==============================================================================
NORFOLK SOUTHERN CORPORATION
and
THE BANK OF NEW YORK
Rights Agent
------------------------------
Rights Agreement
Dated as of September 26, 2000
==============================================================================
TABLE OF CONTENTS
Page
Section 1. Certain Definitions.........................................1
Section 2. Appointment of Rights Agent.................................7
Section 3. Issue of Right Certificates.................................7
Section 4. Form of Right Certificates.................................10
Section 5. Countersignature and Registration..........................11
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates.........................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights..................................................12
Section 8. Cancellation of Right Certificates.........................15
Section 9. Reservation and Availability of Capital Stock..............15
Section 10. Preferred Stock Record Date................................17
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights...........................................17
Section 12. Certification of Adjusted Purchase Price or Number
of Shares..................................................27
Section 13. Consolidation, Merger or Sale or Transfer of Assets,
Cash Flow or Earning Power.................................27
Section 14. Fractional Rights, and Fractional Shares...................31
Section 15. Rights of Action...........................................32
Section 16. Agreement of Right Holders.................................33
Section 17. Right Certificate Holder Not Deemed a Shareholder..........34
Section 18. Concerning the Rights Agent................................34
Section 19. Merger or Consolidation or Change of Name of Rights
Agent......................................................35
Section 20. Duties of Rights Agent.....................................36
Section 21. Change of Rights Agent.....................................39
Section 22. Issuance of New Right Certificates.........................40
Section 23. Redemption.................................................40
Section 24. Exchange...................................................41
Section 25. Notice of Certain Events...................................43
Section 26. Notices....................................................44
Section 27. Supplements and Amendments.................................44
Section 28. Successors.................................................45
Section 29. Determinations and Actions Taken by the Board of
Directors..................................................45
Section 30. Benefits of this Agreement.................................46
Section 31. Severability...............................................46
Section 32. Governing Law..............................................46
Section 33. Counterparts...............................................47
Section 34. Descriptive Headings.......................................47
Exhibit A Form of Amendment to Restated Articles of Incorporation....A-1
Exhibit B Form of Right Certificate.................................B-1
Exhibit C Summary of Rights to Purchase Preferred Stock.............C-1
RIGHTS AGREEMENT
This Agreement, dated as of September 26, 2000 between Norfolk
Southern Corporation, a Virginia corporation (the "Company"), and The Bank
of New York, a New York banking corporation (the "Rights Agent"):
W I T N E S S E T H
WHEREAS, on September 26, 2000, the Board of Directors of the
Company determined it desirable and in the best interests of the Company
and its shareholders for the Company to adopt a shareholder rights plan;
WHEREAS, on September 26, 2000 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right (as hereinafter defined) for
each share of common stock, par value $1.00 per share, of the Company (the
"Common Stock") outstanding upon the Close of Business (as hereinafter
defined) on October 16, 2000 (the "Record Date"), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(p) hereof) for each share of Common Stock
issued between the Record Date and the Distribution Date (as hereinafter
defined) and in certain other circumstances provided herein, each Right
initially representing the right to purchase one one-thousandth (1/1000th)
of a share of Series A Junior Participating Preferred Stock of the Company
(a "Unit") having the rights, powers and preferences set forth in the form
of the Amendment to the Restated Articles of Incorporation of the Company
attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "1933 Act" shall have the meaning assigned to it in
Section 9(b).
(b) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, is the
Beneficial Owner of a Substantial Block, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
plan or employee stock plan of the Company, or of any Subsidiary of the
Company, or any Person organized, appointed, established or holding Voting
Stock by, for or pursuant to, the terms of any such plan, (iv) any Person
who becomes the Beneficial Owner of a Substantial Block as a result of a
reduction in the number of shares of Voting Stock outstanding due to the
repurchase of shares of Voting Stock by the Company unless and until such
Person, after becoming aware that such Person has become the Beneficial
Owner of a Substantial Block of the then outstanding shares of Voting
Stock, acquires beneficial ownership of additional shares of Voting Stock
representing one percent (1%) or more of the shares of Voting Stock then
outstanding, or (v) any such Person who has reported or is required to
report such ownership on Schedule 13G under the Securities and Exchange Act
of 1934, as amended and in effect on the date of the Agreement (the
"Exchange Act") (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which
Schedule 13D does not state any intention to or reserve the right to
control or influence the management or policies of the Company or engage in
any of the actions specified in Item 4 of such schedule (other than the
disposition of the Common Stock) and, within 10 Business Days of being
requested by the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in excess of 15%
inadvertently or without knowledge of the terms of the Rights and who,
together with all Affiliates and Associates, thereafter does not acquire
additional shares of Common Stock while the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding; provided, however, that if
the Person requested to so certify fails to do so within 10 Business Days
(unless extended by the Board of Directors), then such Person shall become
an Acquiring Person immediately after such 10-Business-Day period, as if at
all extended.
(c) "Adjustment Shares" shall have the meaning assigned to
it in Section 11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or
not in writing), or upon the exercise of any conversion, exchange or
purchase rights (other than the Rights), warrants or options, or
otherwise, provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to "Beneficially Own," securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event (as hereinafter defined), or securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
(as hereinafter defined) or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant to Section 11(a)(i) hereof
in connection with an adjustment made with respect to any Original
Rights; or, (B) the right to vote pursuant to any agreement,
arrangement or understanding; or
(iii)which are beneficially owned, directly or
indirectly by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any securities of the Company;
provided, however, that a Person shall not be deemed the Beneficial owner
of, or to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to and in accordance with, the applicable rules
and regulations of the Exchange Act, and provided, further, that nothing in
this paragraph (e) shall cause a person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to Beneficially
Own, any securities acquired through such person's participation in good
faith in a firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(f) "Business Day" shall mean any day other than a
Saturday, Sunday or day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Virginia time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Virginia time, on the next
succeeding Business Day.
