SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN
CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934
FIRST FINANCIAL CORPORATION
(Exact Name of registrant as specified in charter)
INDIANA 35-1546989
(State of Incorporation (I.R.S. Employer
or organization) Identification Number)
One First Financial Plaza
Terre Haute, Indiana 47807
(Address of principal executive offices, including zip code)
Copy to:
CLAUDIA V. SWHIER, ESQ.
Barnes & Thornburg
1313 Merchants Bank Building
11 South Meridian Street
Indianapolis, Indiana 46204
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON SHARE PURCHASE RIGHTS
(Title of class)
<PAGE>
INFORMATION REQUIRED IN
REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
The Board of Directors of First Financial Corporation (the "Company")
has declared a dividend of one common share purchase right (a "Right" or
"Rights") for each outstanding share of common stock, without par value (the
"Common Shares"), of the Company. The dividend is payable to the shareholders of
record as of January 20, 1997 (the "Record Date"). If and when the Rights become
exercisable, each Right will entitle the registered holder to purchase from the
Company one Common Share at a purchase price of $95.00 (the "Purchase Price"),
subject to adjustment as described below. The Rights will be represented by the
outstanding Common Share certificates and the Rights cannot be bought, sold or
otherwise traded separately from the Common Shares until the "Distribution
Date," which is the earliest to occur of (i) 10 calendar days following a public
announcement that a person or group (an "Acquiring Person") has (a) acquired
beneficial ownership of 12% or more of the outstanding Common Shares or, in the
case of any beneficial owner of 12% of the Common Shares on the Record Date,
additional shares representing 10% of the outstanding Common Shares, or (b)
become the beneficial owner of an amount of the outstanding Common Shares (but
not less than 10%) which the Board of Directors determines to be substantial and
which ownership the Board of Directors determines is intended or may be
reasonably anticipated, in general, to cause the Company to take actions
determined by the Board of Directors to be not in the Company's best long-term
interests (an "Adverse Person"), or (ii) 10 business days following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in the beneficial ownership by a
person or group of 30% or more of such outstanding Common Shares.
Until the Distribution Date (or earlier exchange, redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and, thereafter, such separate Right Certificates alone will
evidence the Rights.
The holders of the Rights are not required to take any action until the
Rights become exercisable. As described above, the Rights are not exercisable
until the Distribution Date. The Rights will expire on January 6, 2007 (the
"Final Expiration Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed by the Company, in each case, as described
below.
The Purchase Price payable and the number of Common Shares, or other
securities or property, issuable upon exercise of the Rights are subject to
adjustment from time to time (1) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common
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Shares, (2) upon the grant to holders of the Common Shares of certain rights or
warrants to subscribe for or purchase Common Shares at a price, or securities
convertible into Common Shares with a conversion price, less than the then
current market price of Common Shares, or (3) upon the distribution to holders
of the Common Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Common Shares) or of subscription rights or warrants, other than
those referred to above. With certain exceptions, the Company is not required to
adjust the Purchase Price until cumulative adjustments require a change of at
least 1% in the Purchase Price. No fractional Common Shares will be issued and,
in lieu thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading day prior to the date of exercise.
In the event that (1) the Company is acquired in a merger or other
business combination transaction and the Company is not the surviving
corporation, or (2) any person consolidates or merges with the Company and all
or part of the Company's Common Shares are exchanged for securities, cash or
property of any other person, or (3) 50% or more of the Company's consolidated
assets or earning power are sold (collectively, "Flip-Over Events"), proper
provision will be made so that each holder of a Right will 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 will have a market value of two times the
exercise price of the Right. In the event that (1) an Acquiring Person engages
in certain self-dealing transactions, or (2) a person is declared an Adverse
Person by the Board of Directors of the Company, or (3) a person acquires 15% or
more of the outstanding Common Shares (other than certain persons who are
beneficial owners of 12% or more of the Company's Common Shares on the Record
Date who acquire no more than an additional 10% of the Company's outstanding
Common Shares) (collectively, "Flip-In Events"), proper provision shall be made
so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a market value of
two times the exercise price of the Right.
At any time after a person becomes an Acquiring Person, and prior to
the acquisition by such Acquiring Person of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share per Right, subject to
adjustment.
At any time prior to the tenth calendar day following the date of a
public announcement that a person or group has become an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
If the Board of Directors' ability to redeem the Rights pursuant to the
Rights Agreement has expired because a person or group has become an Acquiring
Person, but a Flip-Over Event or certain Flip-In Events have not yet occurred,
the redemption right will be reinstated if the Acquiring Person
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disposes of a sufficient number of the Company's Common Shares so that such
person then owns only 10% or less of the outstanding Company's Common Shares and
if certain other conditions are met.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights.
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.
As of January 6, 1997, there were 6,681,879 Common Shares issued and
outstanding. One Right will be distributed to shareholders of the Company for
each Common Share owned of record by them on the Record Date. As long as the
Rights are attached to the Common Shares, the Company will issue one Right with
each Common Share that shall become outstanding so that all Common Shares will
have attached Rights. The Company has initially reserved 3,318,121 Common Shares
for issuance upon exercise of Rights.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors of the Company, except pursuant
to an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be redeemed by the
Company at $.01 per Right prior to the time that a person or group has acquired
beneficial ownership of 12% or more of the Common Shares.
The form of Rights Agreement between the Company and Terre Haute First
National Bank(the "Rights Agent") specifying the terms of the Rights, which
includes as Exhibit A the form of Rights Certificate, is attached hereto as
Exhibit 2 and is incorporated herein by reference. The foregoing description of
Rights is qualified by reference to such exhibit.
Item 2. Exhibits.
