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased or, in the case of uncertificated
shares or other securities, requisition from a transfer agent a notice setting
forth such number of shares or other securities to be purchased for which
registration will be made on the stock transfer books of the Company) (the
Company hereby irrevocably authorizing its transfer agents to comply with all
such requisitions), and (B) if the Company elects pursuant to Section 5.5 not to
issue certificates (or effect registrations on the stock transfer books of the
Company) representing fractional shares, requisition from the depositary
selected by the Company depositary receipts representing the fractional shares
to be purchased or requisition from the Company the amount of cash to be paid in
lieu of fractional shares in accordance with Section 5.5 and (ii) after receipt
of such certificates, depositary receipts, notices and/or cash, deliver the same
to or upon the order of the registered holder of such Rights Certificate,
registered (in the case of certificates, depositary receipts or notices) in such
name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered (or
evidenced by registration on the stock transfer books of the Company) upon
exercise of Rights shall, at the time of delivery of the certificates (or
registration) for such shares (subject to payment of the Exercise Price), be
duly and validly authorized, executed, issued and delivered (or registered) and
fully paid and nonassessable; (ii) take all such action as may be necessary to
comply with any applicable requirements of the Securities Act of 1933 or the
Exchange Act, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided, that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the
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issuance or delivery of certificates (or the registration) for shares in a name
other than that of the holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In
the event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share
(or, if the Common Stock shall be uncertificated, such Right shall be evidenced
by the registration of such Common Stock on the stock transfer books of the
Company and the confirmation thereof provided for in Section 2.2). Rights shall
be issued by the Company in respect of shares of Common Stock that are issued or
sold by the Company after the Separation Time only to the extent provided in
Section 5.3.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to any non-extraordinary periodic cash dividend or a dividend paid
solely in Common Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger,
consolidation or statutory share exchange), or otherwise, the Company shall make
such adjustments, if any, in the Exercise Price, number of Rights and/or
securities or other property purchasable upon exercise of Rights as the Board of
Directors of the Company, in its sole discretion, may deem to be appropriate
under the circumstances in order to adequately protect the interests of the
holders of Rights generally, and the Company and the Rights Agent shall amend
this Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly
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prepare a certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment and (ii) promptly file with the Rights
Agent and with each transfer agent for the Common Stock a copy of such
certificate.
(d) Rights Certificates shall represent the right to purchase
the securities purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon exercise of the Rights,
even though such certificates may continue to express the securities purchasable
at the time of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each Person in whose
name any certificate for shares is issued (or registration on the stock transfer
books is effected) upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the shares represented thereby on the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the 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 (or registration) shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer, President or one
of its Vice Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Separation Time, the Company will notify
the Rights Agent of such Separation Time and will deliver Rights Certificates
executed by the Company to the Rights Agent for counter-signature, and, subject
to Section 3.1(b), the Rights Agent shall manually countersign and deliver such
Rights Certificates to the holders of the Rights pursuant to Section 2.3(c)
hereof. No Rights Certificate shall be valid for any purpose unless manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange. (a)
After the Separation Time, the Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as it may
prescribe, the Company will
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provide for the registration and transfer of Rights. The Rights Agent is hereby
appointed "Rights Registrar" for the purpose of maintaining the Rights Register
for the Company and registering Rights and transfers of Rights after the
Separation Time as herein provided. In the event that the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not register the transfer or exchange of
any Rights which have become void under Section 3.1(b), been exchanged under
Section 3.1(c) or been terminated under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate
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evidencing the same number of Rights as did the Rights Certificate so destroyed,
lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b) shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate or notice of transfer, if uncertificated) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name such Rights Certificate
(or, prior to the Separation Time, such Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary. As
used in this Agreement, unless the context otherwise requires, the term "holder"
of any Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
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(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate or Common
Stock registration, if uncertificated) for registration of transfer, the
Company, the Rights Agent and any agent of the Company or the Rights Agent may
deem and treat the person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS FOR
CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration
Time a Flip-in Date shall occur, except as provided in this Section 3.1, each
Right shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section 5.10), that
number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date that gave rise to the Flip-in Date equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that on or after such Stock Acquisition Date any
of the events described in Section 2.4(a) or (b), or any analogous event, shall
have occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner
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thereof to be an Acquiring Person or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option,
at any time after a Flip-in Date, to the extent applicable law permits, elect to
exchange all (but not less than all) the then outstanding Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
3.1(b)) for shares of Common Stock at an exchange ratio of two shares of Common
Stock per Right, appropriately adjusted in order to protect the interests of
holders of Rights generally in the event that after the Separation Time any of
the events described in Section 2.4(a) or (b), or any analogous event, shall
have occurred with respect to the Common Stock (such exchange ratio, as adjusted
from time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 3.1(b)), whether or
not previously exercised, will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio. Promptly after the
action of the Board of Directors electing to exchange the Rights, the Company
shall give notice thereof (specifying the steps to be taken to receive shares of
Common Stock in exchange for Rights) to the Rights Agent and the holders of the
Rights (other than Rights that have become void pursuant to Section 3.1(b))
outstanding immediately prior thereto by mailing such notice in accordance with
Section 5.9.