(h) "Common Stock" shall have the meaning assigned to it in
the recital, and "common stock" (i) when used with reference to any Person
other than the Company shall mean the capital stock with the greatest
voting power of such Person or, if such Person is a Subsidiary of another
Person, the Person which ultimately controls such first-mentioned Person
and (ii) when used with reference to any Person other than the Company
which shall not be organized in corporate form shall mean units of
beneficial interest which (A) shall represent the right to participate
generally in the profits and losses of such Person (including, without
limitation, any flow-through tax benefits resulting from an ownership
interest in such Person) and which (B) shall be entitled to exercise the
greatest voting power of such Person or, in the case of a limited
partnership, shall have the power to remove the general partner or
partners.
(i) "Common Stock Equivalents" shall have the meaning
assigned to it in Section 11(a)(iii).
(j) "Company" shall have the meaning assigned to it in the
first paragraph of this Agreement.
(k) "Current Market Price" shall have the meaning assigned
to it in Section 11(d)(i).
(l) "Current Value" shall have the meaning assigned to it
in Section 11(a)(iii).
(m) "Distribution Date" shall have the meaning assigned to
it in Section 3.
(n) "Equivalent Preferred Stock" shall have the meaning
assigned to it in Section 11(b).
(o) "Equivalent Stock" shall have the meaning assigned to
it in Section 7.
(p) "Exchange Act" shall have the meaning assigned to it in
Section 1(e).
(q) "Exchange Ratio" shall have the meaning assigned to it
in Section 24.
(r) "Expiration Date" shall have the meaning assigned to it
in Section 7.
(s) "Final Expiration Date" shall have the meaning assigned
to it in Section 7.
(t) "NASDAQ" shall have the meaning assigned to it in
Section 11(d)(i).
(u) "Person" shall mean any individual, firm, corporation,
or other entity and shall include any successor by merger or otherwise of
such entity.
(v) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company and, to
the extent that there are not a sufficient number of shares of Series A
Junior Participating Preferred Stock authorized to permit the full exercise
of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the
terms of the Series A Junior Participating Preferred Stock.
(w) "Principal Party" shall have the meaning assigned to
it in Section 13.
(x) "Purchase Price" shall have the meaning assigned to it
in Section 4.
(y) "Record Date" shall have the meaning assigned to it in
the recitals.
(z) "Redemption Price" shall have the meaning assigned to
it in Section 23.
(aa) "Right Certificate" shall have the meaning assigned to
it in Section 3.
(bb) "Rights" shall have the meaning assigned to it in the
recitals.
(cc) "Rights Agent" shall have the meaning assigned to it
in the first paragraph of this Agreement.
(dd) "Rights Dividend Declaration Date" shall have the
meaning assigned to it in the recitals.
(ee) "Section 11(a)(ii) Event" shall have the meaning
assigned to it in Section 7(e).
(ff) "Section 11(a)(ii) Trigger Date" shall have the
meaning assigned to it in Section 11(a)(iii).
(gg) "Section 13 Event" shall have the meaning assigned to
it in Section 7(e).
(hh) "Spread" shall have the meaning assigned to it in
Section 11(a)(iii).
(ii) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(jj) "Subsidiary" shall mean, with respect to any Person,
any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by such Person and any Affiliate of such Person.
(kk) "Substantial Block" shall mean a number of shares of
Voting Stock having in the aggregate 15% or more of the general voting
power.
(ll) "Substitution Period" shall have the meaning assigned
to it in Section 11(a)(iii).
(mm) "Summary of Rights" shall have the meaning assigned to
it in Section 3(b).
(nn) "Trading Day" shall have the meaning assigned to it in
Section 11(d).
(oo) "Triggering Event" shall mean a Section 11(a)(ii)
Event or Section 13 Event.
(pp) "Unit" shall have the meaning assigned to it in the
recitals.
(qq) "Voting Stock" shall mean shares of the Company's
capital stock having general voting power. For the purposes hereof, "voting
power," when used with reference to the capital stock of, or units of
equity interests in, any Person shall mean the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote
in the election of directors of such Person (if such Person is a
corporation) or to participate in the management and control of such Person
(if such Person is not a corporation).
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such Co-Rights
Agent or Agents as it may deem necessary or desirable upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or
omissions of any such Co-Rights Agent.
Section 3. Issue of Right Certificates. (a) The "Distribution
Date" shall mean the earlier of (i) the tenth Business Day (or such later
date as may be determined by the Board of Directors) after the date of the
commencement of a tender or exchange offer (as determined by reference to
Rule 14d-2(a) (or any successor rule) under the Exchange Act) by any Person
(other than the Company, any Subsidiary of the Company, or any employee
benefit plan or employee stock plan of the Company or any Subsidiary of the
Company) for a number of shares of the outstanding Voting Stock having 15%
or more of the general voting power (or, if the tenth Business Day after
such date occurs before the Record Date, the Close of Business on the
Record Date), or (ii) the tenth Business Day after a Stock Acquisition Date
(or, if the tenth Business Day after such date occurs before the Record
Date, the Close of Business on the Record Date). Up to and including the
Distribution Date, (x) the Rights will be evidenced by the certificates for
Common Stock registered in the names of the holders of Common Stock (which
certificates for Common Stock shall be deemed also to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Stock. The Company shall give the Rights Agent prompt
written notice of the Distribution Date. As soon as practicable after the
Distribution Date, and receipt of written notice of the Distribution Date
from the Company, the Rights Agent will, at the Company's expense, mail, by
first-class, insured, postage prepaid mail, to each record holder of
Common Stock as of the Close of Business on the Distribution Date, as shown
by the records of the Company at the Close of Business on the Distribution
Date, at the address of such holder shown on such records, a Right
Certificate (the "Right Certificate"), in substantially the form of Exhibit
B hereto, evidencing one Right for each share of Common Stock so held. In
the event that an adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Right Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights.