The exhibits filed herewith or incorporated by reference herein are
listed on the Exhibit Index at page 6 of this Form 8-A.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
filed on its behalf by the undersigned, thereto duly authorized.
FIRST FINANCIAL CORPORATION
By:/s/ Donald E. Smith
-------------------------------
Donald E. Smith,
Chairman and President
Dated: January 6, 1997
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EXHIBIT LIST
II. Exhibits filed with the Commission.
Number Assigned
in Form 8-A Description of Exhibit
1 Form of Rights Certificate, incorporated by reference
to Exhibit A of the Rights Agreement, dated as of
January 6, 1997, between Registrant and Terre Haute
First National Bank, as Rights Agent, filed herewith
as Exhibit 2. Pursuant to the Rights Agreement,
Rights Certificates will not be mailed until as soon
as practicable after the Distribution Date.
2 Rights Agreement, dated as of January 6, 1997,
between Registrant and Terre Haute First National
Bank, as Rights Agent.
6
FIRST FINANCIAL CORPORATION
and
TERRE HAUTE FIRST NATIONAL BANK
Rights Agent
RIGHTS AGREEMENT
Dated as of January 6, 1997
<PAGE>
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...................................9
Section 5. Countersignature and Registration............................9
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates...............................10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights...............................11
Section 8. Cancellation and Destruction of Right Certificates..........13
Section 9. Availability of Common Shares...............................13
Section 10. Common Shares Record Date...................................15
Section 11. Adjustment of Purchase Price,
Number of Shares or Number of Rights....................16
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares...............................29
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.....................30
Section 14. Fractional Rights and Fractional Shares.....................33
Section 15. Rights of Action............................................34
Section 16. Agreement of Right Holders..................................35
Section 17. Right Certificate Holder Not Deemed a Shareholder...........36
Section 18. Concerning the Rights Agent.................................36
Section 19. Merger or Consolidation or
Change of Name of Rights Agent..........................37
Section 20. Duties of Rights Agent......................................38
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Section 21. Change of Rights Agent......................................41
Section 22. Issuance of New Right Certificates..........................42
Section 23. Redemption..................................................43
Section 24. Exchange....................................................45
Section 25. Notice of Certain Events....................................47
Section 26. Notices.....................................................48
Section 27. Supplements and Amendments..................................48
Section 28. Successors..................................................50
Section 29. Benefits of this Agreement..................................50
Section 30. Severability................................................50
Section 31. Governing Law...............................................50
Section 32. Counterparts................................................50
Section 33. Descriptive Headings........................................50
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RIGHTS AGREEMENT
This AGREEMENT, dated as of January 6, 1997, between First Financial
Corporation, an Indiana corporation (the "Corporation"), and Terre Haute First
National Bank, a national banking association (the "Rights Agent").
WHEREAS, the Board of Directors of the Corporation has authorized and
declared a dividend distribution of one Common Share Purchase Right (hereinafter
referred to as a "Right") for each Common Share (as hereinafter defined) of the
Corporation outstanding and held of record as of the Close of Business (as
hereinafter defined) on January 20, 1997 (the "Record Date"), each Right
representing the right to purchase one Common Share upon the terms and subject
to the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person (other than the
Corporation or any Related Person), who or which, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 12% or more of
the Common Shares then outstanding, or (ii) any Adverse Person; provided,
however, that a Person shall not be deemed to have become an Acquiring Person
solely as a result of a reduction in the number of Common Shares outstanding,
unless subsequent to such reduction such Person or any Affiliate or Associate of
such Person shall become the Beneficial
<PAGE>
Owner of any additional Common Shares other than as a result of a stock
dividend, stock split or similar transaction effected by the Corporation in
which all shareholders are treated equally; provided, further, that a Person
shall not be deemed to be an Acquiring Person solely by virtue of being a
Beneficial Owner of 12% or more of the Common Shares outstanding on the Record
Date unless subsequent to the Record Date such Person shall become the
Beneficial Owner of additional Common Shares representing at least 10% of the
Common Shares outstanding (other than as a result of a stock dividend, stock
split or similar transaction effected by the Corporation in which all
shareholders are treated equally).
(b) "Adverse Person" shall mean any Person declared to be an Adverse
Person by the Board of Directors upon (i) a determination by the Board of
Directors, at any time after the date of this Agreement, that such Person, alone
or together with its Affiliates and Associates (as such terms are hereinafter
defined), has become, or has announced an intention to become, in one or more
transactions, the Beneficial Owner (as such term is hereinafter defined) of a
number of Common Shares which the Board of Directors determines to be
substantial (which amount shall in no event be less than 10% of the Common
Shares then outstanding) and (ii) a determination by at least a majority of the
Board of Directors who are not officers of the Corporation, after reasonable
inquiry and investigation, including consultation with such persons as such
directors shall deem appropriate, that (A) such Beneficial Ownership by such
Person (1) is intended to cause the Corporation to repurchase the Common Shares
beneficially owned by such Person, (2) is intended or may reasonably be
anticipated to cause pressure on the Corporation to take action or enter into a
transaction or series of transactions to provide such Person with short-term
financial gain under circumstances in which the Board of Directors determines
that the best long-term interests of the Corporation and its shareholders would
not be served by taking such action or entering into such
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transactions or series of transactions at that time, or (3) is intended or may
reasonably be anticipated to permit such Person to acquire control of or a
controlling influence over the Corporation, as a result of such Beneficial
Ownership or one or more subsequent actions or transactions, in a manner or
pursuant to one or more actions or transactions that the Board determines to be
unfair or coercive to shareholders, or (B) such Beneficial Ownership is causing
or may reasonably be anticipated to cause a material adverse impact on the
business, financial condition or prospects of the Corporation (including,
without limitation, the Corporation's ability to maintain its competitive
position).