Each Person in whose name any certificate for shares is issued
(or for whom any registration on the stock transfer books of the Company is
made) upon the exchange of Rights pursuant to this Section 3.1(c) or Section
3.1(d) shall for all purposes be deemed to have become the holder of record of
the shares represented thereby on, and such certificate (or registration on the
stock transfer books of the Company) shall be dated (or registered as of), the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of any applicable taxes and other governmental charges
payable by the holder was made; provided, however, that if the date of such
surrender and payment is a date upon which the 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 (or registration on the stock transfer
books of the Company) shall be dated (or registered as of), the next succeeding
Business Day on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable.
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(e) In the event that there shall not be sufficient authorized
but unissued shares of Common Stock or Preferred Stock of the Company to permit
the exercise or exchange in full of the Rights in accordance with Section 3.1(a)
or if the Company so elects to make the exchange referred to in Section 3.1(c),
the Company shall either (i) call a meeting of shareholders seeking approval to
cause sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in clause
(ii) of this sentence) or (ii) take such action as shall be necessary to ensure
and provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Stock Acquisition Date to which it is a party, that
each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair value equal to the Exercise Price, or
(y) if the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event unless and until it shall have entered
into a supplemental agreement with the Flip-over Entity, for the benefit of the
holders of the Rights, providing that, upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter constitute the
right to purchase from the Flip-over Entity, upon exercise thereof in accordance
with the terms hereof, that number of shares of Flip-over Stock of the Flip-over
Entity having an aggregate Market Price on the date of consummation or
occurrence of such Flip-over Transaction or Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that after such date of consummation or occurrence
any of the events described in Section 2.4(a) or (b), or any analogous event,
shall have occurred with respect to the Flip-over Stock) and (ii) the Flip-over
Entity shall thereafter be liable for, and shall assume, by virtue of such
Flip-over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
terminated pursuant to Section 5.1 hereof pursuant to an agreement entered into
by the Company prior to a Flip-in Date, the Company shall not enter into any
agreement with respect to, consummate or permit to occur any Flip-over
Transaction or Event if at the time thereof there are any rights, warrants or
securities outstanding or any other arrangements, agreements or instruments that
would eliminate or otherwise diminish in any material
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respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability.
(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
certificate for securities (or registration on the stock transfer books of the
Company) purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
is a party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 4.4 hereof. In case at the time such successor Rights
Agent succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the
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name of the successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter 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 a person believed by the Rights Agent to
be the Chairman of the Board, the Chief Executive Officer, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the Secretary
or any Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate will be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
certificates, if any, for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate, if any,
for securities purchasable upon exercise of
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Rights or Rights Certificate (except its countersignature thereof); nor will it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under the provisions of Section 2.4, 3.1 or 3.2 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 after receipt of the certificate contemplated
by Section 2.4 describing any such adjustment); nor will it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any Rights
or as to whether any securities purchasable upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued and delivered and fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman of the Board, the
Chief Executive Officer, the President or any Vice President or the Secretary or
any Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such persons for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered by
it in good faith in accordance with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each
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transfer agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Rights in accordance with Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 days after 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 any Rights (which holder shall,
with such notice, submit such holder's Rights Certificate for inspection by the
Company), then the holder of any Rights 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 Person
organized and doing business under the laws of the United States or any state of
the United States, in good standing, which is authorized under such laws to
exercise the powers of the Rights Agent contemplated by this Agreement and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; 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 will 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 holders of the
Rights. Failure to give any notice provided for in this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Termination. (a) The Board of Directors of the Company
may, at its option, at any time prior to the close of business on the Flip-in
Date, elect to terminate the Rights without any payment to any holder thereof.