As of and after the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of
Rights"), to any holder of Rights who may so request from time to time
prior to the Expiration Date. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders
of the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7(a) hereof), the
transfer of any certificates representing shares of Common Stock in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock. As soon as practicable,
the Company will cause certificates for Common Stock to be issued after
October 16, 2000, but prior to the earlier of the Distribution Date or the
Expiration Date or the date, if any, on which the Rights are redeemed, to
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Norfolk Southern Corporation and the Rights Agent thereunder
(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 Norfolk Southern
Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Norfolk Southern Corporation will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) or one of
certain transferees thereof, whether currently held by or on
behalf of such Person or by any subsequent holder, may be
limited, voided or otherwise affected as provided in Section
7(e) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, until
the Distribution Date or the Expiration Date, the Rights associated with
Common Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Stock certificate.
(c) Until the Distribution Date, the surrender for transfer
of any of the certificates for Common Stock outstanding on or after the
Close of Business on October 16, 2000, shall also constitute the transfer
of the Rights associated with Common Stock represented by such
certificates. After the Distribution Date, the Rights will be evidenced
solely by the Right Certificates.
Section 4. Form of Right Certificates. (a) The Right
Certificates (and the forms of assignment and of election to purchase
shares to be printed on the reverse thereof) shall be in substantially the
form of Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. The Right Certificates shall be in a
machine printable format and in a form reasonably satisfactory to the
Rights Agent. Subject to the provisions of Section 11, Section 13 and
Section 22, the Right Certificates, whenever issued, shall be dated as of
the Record Date, show the date of countersignature and on their face shall
entitle the holders thereof to purchase such number of shares of Preferred
Stock as shall be set forth therein at the price per one one-thousandth
(1/1000th) of a share set forth therein (the "Purchase Price"), but the
number and type of such shares and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a),
Section 11(i), or Section 22 that represents Rights Beneficially Owned by:
(i) an Acquiring Person or any Associate or Affiliate of such Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary purpose or
effect avoidance of Section 7(e), and any Right Certificate issued pursuant
to Section 6 or Section 11 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible and reasonably identifiable as such)
the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement) or one of certain transferees
thereof. Accordingly, under certain circumstances as provided in the
Rights Agreement, this Right Certificate and the Rights represented
hereby may be limited, voided or otherwise affected as provided in
Section 7(e) of such Agreement.
The Company shall instruct the Rights Agent in writing of the
Rights which should be so legended and shall supply the Rights Agent with
such legended Right Certificates.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its Chief Executive Officer, any Vice Chairman, its President or
any Vice President, either manually or by facsimile signature, and have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, issued and delivered with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Right Certificates upon exercise or
transfer, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each Right Certificate, the date of each Right
Certificate and the number of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the Expiration Date or
the day prior to the day, if any, on which the Rights are to be redeemed
pursuant to Section 23, any Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase such
number of shares of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case may be)
as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate shall make such request in
writing, signed by the registered holder with such signature guaranteed in
such manner as is reasonably satisfactory to the Rights Agent, delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
principal stock transfer office of the Rights Agent. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14, countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment by the holders of Rights of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Subject to Section 7(e), at any time after the Distribution
Date, the registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth in Section
9, Section 11(a)(iii) and Section 23) in whole or in part upon surrender of
the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal stock
transfer office of the Rights Agent, together with payment of the Purchase
Price for each one one-thousandth (1/1000th) of a share of Preferred Stock
(or other securities, cash or other assets, as the case may be) as to which
the Rights are exercised, at or prior to the earlier of (i) the Close of
Business on September 26, 2010 or such later date as may be established by
the Board of Directors prior to the expiration of the Rights (such date
being hereinafter referred to as the "Final Expiration Date") or (ii) the
time at which the Rights are redeemed or exchanged as provided in Section
23 and Section 24 (the earlier of (i) and (ii) being herein referred to as
the "Expiration Date"). If at any time after the Rights become exercisable
hereunder but prior to the Expiration Date the Company is prohibited by its
Restated Articles of Incorporation from issuing Preferred Stock upon the
exercise of all of the outstanding Rights, the Company may issue upon the
exercise of the Rights shares of stock or other securities of the Company
of equivalent value to the Preferred Stock ("Equivalent Stock"), as
determined by the Board of Directors.
(b) The Purchase Price for each one one-thousandth
(1/1000th) of a share of Preferred Stock pursuant to the exercise of a
Right shall initially be $85, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment of the Purchase Price for
the shares to be purchased and an amount equal to any applicable transfer
tax in cash, or by certified check or money order payable to the order of
the Company, the Rights Agent shall, subject to this Section 7 and Section
20(k), thereupon promptly (i) (A) requisition from any transfer agent of
Preferred Stock (or any Equivalent Stock then issuable) a certificate for
the number of shares of Preferred Stock (or any Equivalent Stock then
issuable) to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths (1/1000ths) of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the depositary agent
to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of a fractional
share in accordance with Section 14 and (iii) promptly after receipt of
such certificate, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and, when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be
made in cash or by certified bank check or bank draft payable to the order
of the Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent,
if and when appropriate. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to, or upon the order of,
the registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14.
(e) Notwithstanding any provision of this Agreement to the
contrary, upon the occurrence of any of the events described in Section
11(a)(ii) (a "Section 11(a)(ii) Event") or in clauses (a), (b) or (c) of
the first sentence of Section 13 (a "Section 13 Event"), any Rights that
are at the time of the occurrence of such event Beneficially Owned by (i)
an Acquiring Person or by any Associate or Affiliate of such Acquiring
Person or (ii) a transferee of an Acquiring Person or of any Associate or
Affiliate of such Acquiring Person (A) who becomes a transferee after the
Acquiring Person becomes such, or (B) who becomes a transferee prior or to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (1) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(2) a transfer which the Board of Directors of the Company has determined
is part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its making or failing to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. The Rights Agent will endeavor to
comply with the provisions hereof to the extent it has received
instructions from the Company concerning such matters.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company.