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(d) 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 (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than
these 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
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Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote or dispose of
pursuant to any agreement, arrangement or understanding; 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 (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(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 (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(d)(ii)(B)) or disposing of any securities of the Corporation;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if such beneficial
ownership arises solely as a result of such Person's status as a
"clearing agency," as defined in Section 3(a)(23) of the Exchange Act.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used
with reference to a Person's Beneficial Ownership of securities of the
Corporation, shall mean the number of such
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securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of Indiana are authorized or
obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M., eastern
standard time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., eastern standard time, on the next
succeeding Business Day.
(g) "Common Shares" when used with reference to the Corporation shall
mean the shares of common stock, without par value, of the Corporation;
provided, however, that if the Corporation is the continuing or surviving
corporation in a transaction described in Section 11(a)(ii) or Section 13(b),
"Common Shares" when used with reference to the "Corporation" shall mean the
capital stock or equity security with the greatest aggregate voting power of the
Corporation. "Common Shares" when used with reference to any Person other than
the Corporation (including an Issuer as defined in Section 13) shall mean the
capital stock or equity security with the greatest voting power of such other
Person.
(h) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the tenth calendar day after the Share Acquisition Date or (ii) the
Close of Business on the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
becomes an Acquiring Person) after the date of the commencement by any Person
(other than the Corporation or any Related Person), or of the first public
announcement of the intention of any Person (other than the Corporation or any
Related Person), to commence a tender or exchange
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offer, the consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 30% or more of the then
outstanding Common Shares (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights).
(i) "Final Expiration Date" shall have the meaning set forth in Section
7.
(j) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(k) "Purchase Price" shall have the meaning set forth in Section 7.
(l) "Redemption Date" shall have the meaning set forth in Section 7.
(m) "Related Person" shall mean (i) any Subsidiary of the Corporation,
(ii) any employee benefit or stock ownership plan of the Corporation or any
entity holding Common Shares for or pursuant to the terms of any such plan, or
(iii) any Person who acquires Common Shares from the Corporation or any other
Related Person in one or a series of related transactions, each of which is
approved by the Board of Directors; provided, however, that if any Person who
becomes a Related Person solely by virtue of subsection (iii) above, or any
Affiliate or Associate of such Person subsequently becomes the Beneficial Owner
of any additional Common Shares in a transaction or transactions not approved by
the Board of Directors, such Person shall no longer be deemed a "Related Person"
with respect to all Common Shares of which it, or any of its Affiliates or
Associates, is the Beneficial Owner.
(n) "Share Acquisition Date" shall mean the first date of public
announcement by the Corporation or an Acquiring Person that an Acquiring Person
has become such.
(o) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
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Section 2. Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation and the holders of the
Rights (who, in accordance with Section 3, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Section 3(b)) by the certificates for Common
Shares registered in the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate Right Certificates,
and (ii) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Corporation will prepare and execute, the Rights Agent
will countersign, and the Corporation will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Corporation, a Right Certificate, in substantially the form of Exhibit A hereto
(a "Right Certificate"), evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates or brokers' due bills.
(b) On the Record Date, or as soon as practicable thereafter, the
Corporation will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form of Exhibit B hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown
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on the records of the Corporation. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
First Financial Corporation and Terre Haute First National
Bank, dated as of January 6, 1997 (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 First Financial 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. First Financial
Corporation will mail to the holder of this certificate a copy
of the Rights Agreement without charge after receipt of a
written request therefor. As described in the Rights
Agreement, Rights issued to any Person who becomes an
Acquiring Person (as defined in the Rights Agreement) shall
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares 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 Shares represented thereby. In
the event that the
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Corporation purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Corporation shall not be
entitled to exercise any Rights associated with the Common Shares which are no
longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities or stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22, the Right Certificates shall entitle
the holders thereof to purchase such number of Common Shares as shall be set
forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Corporation by its Chairman of the Board, its
President, any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Corporation's seal or a
facsimile thereof, and shall be attested by the Secretary or any Assistant
Secretary of the Corporation, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer of the
Corporation who shall have signed any of the Right Certificates shall cease to
be such officer of the Corporation before countersignature by the Rights Agent
and issuance and
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delivery by the Corporation, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Corporation
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Corporation; and any Right
Certificate may be signed on behalf of the Corporation by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Corporation to sign such Right Certificate, although at the date
of the execution of this Rights Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of 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 earlier of
the Redemption Date or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that have become
void pursuant to Section 11(a)(ii) or that have been exchanged pursuant to
Section 24) may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of Common Shares as the Right Certificate or Right
Certificates surrendered then entitled each holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates
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to be transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Thereupon, the Rights Agent shall countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Corporation may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Corporation 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, at the Corporation's request,
reimbursement to the Corporation 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 Corporation will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for each Common
Share as to which the Rights are exercised, at or prior to the earliest of (i)
the close of business on January 6, 2007 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as provided in
Section 24.
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(b) The "Purchase Price" for each Common Share pursuant to the exercise
of a Right shall initially be $95.00, shall be subject to adjustment from time
to time as provided in Sections 11 and 13 and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 by certified check, cashier's check or
money order payable to the order of the Corporation, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Common
Shares certificates for the number of Common Shares to be purchased and the
Corporation hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from the depositary agent depositary receipts
representing such number of Common Shares as are to be purchased (in which case
certificates for the Common Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Corporation
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Corporation the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or, upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(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
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remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14.