(b) Immediately upon the action of the Board of Directors of
the Company electing to terminate the Rights (or, if the resolution of the Board
of Directors electing to terminate the Rights states that the termination will
not be effective until the occurrence of a specified future time or event, upon
the occurrence of such future time or event), without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right, whether or not previously exercised, will thereafter be null and void.
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5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged, as provided in Section 3.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock by
the Company following the Separation Time and prior to the Expiration Time
pursuant to the terms of securities convertible or redeemable into shares of
Common Stock (other than any securities issued or issuable in connection with
the exercise or exchange of Rights) or to options, in each case issued or
granted prior to, and outstanding at, the Separation Time, the Company shall
issue to the holders of such shares of Common Stock, Rights Certificates
representing the appropriate number of Rights in connection with the issuance or
sale of such shares of Common Stock; provided, however, in each case, (i) no
such Rights Certificate shall be issued, if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or to the Person to whom
such Rights Certificates would be issued, (ii) no such Rights Certificates shall
be issued if, and to the extent that, appropriate adjustment shall have
otherwise been made in lieu of the issuance thereof, and (iii) the Company shall
have no obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) prior to the close of business on the
Flip-in Date, in any respect, and (ii) after the close of business on the
Flip-in Date, to make any changes that the Company may deem necessary or
desirable and which shall not materially adversely affect the interests of the
holders of Rights generally or in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be inconsistent with any
other provisions herein or otherwise defective. The Rights Agent will duly
execute and deliver any supplement or amendment hereto requested by the Company
which satisfies the terms of the preceding sentence, provided that any
supplement or amendment shall become effective immediately upon execution by the
Company, whether or not also executed by the Rights Agent.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing (or register on the stock transfer books of the
Company) fractional shares upon exercise or exchange of Rights, the Company
shall, in lieu thereof, in the sole discretion of the Board of Directors, either
(a) evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled
-21-
<PAGE>
as a beneficial owner of such fractional share, or (b) pay to the registered
holder of such Rights the appropriate fraction of the Market Price per share in
cash.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Sections 3.1(b) and 5.14), rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, 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 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose on or after the Separation Time and prior to the Expiration Time (i) to
effect or permit a Flip-over Transaction or Event or (ii) 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, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
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<PAGE>
First Union Corporation
One First Union Center
Charlotte, North Carolina 28288
Attention: Corporate Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
First Union National Bank
1525 West W.T. Harris Boulevard
Building 3C3
Charlotte, North Carolina 28288-1153
Attention: Shareholder Services Department
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, 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.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken pursuant
to Section 3.1 or to comply with federal or state securities laws, the Company
may suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
-23-
<PAGE>
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 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.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board 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. All such actions, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) done or made by the Board, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors of the
Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NORTH 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
PERFORMED ENTIRELY WITHIN SUCH STATE.
5.17 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.
-24-
<PAGE>
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
-25-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
FIRST UNION CORPORATION
By: /s/ Mark C. Treanor
---------------------------------
Name: Mark C. Treanor
Title: Executive Vice President
FIRST UNION NATIONAL BANK,
as Rights Agent
By: /s/ Sherrie A. Garrett
---------------------------------
Name: Sherrie A. Garrett
Title: Assistant Vice President
-26-
<PAGE>
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO TERMINATION OR
MANDATORY EXCHANGE, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
FIRST UNION CORPORATION
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Shareholder Protection Rights Agreement, dated
as of December 19, 2000 (as amended from time to time, the "Rights Agreement"),
between First Union Corporation, a North Carolina corporation (the "Company"),
and First Union National Bank, as Rights Agent (the "Rights Agent", which term
shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Separation Time (as such term is
defined in the Rights Agreement) and prior to the close of business on
__________, _____, one one-hundredth of a fully paid share of Participating
Class A Preferred Stock, no-par value (the "Preferred Stock"), of the Company
(subject to adjustment as provided in the Rights Agreement) at the Exercise
Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent in Charlotte, North Carolina. The Exercise Price
shall initially be $105.00 per Right and shall be subject to adjustment in
certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities of the
Company other than Preferred Stock or assets of the Company, all as provided in
the Rights Agreement.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights,
<PAGE>
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available without cost
upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised in part,
the registered holder shall be entitled to receive, upon surrender hereof,
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) terminated, without any payment to the
holder, by the Company under certain circumstances, at its option, or (b)
exchanged by the Company under certain circumstances, at its option, for two
shares of Common Stock, par value $3.33 1/3 per share or one one-hundredth of a
share of Preferred Stock per Right (or, in certain cases, other securities or
assets of the Company), subject in each case to adjustment in certain events as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
any securities 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 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 the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised or exchanged as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
-2-
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: ____________
ATTEST: FIRST UNION CORPORATION
___________________________ By______________________
Secretary
Countersigned:
FIRST UNION NATIONAL BANK
By____________________________
Authorized Signature
-3-
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells,
assigns and transfers unto _____________________________________________
(Please print name
________________________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to Exchange Act Rule 17Ad-15.
------------------------------------------------------------
(To be completed if true)
<PAGE>
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------
Signature
------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-2-
<PAGE>
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: FIRST UNION CORPORATION
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of [Common] [Participating Class A Preferred]
Stock issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
-----------------------------------
Address:
-----------------------------------
Social Security or Other Taxpayer
Identification Number:
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
-----------------------------------
Address:
-----------------------------------
Social Security or Other Taxpayer
Identification Number:
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to name
as written upon the face of the
attached Rights Certificate in every
particular, without alteration or
enlargement or any change whatsoever)
<PAGE>
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to Exchange Act Rule 17Ad-15.
------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by the
attached Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-------------------------
Signature
------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-2-
<PAGE>
EXHIBIT B
FORM OF ARTICLES OF AMENDMENT AND TERMS WITH RESPECT TO
PARTICIPATING PREFERRED STOCK OF FIRST UNION CORPORATION
Pursuant to Section 55-6-02 of the Business
Corporation Act of the State of North Carolina
We, the undersigned, ____________________ and
____________________, the ____________________, and __________, respectively, of
First Union Corporation, a North Carolina corporation (the "Corporation"), do
hereby certify as follows:
Pursuant to authority granted by Article 4 of the Amended and
Restated Articles of Incorporation of the Corporation, and in accordance with
the provisions of Section 55-6-02 of the Business Corporation Act of the State
of North Carolina, the Board of Directors of the Corporation has duly adopted
the following amendment determining certain preferences, privileges, limitations
and relative rights of a new series of the Corporation's Class A Preferred
Stock, no-par value, before the issuance of any shares of such series.
1. Designation.
-----------
The distinctive serial designation of this series shall be
"Participating Class A Preferred Stock" (hereinafter called "this
Series"). Each share of this Series shall be identical in all respects
with the other shares of this Series except as to the dates from and
after which dividends thereon shall be cumulative.
The number of shares in this Series shall initially be
_______,(1) which number may from time to time be increased or
decreased (but not below the number then outstanding) by the Board of
Directors. Shares of this Series purchased by the Corporation shall be
cancelled and shall revert to authorized but unissued shares of
Preferred Stock undesignated as to series. Shares of this Series may be
issued in fractional shares which are whole number multiples of one
one-hundredth of a share, which fractional shares shall entitle the
holder, in proportion to such holder's fractional share, to all rights
of a holder of a whole share of this Series.
2. Dividends.
---------
The holders of full or fractional shares of this Series shall
be entitled to receive, when and as declared by the Board of Directors,
but only out of funds legally available therefor, dividends, (A) on
each date that dividends or other
--------
(1) Insert number equal to the number of shares of Common Stock outstanding
on date prior to filing certificate of designation divided by 100.
<PAGE>
distributions (other than dividends or distributions payable in Common
Stock of the Corporation) are payable on or in respect of Common Stock
comprising part of the Reference Package (as defined below), in an
amount per whole share of this Series equal to the aggregate amount of
dividends or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) that would be payable on
such date to a holder of the Reference Package and (B) on the last day
of March, June, September and December in each year, in an amount per
whole share of this Series equal to the excess (if any) of $____2 over
the aggregate dividends paid per whole share of this Series during the
three month period ending on such last day. Each such dividend shall be
paid to the holders of record of shares of this Series on the date, not
exceeding fifty days preceding such dividend or distribution payment
date, fixed for the purpose by the Board of Directors in advance of
payment of each particular dividend or distribution. Dividends on each
full and each fractional share of this Series shall be cumulative from
the date such full or fractional share is originally issued; provided
that any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment date to
which such record date relates shall not be entitled to receive the
dividend payable on such dividend payment date or any amount in respect
of the period from such original issuance to such dividend payment
date.