Section 9. Reservation and Availability of Capital Stock. The
Company covenants and agrees that it will (a) cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized
and unissued shares of Common Stock and/or other securities), the number of
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that will be sufficient to
permit the exercise in full of all outstanding Rights, (b) take all such
action as may be necessary to ensure that all shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable, (c) pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any shares of
Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) upon the exercise of Rights and (d)
take all such action, from and after the date the Rights become exercisable
hereunder, as may be necessary to permit the exercise of the Rights for
Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities), including any required registration
under the Securities Act of 1933, as amended (the "1933 Act"), and, in
connection therewith and if deemed desirable by the Company, use its
reasonable best efforts to list (or continue the listing of) the Preferred
Stock on a national securities exchange and to cause all shares of
Preferred Stock reserved for issuance upon exercise of Rights to be listed
on such exchange upon official notice of issuance upon such exercise. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days,
the exercisability of the Rights in order to comply with all applicable
Federal and state securities laws. Upon any such suspension, the Company
shall issue a public announcement (and shall provide written notice to the
Rights Agent) stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement, in each case with
simultaneous written notice to the Rights Agent, at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement has been declared
effective. The Rights Agent may assume that any Right exercised is
permitted to be exercised under applicable law and shall have no liability
for acting in reliance upon such assumption, except to the extent the
Rights Agent has received written notice to the contrary in accordance with
this Agreement. Notwithstanding the provisions of clause (c) of the first
sentence of this Section 9, the Company shall not be required to pay any
transfer tax which may be payable in respect of any transfer involved in
the transfer or delivery of Right Certificates or the issuance or delivery
of certificates for Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) in a name other
than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates for
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) transfer books of
the Company are closed, such Person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a shareholder of
the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e), then and in each such event, the number of shares of
Preferred Stock issuable upon the exercise of a Right and the
Purchase Price payable after such event shall be the number of shares
of Preferred Stock issuable immediately prior to such event
multiplied by a fraction the numerator of which is the number of
Rights outstanding immediately prior to such event and the
denominator of which is the number of Rights outstanding immediately
after such event and the Purchase Price after such event shall be the
Purchase Price in effect immediately prior to such event multiplied
by such fraction. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event that any Person shall, at any time
after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a) hereof, then, and
in each such case, proper provision shall be made so that each holder
of a Right, except as provided below and in Section 7(e), shall
thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths (1/1000ths) of
a share of Preferred Stock, such number of shares of Common Stock as
shall, equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths (1/1000ths)
of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the
Current Market Price (determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii)In the event that the number of shares of Common
Stock which are authorized by the Company's Articles of Restatement,
but which are not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights, are not sufficient to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall (A)
determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value"), and (B) with respect to
each Right (subject to Section 7(e) hereof), make adequate provision
to substitute for the Adjustment Shares, upon the exercise of a Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock, such as the Preferred Stock,
which the Board has deemed to have essentially the same value or
economic rights as shares of Common Stock (such shares of preferred
stock being referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current
Value (less the amount of any reduction in the Purchase Price), where
such aggregate value has been determined by the Board based upon the
advice of a nationally recognized investment banking firm selected by
the Board; provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of the Right and without
requiring payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For purposes
of the preceding sentence, the term "Spread" shall mean the excess of
(i) the Current Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth above may
be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be
extended, is herein called the "Substitution Period"). To the extent
that action is to be taken pursuant to the first and/or third
sentences of this Section 11(a)(iii), the Company (1) shall provide,
subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek such shareholder approval for such
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of each
Adjustment Share shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share
or per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock on such
date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Stock (or shares having
the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock (or having a conversion price per share, if a security
convertible into Preferred Stock or Equivalent Preferred Stock) less than
the Current Market Price per share of Preferred Stock (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, of
which the numerator shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such Current Market Price and of which the
denominator shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of additional shares of Preferred Stock
and/or Equivalent Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred Stock owned
by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or evidences of indebtedness, or of
subscription rights or warrants (excluding those referred to in Section
ll(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Price per share of Preferred Stock (as defined in Section ll(d)) on
such record date, less the fair market value (as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock,
and of which the denominator shall be such Current Market Price per share
of Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii), the "current
market price" per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days immediately prior to
such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share of Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share of
such stock is determined during a period following the announcement
by the issuer of such stock of (A) a dividend or distribution on such
stock payable in shares of such stock or securities convertible into
shares of such stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification shall not
have occurred prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above, then,
and in each such case, the Current Market Price shall be
appropriately adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of such stock are not listed or
admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on
which the shares of such stock are listed or admitted to trading or,
if the shares of such stock are not listed or admitted to trading on
any national securities exchange, last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or such
other system then in use, or if on any such date the shares of such
stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board. If
on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in
good faith by the Board shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the shares of such stock are listed or admitted to trading is
open for the transaction of business or, if the shares of such stock
are not listed or admitted to trading on any national securities
exchange, a Business Day. If such stock is not publicly held or not
so listed or traded, "Current Market Price" per share shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder,
the Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner provided
above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d), the
Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1000 (as such number may
be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. For
all purposes of this Agreement, the Current Market Price of a Unit
shall be equal to the Current Market Price of one share of Preferred
Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) In the event that at any time, as a result of an
adjustment made pursuant to Section ll(a)(ii) or Section 13(a), the holder
of any Right thereafter exercised shall become entitled to receive any
shares of capita1 stock of the Company other than shares of Preferred
Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the shares of Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths (1/1000ths) of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, al1 subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths (1/1000ths) of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained by (i) multiplying
(x) the number of one one-thousandths (1/1000ths) of a share covered by a