(e) The Corporation covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Common Shares the
number of Common Shares that will be sufficient to permit the exercise in full
of all outstanding Rights in accordance with this Section 7.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation 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 any of the provisions of this Rights Agreement. The Corporation 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
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, provide the Corporation with a microfiche
copy thereof and destroy such cancelled Right Certificates, and deliver a
certificate of destruction thereof to the Corporation.
Section 9. Availability of Common Shares.
(a) If the Common Shares issuable and deliverable upon the exercise of
Rights become listed on any national securities exchange, the Corporation shall
use its reasonable best efforts to cause, from and after such time as the Rights
become exercisable, all Common Shares reserved for issuance to be listed on such
exchange upon official notice of issuance upon such exercise. If the Common
Shares issuable and deliverable upon the exercise of Rights are listed on the
NASDAQ
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Stock Market, the Corporation shall use its reasonable best efforts to file any
notice relating to the issuance of additional Common Shares with the National
Association of Securities Dealers, Inc. (the "NASDAQ") required from and after
such time as the Rights become exercisable.
(b) The Corporation shall use its reasonable best efforts to (i) file,
as soon as practicable following the later to occur of an event described in
Section 11(a)(ii) or Section 13 or the Distribution Date, a registration
statement under the Securities Act of 1933, as amended (the "Act"), with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the earlier of the Final Expiration
Date or the Redemption Date. The Corporation 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;
provided, however, that the Corporation may temporarily suspend the
exercisability of the Rights to prepare and file such registration statement and
permit it to become effective and upon any such suspension, the Corporation
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any such provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
(c) The Corporation covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of
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delivery of the certificates for such Common Shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Corporation further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Common Shares upon the exercise of Rights. The Corporation shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Common
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Common Shares 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 Corporation's reasonable satisfaction that no such
tax is due.
Section 10. Common Shares Record Date. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common Shares
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
Common Shares transfer books of the Corporation are closed, such person shall be
deemed to have become the record holder on such succeeding Business Day on which
the Common Shares transfer books of the Corporation 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 holder of Common Shares for which the
Rights shall be exercisable,
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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 Corporation, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Common 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 Corporation shall at any time after
the date of this Agreement (A) declare a dividend on the Common Shares
payable in Common Shares, (B) subdivide the outstanding Common Shares,
(C) combine the outstanding Common Shares into a smaller number of
Common Shares or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which
the Corporation is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall
be proportionately adjusted (without duplicating the effect of Section
11(n)) so that the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior
to such date and at a time when the Common Shares transfer books of the
Corporation were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event
shall the consideration to be paid
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upon the exercise of one Right be less than the aggregate par value, if
any, of the shares of capital stock of the Corporation issuable upon
exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event
that
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, shall (1) merge
into the Corporation or otherwise combine with the Corporation
and the Corporation shall be the continuing or surviving
corporation of such merger or combination (other than in a
transaction subject to Section 13), (2) merge or otherwise
combine with any Subsidiary of the Corporation, (3) in one or
more transactions (other than in connection with the exercise
of Rights or the exercise or conversion of securities
exercisable or convertible into capital stock of the
Corporation or any of its Subsidiaries) transfer any assets to
the Corporation or any of its Subsidiaries in exchange (in
whole or in part) for shares of any class of capital stock of
the Corporation or any of its Subsidiaries or for securities
exercisable for or convertible into shares of any class of
capital stock of the Corporation or of any of its
Subsidiaries, or otherwise obtain from the Corporation or any
of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the
Corporation or any of its Subsidiaries or securities
exercisable for or convertible into shares of any class of
capital stock of the Corporation or any of its Subsidiaries
(other than as part of a
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pro rata distribution to all holders of such shares of any
class of capital stock of the Corporation, or any of its
Subsidiaries), (4) sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one or more
transactions) of any assets (including securities) to, from,
with or of, as the case may be, the Corporation or any of its
Subsidiaries (other than in a transaction subject to Section
13), (5) receive any compensation from the Corporation or any
of its Subsidiaries other than compensation as a director or
for full-time employment as a regular employee, in either
case, at rates in accordance with the Corporation's (or its
Subsidiaries') past practices, or (6) receive the benefit,
directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Corporation or any of its
Subsidiaries, or
(B) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including
any reverse stock split), or recapitalization or
reorganization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries
or any other transaction or series of transactions involving
the Corporation or any of its Subsidiaries (whether or not
with or into or otherwise involving an Acquiring Person),
other than a transaction subject to Section 13, which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of
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the outstanding shares of any class of equity securities of
the Corporation or any of its Subsidiaries beneficially owned
by any Acquiring Person or any Affiliate or Associate thereof,
or
(C) any Person (other than the Corporation or any
Related Person) who or which, together with all Affiliates and
Associates of such Person, shall at any time after the date of
this Agreement, become the Beneficial Owner of 15% or more of
the Common Shares then outstanding (other than pursuant to any
transaction set forth in Section 13); provided, however, that
a Person shall not be deemed to have become the Beneficial
Owner of 15% or more of the Common Shares then outstanding for
the purposes of this Section 11(a)(ii)(C) solely as a result
of a reduction in the number of Common Shares outstanding,
unless subsequent to such reduction such Person or any
Affiliate or Associate of such Person shall become the
Beneficial Owner of any additional Common Shares; and
provided, further, that any Person who is the Beneficial Owner
of 12% or more of the Common Shares outstanding on the Record
Date may become the Beneficial Owner of additional Common
Shares representing at least 10% of the Common Shares
outstanding (other than as a result of a stock dividend, stock
split or similar transaction effected by the Corporation in
which all shareholders are treated equally) without triggering
this provision, or
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(D) any Person is declared to be an Adverse Person by
the Board of Directors,
then each holder of a Right shall thereafter have a right to receive, upon
exercise thereof in accordance with the terms of this Agreement and in lieu of
the number of Common Shares for which the Right is then exercisable, such number
of Common Shares of the Corporation as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable and dividing that product by (y) 50% of the
then current per share market price of the Corporation's Common Shares
(determined pursuant to Section 11(d) on the date such Person became an
Acquiring Person). In the event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Corporation shall not take any
action which would eliminate or diminish the benefits intended to be afforded by
the Rights.