The term "Reference Package" shall initially mean 100 shares
of Common Stock, par value $3.33 1/3 per share ("Common Stock"), of the
Corporation. In the event the Corporation shall at any time after the
close of business on ________, ____3 (A) declare or pay a dividend on
any Common Stock payable in Common Stock, (B) subdivide any Common
Stock or (C) combine any Common Stock into a smaller number of shares,
then and in each such case the Reference Package after such event shall
be the Common Stock that a holder of the Reference Package immediately
prior to such event would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of
full cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock
ranking junior to this
--------
(2) Insert an amount equal to 1/4 of 1% of the Exercise Price divided by
the number of shares of Preferred Stock purchasable upon exercise of
one Right. Where a Right is exercisable for one one-hundredth of a
share, this simplifies to one-fourth the Exercise Price.
--------
(3) For a certificate of designation relating to shares to be issued
pursuant to Section 2.3 of the Rights of Agreement, insert the
Separation Time. For a certificate of designation relating to shares to
be issued pursuant to Section 3.1(d) of the rights Agreement, insert
the Flip-in Date.
-2-
<PAGE>
Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made
upon the Common Stock or upon any other stock ranking junior to this
Series as to dividends or upon liquidation, unless the full cumulative
dividends (including the dividend to be paid upon payment of such
dividend or other distribution) on all outstanding shares of this
Series shall have been, or shall contemporaneously be, paid. When
dividends are not paid in full upon this Series and any other stock
ranking on a parity as to dividends with this Series, all dividends
declared upon shares of this Series and any other stock ranking on a
parity as to dividends shall be declared pro rata so that in all cases
the amount of dividends declared per share on this Series and such
other stock shall bear to each other the same ratio that accumulated
dividends per share on the shares of the Series and such other stock
bear to each other. Neither the Common Stock nor any other stock of the
Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange
for stock of the Corporation ranking junior to this Series as to
dividends and upon liquidation), unless the full cumulative dividends
(including the dividend to be paid upon payment of such dividend,
distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall
contemporaneously be, paid.
3. Merger, Consolidation, Reclassification.
---------------------------------------
In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for
or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the
same time be similarly exchanged or changed in an amount per whole
share equal to the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, that a holder
of the Reference Package would be entitled to receive as a result of
such transaction.
4. Liquidation.
-----------
In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the
holders of full and fractional shares of this Series shall be entitled,
before any distribution or payment is made on any date to the holders
of the Common Stock or any other stock of the Corporation ranking
junior to this Series upon liquidation, to be paid in full an amount
per whole share of this Series equal to the greater of (A) $________(4)
or (B) the aggregate amount distributed or to be distributed in
--------
(4) Insert an amount equal to 100 times the Exercise Price in effect as of
the Separation Time.
-3-
<PAGE>
connection with such liquidation, dissolution or winding up to a holder
of the Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with accrued
dividends to such distribution or payment date, whether or not earned
or declared. If such payment shall have been made in full to all
holders of shares of this Series, the holders of shares of this Series
as such shall have no right or claim to any of the remaining assets of
the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to the first
paragraph of this Section (v), no such distribution shall be made on
account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this
Series, ratably in proportion to the full distributable amounts for
which holders of all such parity shares are respectively entitled upon
such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of assets of the Corporation available
for distribution to its shareholders all amounts to which such holders
are entitled pursuant to the first paragraph of this Section 4 before
any payment shall be made to the holders of Common Stock or any other
stock of the Corporation ranking junior upon liquidation to this
Series.
For the purposes of this Section 4, the consolidation or
merger of, or binding statutory share exchange by, the Corporation with
any other corporation shall not be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
5. Redemption, Conversion, Exchange.
--------------------------------
The shares of this Series shall not be redeemable, convertible
or exchangeable.
6. Voting Rights.
-------------
In addition to any other vote or consent of shareholders
required by law or by the Amended and Restated Articles of
Incorporation of the Corporation, and except as otherwise required by
law, each share (or fraction thereof) of this Series shall, on any
matter, vote as a class with any other capital stock comprising part of
the Reference Package and shall have the number of votes thereon that a
holder of the Reference Package would have.
-4-
<PAGE>
IN WITNESS WHEREOF, the undersigned have signed and attested
this certificate on the ____ day of _________, _____.
---------------------------------
---------------------------------
Attest:
------------------------------
-5-