Right immediately prior to such adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for an adjustment in the number of shares of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of shares of Preferred Stock of which a Right related immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i) the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths (1/1000ths) of a share
of Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per one one-thousandth (1/1000th) share and the number of
shares which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the
shares of Preferred Stock issuable upon exercise of the Rights, the Company
shall take all corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of such Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence
of such event the issuing to the holder of any Right exercised after such
record date the shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided, however, that
the Company shal1 deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in their good faith judgment the
Board of Directors of the Company shall determine to be advisable in order
that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the
Current Market Price, (iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related
transactions, assets, cash flow or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section
24 or Section 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
Section 12. Certification of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and Common Stock, a copy of such certificate
and (c) if a Distribution Date has occurred, mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 27. The
Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be deemed to have
knowledge of such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets, Cash Flow or Earning Power. In the event on or at any time after a
Stock Acquisition Date, directly or indirectly, (a) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (b) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other Person
or cash or any other property, or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), then, and in each
such case:
(A) proper provision shall be made so that (i) each holder of a
Right (except as provided in Section 7(e)) shall thereafter have the
right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable
and freely tradeable shares of common stock of the Principal Party
(as hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to
the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-thousandths (1/1000ths) of a share of
Preferred Stock for which a Right is exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such one one-thousandths
(1/1000ths) of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence),
and dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by (2) 50% of the
Current Market Price (determined pursuant to Section 11(d)(i) hereof)
per share of the common stock of such Principal Party, on the date of
consummation of such Section 13 Event; (ii) the Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section
13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event;
(iv) the Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its
common stock) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares
of its common stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be
of no effect following the first occurrence of any Section 13 Event.
(B) "Principal Party" shall mean:
(1) in the case of any transaction described in (a) or (b) of
the first sentence of this Section 13, (i) the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, or, if there
is more than one such issuer, the issuer the common stock of which
has the greatest market value or (ii) if no securities are so issued,
(x) the Person that is the other party to the merger or consolidation
and that survives said merger or consolidation or, if there is more
than one such Person, the Person the common stock of which has the
greatest market value or (y) if the Person that is the other party to
the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives);
(2) in the case of any transaction described in (c) of the
first sentence of this Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred or the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of
common stock having the greatest market value of shares outstanding;
provided, however, that in any such case, (w) if the common stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another corporation the common
stock of which is and has been so registered, "Principal Party" shall refer
to such other corporation, (x) if the common stock of such Person is not
and has not been so registered and such Person is not a direct or indirect
Subsidiary of another corporation the common stock of which is and has been
so registered, "Principal Party" shall refer to the corporation which
ultimately controls such Person, (y) in case such Person is a Subsidiary,
directly or indirectly, of more than one corporation, the common stocks of
all of which are and have been so registered, "Principal Party" shall refer
to whichever of such corporations is the issuer of the common stock having
the greatest market value of shares held by the public, and (z) in case
such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (w) - (y) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such
party were a Subsidiary of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set forth
in this Section 13 in the same ratio as their direct or indirect interests
in such Person bear to the total of such interests.
The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental
agreement making valid provision for the results described in subsections
(A) and (B) above and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the 1933 Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the 1933 Act) until the Expiration Date; and
(ii) take all such other action as may be necessary
to enable the Principal Party to issue the securities purchasable
upon exercise of the Rights, including but not limited to the
registration or qualification of such securities under all requisite
securities laws of jurisdictions of the various states and the
listing of such securities on such exchanges and trading markets as
may be necessary or appropriate; and
(iii)will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act;
provided, however, that in no case may the Company consummate any such
consolidation, merger, sale or transfer if (i) at the time of or
immediately after such transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (ii) prior to, simultaneously with or immediately
after such transaction, the shareholders of the Person who constitutes, or
would constitute, the Principal Party for purposes of Section 13 shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates. The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights which have
not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
Section 14. Fractional Rights, and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights, except prior to
the Distribution Date as provided in Section 11(p) hereof, or to distribute
Right Certificates which evidence fractional Rights. If the Company shall
determine not to issue such fractional Rights, in lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price for any day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the average of the high bid
and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights, selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of the fraction of a share for which a Right is then exercisable)
upon exercise of the Rights or to distribute certificates which evidence
fractional shares (other than fractions which are integra1 multiples of the
fraction of share for which a Right is exercisable). In lieu of fractional
shares that are not integral multiples of the fraction for which a Right is
then exercisable, the Company may pay to the registered holders of Right
Certificates at the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of a share of Preferred Stock. For purposes of this Section 14, the
current market value of a share of Preferred Stock shall be the closing
price of a share of Preferred Stock (as determined pursuant to the second
sentence of Section 11(d)) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price of one share of
Common Stock (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the
Right Certificates (and prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, any registered holder of
the Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, any
registered holder of the Common Stock), may, on his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations hereunder, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent and then if
surrendered at the principal stock transfer office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed; and
(c) subject to Sections 6(a) and 7(f), the Company and the
Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 7(e), shall be required to be affected by any
notice to the contrary.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Preferred
Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote at the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except
as provided in Section 25), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees
to pay to the Rights Agent such compensation as shall be agreed to in
writing by the Company and the Rights Agent 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 by
the Rights Agent in connection with the acceptance and administration of
this Agreement, including, without limitation, the costs and expenses of
defending against any claim (whether asserted by the Company, a holder of
Rights, or any other Person) of liability in the premises, including
reasonable attorney's fees and expenses.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it
to be genuine and to be signed and executed by the proper person or
persons.
(c) The provisions of this Section 18 shall survive the
expiration of the Rights and the termination of this Agreement.