From and after the occurrence of the earlier of the events described in
clauses (A), (B), (C) and (D) above, any Rights that are or were acquired or
beneficially owned by such Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) shall be void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof shall be cancelled.
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(iii) In the event that there shall not be sufficient Common
Shares authorized and unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the
Corporation shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights.
However, if the Corporation is unable to cause the authorization of
additional Common Shares within 90 calendar days after the occurrence
of an event in Section 11(a)(ii), then, notwithstanding anything in
this Agreement to the contrary, the Corporation shall determine the
excess of the value of the Common Shares issuable upon the exercise of
a Right over the Purchase Price (such excess being hereinafter referred
to as the "Spread") and shall be obligated to deliver, upon the
surrender of such Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and cash (to the extent
permitted by applicable law and any agreements or instruments to which
the Corporation is a party in effect immediately prior to the first
occurrence of an event in Section 11(a)(ii)) in an amount equal to the
Spread. To the extent that any legal or contractual restrictions
prevent the Corporation from paying the full amount of cash payable in
accordance with the foregoing sentence, the Corporation shall pay to
holders of the Rights as to which such payments are payable all amounts
which are not then restricted on a pro rata basis and shall continue to
make payments on a pro rata basis as funds become available until the
full amount due to each such Right holder has been paid.
(b) In case the Corporation shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them (for
a period expiring within 45 calendar
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days after such record date) to subscribe for or purchase Common Shares (or
shares having the same rights, privileges and preferences as the Common Shares
("equivalent common shares")) or securities convertible into Common Shares or
equivalent common shares at a price per Common Share or equivalent common share
(or having a conversion price per share, if a security convertible into Common
Shares or equivalent common shares) less than the then current per share market
price of the Common Shares (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, the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares and/or equivalent
common shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional Common Shares
and/or equivalent common shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value, if
any, of the shares of capital stock of the Corporation issuable upon exercise of
one Right. In case such subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Corporation, whose determination shall be described in a statement filed
with the Rights Agent. Common Shares owned by or held for the account of the
Corporation 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, options or
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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 Corporation shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants (excluding
those referred to in Section 11(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, the numerator of which
shall be the then current per share market price of the Common Shares on such
record date less the fair market value (as determined in good faith by the Board
of Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value, if any, of the shares of capital stock of the
Corporation to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall 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, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share
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of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however,
that in the event that the current per share market price of the
Security is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination of
reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. 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
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use, or, if on any such date the Security is not
quoted by any such
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organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Corporation. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Common Shares are not publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Corporation,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a
Common Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Corporation
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other than Common Shares, 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 Common Shares contained in Section 11(a) through
(c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect to
the Common Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Common Shares (calculated to the nearest one ten-thousandth of a Common Share)
obtained by (i) multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Corporation may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of Common Shares 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 Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to
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such adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Corporation 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
Corporation 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
Corporation, 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
Corporation, 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 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 Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
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(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Common Shares
issuable upon exercise of the Rights, the Corporation shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable Common
Shares 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 Corporation may elect to defer, until the occurrence of
such event, issuing to the holder of any Right exercised after such record date
the Common Shares and other capital stock or securities of the Corporation, if
any, issuable upon such exercise over and above the Common Shares and other
capital stock or securities of the Corporation, if any, issuable on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Corporation shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Corporation 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 it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Common Shares, (ii)
issuance wholly for cash or any Common Shares at less than the current market
price, (iii) issuance wholly for cash or Common Shares or securities which by
their terms are convertible into or exchangeable for Common Shares, (iv)
dividends on Common Shares payable in Common Shares, or (v) issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Corporation to holders of its Common Shares shall not be taxable to such
shareholders.
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(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Corporation shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (y) the
number of Common Shares purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of Common Shares so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (z) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, the
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25. The Rights Agent
shall be fully protected in relying on such certificate and shall not be deemed
to have knowledge of any adjustment unless and until it shall have received such
certificate.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, (a) the Corporation shall
consolidate with, or merge with and into, any other Person, (b) any Person shall
consolidate with the Corporation, or merge with and into the Corporation and the
Corporation shall be the continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or consolidation, all or part
of the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Corporation) or cash or any other
property, or (c) the Corporation shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including without limitation securities
creating any obligation on the part of the Corporation and/or any of its
Subsidiaries) aggregating 50% or more of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any other Person other
than the Corporation or one or more of its wholly-owned Subsidiaries, then, and
in each such case, proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of this
Agreement and in lieu of Common Shares of the Corporation, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
Common Shares of such other Person (including the Corporation as successor
thereto or as the surviving corporation), free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or
first refusal, as shall be equal to the result obtained by (A) multiplying the
then current Purchase Price by the number of Common Shares for which a Right is
then exercisable (without taking into account any adjustment previously made
pursuant to Section 11(a)(ii)) and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 11(d)) on the date of consummation of such
consolidation, merger, sale or
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transfer; (ii) the Issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Corporation pursuant to this Agreement; (iii)
the term "Corporation" shall thereafter be deemed to refer to such Issuer; and
(iv) such Issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) 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
Common Shares thereafter deliverable upon the exercise of the Rights. For
purposes of this Section 13, "Issuer" shall mean (x) in the case of any event
described in Sections 13(a) or (b) above, the Person that is the continuing,
surviving, resulting or acquiring Person (including the Corporation as the
continuing or surviving corporation of a transaction described in Section 13(b)
above), and (y) in the case of any event described in Section 13(c) above, the
Person that is the party receiving the greatest portion of the assets or earning
power (including without limitation securities creating any obligation on the
part of the Corporation and/or any of its Subsidiaries) transferred pursuant to
such transaction or transactions; provided,however, that, in any such case, (A)
if (1) no class of equity security of such Person is, at the time of such
merger, consolidation or transaction and has been continuously over the
preceding 12-month period, registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, and (2) such Person is a Subsidiary, directly
or indirectly, of another Person, a class of equity security of which is and has
been so registered, the term "Issuer" shall mean such other Person; and (B), in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are and have been so
registered, the term "Issuer" shall mean whichever of such Persons is the issuer
of the equity security having the greatest aggregate market value.