(d) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has been advised
of the likelihood of the loss or damage and regardless of the form of the
action.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust, stock transfer or other shareholder
services business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates, either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent: and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates, either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations expressly imposed by this Agreement, and no
implied duties or obligations shall be read into this Agreement against the
Rights Agent upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of Current Market Price) be proved
or established by the Company prior to taking or suffering any action
hereunder, such act or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, any Vice
Chairman, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct; provided, however,
that the Rights Agent shall not be liable for any indirect, special,
consequential or punitive damages.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or
in the Right Certificates, or be required to verify the same (except its
countersignature thereof), but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 11, 13 or 24 or responsible for
the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after the
Right's Agent's actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred
Stock to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of Common Stock or Preferred Stack will, when so
issued, be validly authorized and issued, fully paid and nonassessable, nor
shall the Rights Agent be responsible for the legality of the terms hereof
in its capacity as an administrative agent.
(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 the Chairman of the Board, any Vice Chairman, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent under this Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in such application on
or after the date specified in such application (which date shall not be
less than ten Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities cf 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 shall
not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action
taken or omitted by it in connection with its administration of this
Agreement if such acts or omissions are in reliance upon the proper
execution of the certification concerning beneficial ownership appended to
the form of assignment and the form of election to purchase attached hereto
unless the Rights Agent shall have actual knowledge that, as executed, such
certification is untrue.
(m) The Company agrees to give the Rights Agent prompt
written notice of any event or ownership which would prohibit the exercise
or transfer of the Right Certificates.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of Common Stock and Preferred Stock by registered or
certified mail, and, if such resignation occurs after the Distribution
Date, to the registered holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of Common
Stock and Preferred Stock by registered or certified mail, and, if such
removal occurs after the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the Rights Agent or any
registered holder of any Right Certificate may, at the expense of the
Company, apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a legal business entity organized
and doing business under the laws of the United States or of a state of the
United States in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer or shareholders services powers
and which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000 or (b) an affiliate of a legal
business entity described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of Common Stock and Preferred Stock, and, if such
appointment occurs after the Distribution Date, mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price per share and in the number
or kind or class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior
to the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement,
granted or awarded as of the Distribution Date, or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption. The Board Directors may, at its option,
at any time prior to the earlier of (i) the close of business on the tenth
Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date), or (ii) the
Final Expiration Date, and as provided herein, elect to redeem all but not
less than all the then outstanding Rights at a redemption price of $.001
per Right, as such amount may be appropriately adjusted to reflect any
combination or subdivision of the outstanding Common Stock, any dividend
payable in Common Stock in respect of the outstanding Common Stock or any
other similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"). Immediately
upon the action of the Board of Directors of the Company electing to redeem
the Rights, evidence of which shall have been filed with the Rights Agent,
without any further action and without any further notice, the only right
of the holders of Rights shall be to receive the Redemption Price and such
holders shall have no right to exercise the Rights. Promptly after the
action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of
the Rights Agent, or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section 11(a)(ii) Event
until the expiration of the Company's right of redemption hereunder. The
Company may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as defined in Section
11(d)(i) hereof, of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company shall
not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Stock for or pursuant to the terms of any such plan), together with
all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number
of shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for Common Stock exchangeable for Rights, at the initial rate of
one one-thousandth (1/1000th) of a share of Preferred Stock (or Equivalent
Preferred Stock) for each share of Common Stock, as appropriately adjusted
to reflect stock splits, stock dividends and other similar transactions
after the date hereof.
(d) In the event that there shall not be sufficient shares
of Common Stock authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the
purposes of this subsection (e), the current market value of a whole share
of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events. (a) In case the Company,
at any time after the Distribution Date, shall propose (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or
to make any other distribution to the holders of Preferred Stock (other
than a regular periodic cash dividend at a rate not in excess of 130% of
the rate of the last cash dividend theretofore paid), or (ii) to offer to
the holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or a series of related transactions, of more than 50% of
the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right and to the Rights
Agent, to the extent feasible and in accordance with Section 26, a notice
of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty days prior to the
record date for determining holders of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Preferred Stock, whichever shall be
the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the Company shall
as soon as practicable thereafter give to each holder of a Rights
Certificate and to the Rights Agent, to the extent feasible and in
accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references
in the preceding paragraph to Preferred Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Norfolk Southern Corporation
Three Commercial Place
Norfolk, Virginia 23510-2191
Attention: (1) Chief Financial Officer and
(2) Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
The Bank of New York
101 Barclay Street, Floor 12 W.
New York, New York 10286
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Rights Agent.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common
Stock. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Right Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to
change or supplement the provisions hereof in any manner which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates; provided this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any
other time period, unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Notwithstanding anything herein to the contrary, this Agreement may not be
amended at a time when the Rights are not redeemable. Notwithstanding any
other provision hereof, the Rights Agent's consent must be obtained
regarding any amendment or supplement pursuant to this Section 27 which
alters the Rights Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Determinations and Actions Taken by the Board of
Directors. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or of any other class of capital stock
outstanding at any particular time, including for purposes of determining
the particular percentage of the outstanding Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) (as in effect on the date of this
Agreement) of the General Rules and Regulations under the Exchange Act. 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 (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board, or any of the directors on the Board to any liability to
the holders of the Rights.
Section 30. 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 registered holders of the Right Certificates (and,
prior to the Distribution Date, registered holders of Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth Business Day following
the date of such determination by the Board of Directors. Without limiting
the foregoing, if any provision requiring a specific group of Directors of
the Company to act is held by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall
then be made by the Board of Directors of the Company in accordance with
applicable law and the Company's Restated Articles of Incorporation and
Bylaws.
Section 32. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the Commonwealth of Virginia and for all purposes shall
be governed by and construed in accordance with the laws of such
Commonwealth applicable to contracts to be made and performed entirely
within such Commonwealth, provided, however, that the rights and
obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York. The parties hereto
hereby waive the right to a jury trial in any action arising out of this
Agreement.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first above
written.