Notwithstanding the foregoing, if the Issuer in any of the events listed above
is not a corporation or
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other legal entity having outstanding equity securities, then, and in each such
case, (i) if the Issuer is directly or indirectly wholly owned by a corporation
or other legal entity having outstanding equity securities, then all references
to Common Shares of the Issuer shall be deemed to be references to the Common
Shares of the corporation or other legal entity having outstanding equity
securities which ultimately controls the Issuer, and (ii) if there is no such
corporation or other legal entity having outstanding equity securities, (Y)
proper provision shall be made so that the Issuer shall create or otherwise make
available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a type or types of security or securities having a fair
market value at least equal to the economic value of the Common Shares which
each holder of a Right would have been entitled to receive if the Issuer had
been a corporation or other legal entity having outstanding equity securities;
and (Z) all other provisions of this Agreement shall apply to the issuer of such
securities as if such securities were Common Shares. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated above) which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior to such consummation the Corporation and such Issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in this Section 13 and further providing that
as soon as practicable after the consummation of any such consolidation, merger,
sale or transfer, the Issuer will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, 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
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effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of the Expiration Date or the Redemption
Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act.
The Corporation shall not enter into any transaction of the kind referred to in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For 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
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York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Corporation. 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
Corporation shall be used.
(b) The Corporation shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Corporation
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share. For the purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to Section 11(d)) for
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective
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registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered holder of
any Right Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Corporation 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
shall be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation 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 the Common Shares:
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Corporation 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 Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
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notations of ownership or writing on the Right Certificates or the associated
Common Shares certificate made by anyone other than the Corporation or the
Rights Agent) for all purposes whatsoever, and neither the Corporation nor the
Rights Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares, or any
other securities of the Corporation 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 Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), 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. The Corporation agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred, in the
absence of negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights
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Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in
the premises.
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 the Common Shares or for other securities of the Corporation,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
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 stock transfer or
corporate trust 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
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such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Corporation), 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 be
proved or established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Secretary or the Treasurer of the Corporation
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken
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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 to the Corporation and
any other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Corporation 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 Corporation of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii)) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice that
such change or adjustment is required); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Common Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
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(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Corporation, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered 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 Corporation 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 Rights 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 any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any such officer of the Corporation actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with
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or lend money to the Corporation 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 Corporation 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 Corporation resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
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 Corporation and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Corporation may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the Corporation
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 Corporation, then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights
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Agent, whether appointed by the Corporation or by such a court, shall be (i) a
corporation organized and doing business under the laws of the United States (or
of any other state of the United States so long as such corporation is
authorized to do business as a banking institution), in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 million or (ii) a subsidiary of a corporation described
in clause (i) 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 Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Corporation 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 and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
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Section 23. Redemption.
(a) The Board of Directors of the Corporation may, at its option, at
any time prior to the earlier of (i) the Final Expiration Date and (ii) the
tenth calendar day following the Share Acquisition Date (or, if the Share
Acquisition Date shall have occurred prior to the Record Date, the Close of
Business on the tenth calendar day following the Record Date), or such later
date as may be specified by a majority of the Board of Directors, redeem all but
not less than all the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board of Directors may be made effective at such time on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
(b) If following the occurrence of a Share Acquisition Date and
following the expiration of the right of redemption hereunder but prior to the
occurrence of an event described in Sections (A), (B), (C) or (D) of Section
11(a)(ii) or Sections (a), (b) or (c) of Section 13 (each, a "Triggering Event")
each of the following shall have occurred and remain in effect: (i) a Person who
is an Acquiring Person shall have transferred or otherwise disposed of a number
of Common Shares in a transaction, or series of transactions, which did not
result in the occurrence of any Triggering Event such that such Person is
thereafter a Beneficial Owner of 10% or less of the outstanding Common Shares,
(ii) there are no other Persons, immediately following the occurrence of the
event described in clause (i), who are Acquiring Persons, and (iii) the transfer
or other disposition described in clause (i) above was other than pursuant to a
transaction, or series of transactions, which directly or indirectly involved
the Corporation or any of its Subsidiaries, then the right of redemption
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set forth in Section 23(a) shall be reinstated and thereafter be subject to the
provisions of this Section.
(c) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Corporation may,
at its option, pay the Redemption Price in cash, Common Shares (based upon the
current per share market price of the Common Shares (determined pursuant to
Section 11(d)) at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors. The Corporation shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights pursuant to paragraph (a) of this Section 23, the
Corporation shall mail a notice of redemption to all the holders of the then
outstanding Rights 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 Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Corporation
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24, or other than in connection with the
purchase of Common Shares prior to the Distribution Date.
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Section 24. Exchange.
(a) The Board of Directors of the Corporation 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 11(a)(ii)) for Common
Shares at an exchange ratio of one Common Share 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 shall not be empowered to effect such exchange at any time after any
Person (other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan of the Corporation or any such Subsidiary, or any entity
holding Common Shares 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 Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Corporation 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 Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Corporation 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 Corporation 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 Shares for
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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 11(a)(ii)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Corporation, at
its option, may substitute equivalent common shares, as such term is defined in
Section 11(h), for Common Shares exchangeable for Rights, as appropriately
adjusted to reflect adjustments in the voting rights of the Common Shares
pursuant to the terms thereof, so that the fraction of an equivalent common
share delivered in lieu of each Common Share shall have the same voting rights
as one Common Share.
(d) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Corporation shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights.
(e) The Corporation shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Corporation shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to Section
11(d)) for the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
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<PAGE>
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Common Shares or to make any
other distribution to the holders of its Common Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Common Shares
rights or warrants to subscribe for or to purchase any additional Common Shares
or shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Common Shares, (iv) to effect any
consolidation or merger into or with, 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 more transactions, of 50% or more of the assets or earning
power of the Corporation and its Subsidiaries (taken as a whole) to, any other
Person, or (v) to effect the liquidation, dissolution or winding up of the
Corporation, then, in each such case, the Corporation shall give to each holder
of a Right Certificate, in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares, 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 10 days prior to the record date for determining
holders of the Common Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares, whichever shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii) shall occur, then
the Corporation shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with
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<PAGE>
Section 26, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii).
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 Corporation 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:
First Financial Corporation
One First Financial Plaza
P.O. Box 540
Terre Haute, Indiana 47808
Attention: Donald E. Smith, Chairman and President
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation 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 Corporation) as follows:
Terre Haute First National Bank
Main Office, Banking Center
One First Financial Plaza
Terre Haute, Indiana 47807
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate 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 Corporation prior to issuance of Right Certificates; otherwise, 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,
if the Corporation so directs, the Corporation and the Rights Agent shall
supplement or amend any provision of this Agreement in any manner which the
Corporation may deem desirable without the
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<PAGE>
approval of any holders of Rights or certificates representing Common Shares.
From and after the Distribution Date, if the Corporation so directs, the
Corporation, upon approval by the Board of Directors and the Rights Agent, shall
supplement or amend this Agreement without the approval of any holders of Rights
or Certificates representing Common Shares in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Corporation, upon such approval,
may deem desirable, including without limitation the addition of other events
requiring adjustment to the Rights under Sections 11 or 13 or procedures
relating to the redemption of the Rights, which change, amendment or supplement
shall not adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of any such
Person); provided, however, that this Agreement may not be supplemented or
amended pursuant to this sentence to lengthen, pursuant to clause (iii) of this
sentence, any time period unless such lengthening is specifically contemplated
hereby or is for the purpose of protecting, enhancing or clarifying the rights
of, or the benefits to, the holders of Rights. Upon the delivery of a
certificate from the President or any Vice President of the Corporation which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment;
provided, however, that the failure or refusal of the Rights Agent to execute
such supplement or amendment shall not affect the validity or effective date of
any supplement or amendment adopted by the Corporation. Notwithstanding anything
in this Agreement to the contrary, no supplement or amendment shall be made
which decreases the stated Redemption Price or the period of time remaining
until the Final Expiration Date.
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<PAGE>
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person or corporation other than the Corporation,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Indiana and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. 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 33. 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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
FIRST FINANCIAL CORPORATION
By: /s/ Donald E. Smith
--------------------------------
Donald E. Smith, Chairman
and President
Attest:
By: /s/ John W. Perry
------------------------------
John W. Perry, Secretary
TERRE HAUTE FIRST NATIONAL BANK
By: /s/ Norman L. Lowery
--------------------------------
Norman L. Lowery, President
and Chief Executive Officer
Attest:
By: /s/ John W. Perry
------------------------------
John W. Perry, Secretary
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<PAGE>
EXHIBIT A
Form of Right Certificate
Certificate No. ________ Rights
NOT EXERCISABLE AFTER JANUARY 6, 2007 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
FIRST FINANCIAL CORPORATION
This certifies that _______________, or registered assigns, is the
registered owner of the number 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 January 6, 1997 the "Rights Agreement"), between First
Financial Corporation, an Indiana corporation (the "Corporation"), and Terre
Haute First National Bank (the "Rights Agent"), to purchase from the Corporation
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., eastern standard time, on January 6, 2007 at
the office of the Rights Agent designated for such purpose, or at the office of
its successor as Rights Agent, one fully paid nonassessable share of the Common
Stock, without par value, of the Corporation (the "Common Shares"), at a
purchase price of $95.00 per Common Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of Common Shares which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of January 6, 1997, based on the Common Shares
as constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of Common Shares which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by this 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 of the Corporation and of the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Corporation and the above-mentioned offices of the
Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right
<PAGE>
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Common Shares 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.
In no event will certificates for fractional Rights be issued.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed in whole, but not in part, by the
Corporation at a redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for an equal number of Common Shares.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
or of any other securities of the Corporation 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 Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the 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
purchase until it shall have been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the
Corporation, and its corporate seal. Dated as of ________________, _____.
ATTEST: FIRST FINANCIAL CORPORATION
By: By:
------------------------------ -----------------------------------
Secretary President
Countersigned:
TERRE HAUTE FIRST NATIONAL BANK
By:
Authorized Signature
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<PAGE>
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 Corporation, with full power of substitution.
Dated: _____________________,________
-----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate hereof (as defined in the Rights Agreement).