NORFOLK SOUTHERN CORPORATION
By: /s/ David R. Goode
------------------------------------
Title: Chairman,
Chief Executive Officer and
President
THE BANK OF NEW YORK,
as Rights Agent
By: /s/ John Sivertsen
---------------------------------
Title: Vice President
Exhibit A
FORM OF
ARTICLES OF AMENDMENT
TO THE RESTATED ARTICLES OF INCORPORATION
of
NORFOLK SOUTHERN CORPORATION
I. The name of the corporation is NORFOLK SOUTHERN CORPORATION (the
"Corporation").
II. Pursuant to Section 13.1-369 of the Virginia Stock Corporation
Act and the authority conferred upon the Board of Directors by the Restated
Articles of Incorporation of the Corporation, the Restated Articles of
Incorporation of the Corporation are hereby amended to create a new series
of 600,000 shares of Preferred Stock, designated as "Series A Junior
Participating Preferred Stock" by adding the following as Section C to
Article III of such Restated Articles of Incorporation:
C. Series A Junior Participating Preferred Stock
1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 600,000.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series A
Junior Participating Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in
cash on the first day of January, April, July and October in each
year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $1.00 per share,
of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Junior Participating
Preferred Stock. In the event the Corporation shall at any time after
September 26, 2000 (the "Rights Declaration Date"), (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A
Junior Participating Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock immediately after
it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series A Junior Participating Preferred
Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be
no more than 30 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to 1000 votes on all matters
submitted to a vote of the shareholders of the Corporation. In the
event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders
of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders
of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of shareholders of the Corporation.
(i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "Default Period") that shall extend until such time
when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly
dividend period on all shares of Series A Junior Participating
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each Default Period, all
holders of Preferred Stock (including holders of the Series A
Junior Participating Preferred Stock) with dividends in arrears
in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right
to elect two (2) directors.
(ii) During any Default Period, such voting right
of the holders of Series A Junior Participating Preferred Stock
may be exercised initially at a special meeting called pursuant
to subparagraph (iii) of this Section 3(b) or at any annual
meeting of shareholders, and thereafter at annual meetings of
shareholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
directors shall be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall
be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by
the holders of Preferred Stock of such voting right. At any
meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing Default Period,
they shall have the right, voting as a class, to elect
directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2) directors or, if such
right is exercised at an annual meeting, to elect two (2)
directors. If the number that may be so elected at any special
meeting does not amount to the required number, the holders of
the Preferred Stock shall have the right to make such increase
in the number of directors as shall be necessary to permit the
election by them of the required number. After the holders of
the Preferred Stock shall have exercised their right to elect
directors in any Default Period and during the continuance of
such period, the number of directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A
Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing Default Period, have previously exercised
their right to elect directors, the Board of Directors may
order, or any shareholder or shareholders owning in the
aggregate not less than ten percent (10%) of the total number
of shares of Preferred Stock outstanding, irrespective of
series, may request, the calling of a special meeting of the
holders of Preferred Stock, which meeting shall thereupon be
called by the President, a Vice President or the Corporate
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled
to vote pursuant to this Paragraph (a)(iii) shall be given to
each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called for
a time not earlier than 20 days and not later than 60 days
after such order or request or in default of the calling of
such meeting within 60 days after such order or request, such
meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this Paragraph
(a)(iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for
the next annual meeting of the shareholders.
(iv) In any Default Period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as
a class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the Default Period, and (y)
any vacancy in the Board of Directors may (except as provided
in Paragraph (a)(iii) of this Section 3) be filled by vote of a
majority of the remaining directors theretofore elected by the
holders of the class of stock that elected the director whose
office shall have become vacant. References in this Paragraph
(a) to directors elected by the holders of a particular class
of stock shall include directors elected by such directors to
fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a Default
Period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any
directors elected by the holders of Preferred Stock as a class
shall terminate and (z) the number of directors shall be such
number as may be provided for in the Restated Articles of
Incorporation or Bylaws irrespective of any increase made
pursuant to the provisions of Paragraph (a)(i) of this Section
3 (such number being subject, however, to change thereafter in
any manner provided by law or in the Restated Articles of
Incorporation or Bylaws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining directors.
(c) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights,
and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred
Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preferred Stock,
provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Series A Junior Participating Preferred
Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking on a parity
with the Series A Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under Paragraph (a) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Series A Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series
A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1000 (as appropriately adjusted as set
forth in subparagraph (c) below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the
Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock
and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to one
with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
Preferred Stock, if any, that rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets
shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets
shall be distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1000 times
the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged. In the event the Corporation shall
at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the Outstanding Common Stock
into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of
shares of Series A Junior Participating Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
9. Ranking. The Series A Junior Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
10. Amendment. At any time when any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Articles of
Incorporation of the Corporation, as amended hereby, shall not be amended
in any manner that would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of
a majority or more of the then outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder,
in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Junior Participating
Preferred Stock.
III. The foregoing amendment was duly adopted by the Corporation's
Board of Directors on _____________. No shareholder action was
required.