-----------------------------------
Signature
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<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To First Financial Corporation:
The undersigned hereby irrevocably elects to exercise
_______________________ Rights represented by this Right Certificate to purchase
the Common Shares issuable upon the exercise of such Rights and requests that
certificates for such Common Shares be issued in the name of:
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 remaining 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:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
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<PAGE>
Form of Reverse Side of Right Certificate -- continued
================================================================================
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------
Signature
================================================================================
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
The Board of Directors of First Financial Corporation (the "Company")
has declared a dividend of one common share purchase right (a "Right" or
"Rights") for each outstanding share of all common stock, without par value (the
"Common Shares"), of the Company. The dividend is payable to the shareholders of
record as of January 20, 1997 (the "Record Date"). If and when the Rights become
exercisable, each Right will entitle the registered holder to purchase from the
Company one Common Share at a purchase price of $95.00 (the "Purchase Price"),
although the price may be adjusted as described below. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Terre Haute First National Bank, as Rights Agent (the
"Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Initially, shareholders will not receive a separate certificate for the
Rights. The Rights will be represented by the outstanding Common Share
certificates with a copy of this Summary of Rights attached thereto and the
Rights cannot be bought, sold or otherwise traded separately from the Common
Shares. Certificates for Common Shares issued after the Record Date will carry a
notation that indicates that Rights are attached to the Common Shares and that
the terms of the Rights Agreement are incorporated therein.
Separate certificates representing the Rights will be distributed as
soon as practicable after the "Distribution Date," which is the earliest to
occur of:
(1) 10 calendar days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring
Person") (excluding certain related persons) has (a) acquired
beneficial ownership of 12% or more of the outstanding Common Shares
or, in the case of any beneficial owner of 12% of the Common Shares on
the Record Date, additional shares representing 10% of the outstanding
Common Shares, or (b) become the beneficial owner of an amount of the
outstanding Common Shares (but not less than 10%) which the Board of
Directors determines to be substantial and which ownership the Board of
Directors determines is intended or may be reasonably anticipated, in
general, to cause the Company to take actions determined by the Board
of Directors to be not in the Company's best long-term interests (an
"Adverse Person"), or
(2) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to the time any person or
group becomes an Acquiring Person) following the commencement or
announcement of an intention to make a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a
person or group of 30% or more of such outstanding Common Shares.
<PAGE>
Until the Distribution Date (or earlier exchange, redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and, thereafter, such separate Right Certificates alone will
evidence the Rights.
EXERCISABILITY AND EXPIRATION
The holders of the Rights are not required to take any action until the
Rights become exercisable. As described above, the Rights are not exercisable
until the Distribution Date. Holders of the Rights will be notified that the
Rights have become exercisable when the Rights Agent mails the Rights
Certificates. The Rights will expire on January 6, 2007 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Company, in each case, as described below.
ADJUSTMENTS
In order to protect the value of the Rights to the holders, the
Purchase Price payable and the number of Common Shares, or other securities or
property issuable, upon exercise of the Rights are subject to adjustment from
time to time (1) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Common Shares, (2) upon the grant to
holders of the Common Shares of certain rights or warrants to subscribe for or
purchase Common Shares at a price, or securities convertible into Common Shares
with a conversion price, less than the then current market price of Common
Shares, or (3) upon the distribution to holders of the Common Shares of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Common Shares)
or of subscription rights or warrants, other than those referred to above.
These adjustments are called anti-dilution provisions and are intended
to ensure that a holder of Rights will not be adversely affected by the
occurrence of such events. With certain exceptions, the Company is not required
to adjust the Purchase Price until cumulative adjustments require a change of at
least 1% in the Purchase Price. No fractional Common Shares will be issued and
in lieu thereof, an adjustment in cash will be made based on the market price of
the Common Shares on the last trading day prior to the date of exercise.
FLIP-OVER EVENTS AND FLIP-IN EVENTS
In the event that (1) the Company is acquired in a merger or other
business combination transaction and the Company is not the surviving
corporation, or (2) any person consolidates or merges with the Company and all
or part of the Company's Common Shares are exchanged for
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<PAGE>
securities, cash or property of any other person, or (3) 50% or more of the
Company's consolidated assets or earning power are sold (collectively,
"Flip-Over Events"), proper provision will be made so that each holder of a
Right will 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 will have a
market value of two times the exercise price of the Right. In the event that (1)
an Acquiring Person engages in certain self-dealing transactions, or (2) a
person is declared an Adverse Person by the Board of Directors of the Company,
or (3) a person acquires 15% or more of the outstanding Common Shares (other
than certain persons who are beneficial owners of 12% or more of the Company's
Common Shares on the Record Date who acquire no more than an additional 10% of
the Company's outstanding Common Shares) (collectively, "Flip-In Events"),
proper provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right.
EXCHANGE OPTION
At any time after a person becomes an Acquiring Person, and prior to
the acquisition by such Acquiring Person of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
REDEMPTION
At any time prior to the tenth calendar day following the date of a
public announcement that a person or group has become an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
If the Board of Directors' ability to redeem the Rights pursuant to the
Rights Agreement has expired because a person or group has become an Acquiring
Person, but a Flip-Over Event or certain Flip-In Events have not yet occurred,
the redemption right will be reinstated if the Acquiring Person disposes of a
sufficient number of the Company's Common Shares so that such person then owns
only 10% or less of the outstanding Company's Common Shares and if certain other
conditions are met.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights (other than an
Acquiring Person or its Affiliates or Associates).
-3-
<PAGE>
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.
A copy of the Rights Agreement is available from the Company at no
charge upon written request. 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 incorporated herein by this reference.
-4-