Dated:________________ NORFOLK SOUTHERN CORPORATION
By:
--------------------------
Chairman of the Board
ATTEST:
----------------------
Corporate Secretary
Exhibit B
Form of Right Certificate
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 26, 2010 UNLESS EXTENDED PRIOR
THERETO BY THE BOARD OF DIRECTORS OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.](1)
------------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
RIGHT CERTIFICATE
NORFOLK SOUTHERN CORPORATION
This certifies that ________________________________ , or
registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of
September 26, 2000 (the "Rights Agreement"), between Norfolk Southern
Corporation, a Virginia corporation (the "Company"), and The Bank of New
York, a New York banking corporation (the "Rights Agent"), to purchase from
the Company, at any time prior to 5:00 P.M. (Virginia time) on September
26, 2010 (unless such time is extended prior thereto by the Board of
Directors) at the principal stock transfer office of the Rights Agent, or
its successor as Rights Agent, one one-thousandth (1/1000) of a fully paid
and nonassessable share of the Series A Participating Preferred Stock of
the Company ("Preferred Stock"), at a purchase price of $85 per one
one-thousandth (1/1000) of a share (the "Purchase Price") upon presentation
and surrender of this Right Certificate with the Form of Election to
Purchase and related Certificate duly executed. The number of Rights
evidenced by this Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price
per one one-thousandth (1/1000th) of a share set forth above, are the
number and Purchase Price as of October 16, 2000 based on the shares of
Preferred Stock of the Company as constituted at such date. The Company
reserves the right to require prior to the occurrence of a Triggering Event
(as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities which may
be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and
at the principal office of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase such number of shares of Preferred Stock as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.001 per Right at any time prior to the earlier
of the close of business on (i) the tenth Business Day following the Stock
Acquisition Date, and (ii) the Final Expiration Date (as such terms are
defined in the Rights Agreement). In addition, under certain circumstances
following the Stock Acquisition Date, the Rights may be exchanged, in whole
or in part, for shares of the Common Stock, or shares of preferred stock of
the Company having essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further action or
any notice, the Rights (other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable holders to receive
the shares issuable upon such exchange.
No fractional shares of Preferred Stock (other than fractions
which are integral multiples of the fraction of a share for which a Right
is then exercisable) will be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof a cash payment shall be made,
as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
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 consent to or withhold consent from 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 Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory
of the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Attest: NORFOLK SOUTHERN CORPORATION
By:
------------------------------ ------------------------------
Secretary Title:
Countersigned:
THE BANK OF NEW YORK
By:
---------------------------
Authorized Signatory
Date:
-------------------------
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________________
hereby sells, assigns and transfers unto __________________________________
___________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _______________
Attorney to transfer the within Right Certificate on the books of the
within-named Rights Agent, with full power of substitution.
Dated: ___________, ____ ____________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ___________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To Norfolk Southern Corporation:
The undersigned hereby irrevocably elects to exercise _________
Rights represented by this Right Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares
be issued in the name of and delivered to:
Please insert social security
or other identifying number
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
If such number of rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
Dated: _________, ____ ________________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _________, ____ ____________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On September 26, 2000 (the "Rights Authorization Date"), the
Board of Directors of Norfolk Southern Corporation (the "Company")
authorized an issuance of one Right for each share of Common Stock, par
value $1.00 per share, of the Company ("Common Stock"). The distribution is
payable to the shareholders of record at the close of business on October
16, 2000. Each Right entitles the registered holder to purchase from the
Company one one-thousandth (1/1000) of a share of a series of the Company's
preferred stock designated as Series A Junior Participating Preferred Stock
("Preferred Stock") at a price of $85 per one one-thousandth (1/1000) of a
share (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and The Bank of New York as Rights Agent
(the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified
in the Rights Agreement, the Rights will separate from the Common Stock and
a Distribution Date will occur upon the earlier of (i) 10 business days (or
such later date as the Board shall determine) following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), other
than as a result of repurchases of stock by the Company or (ii) 10 business
days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a
person or group becoming an Acquiring Person. Until the Distribution Date,
(i) the Rights will be evidenced by the Common Stock certificates and will
be transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates issued after the Record Date will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. Pursuant to the Rights Agreement,
the Company reserves the right to require prior to the occurrence of a
Triggering Event (as defined below) that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock
will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. (Virginia time) on September 26, 2010 (the
"Expiration Date"), unless such date is extended or the Rights are earlier
redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors or as provided in the Rights
Agreement, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the exercise
price of the Right. Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth
above until such time as the Rights are no longer redeemable by the Company
as set forth below.
For example, at an exercise price of $100 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $200 worth of Common Stock (or other consideration, as noted
above) for $100. Assuming that the Common Stock had a per share value of
$20 at such time, the holder of each valid Right would be entitled to
purchase 10 shares of Common Stock for an aggregate of $100.
In the event that, on or at any time after a Stock Acquisition
Date, the Company (i) engages in a merger or other business combination
transaction (in which the Company is not the surviving corporation, (ii)
the Company engages in a merger or other business combination transaction
in which the Company is the surviving corporation and any shares of the
Company's Common Stock are changed into or exchanged for other securities
or assets or (iii) 50% or more of the assets, cash flow or earning power of
the Company and its subsidiaries (taken as a whole) are sold or
transferred, each holder of a Right (except as noted below) shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock
of the acquiring company which at the time of such transaction would have a
market value (determined as provided in the Rights Agreement) of two times
the exercise price of the Right. The events set forth in this paragraph and
in the second preceding paragraph are referred to as the "Triggering
Events."
Up to and including the tenth business day after a Stock
Acquisition Date, the Company may redeem the rights in whole, but not in
part, at a price of $.001 per Right, (payable in cash, Common Stock or
other consideration deemed appropriate by the Board of Directors). Promptly
upon the action of the Board of Directors of the Company electing to redeem
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.001 Redemption Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or
more of the outstanding Common Stock, the Board may exchange the Rights
(other than Rights owned by such person or group which have become void),
in whole or in part, for Common Stock at an exchange ratio of one share of
Common Stock, for one one-thousandth (1/1000th) of a share of Preferred
Stock (or of a share of a class or series of the Company's preferred stock
having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to shareholders or to the
Company, shareholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company or in the event of the redemption of the Rights as set
forth above.
Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights, or to shorten
or lengthen any time period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as the Rights are
not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated September 26, 2000 and a Current Report on
Form 8-K dated September 26, 2000. A copy of the Rights Agreement is
available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
