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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-A/A-1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TBC CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 31-0600670
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(State of Incorporation or Organization) (I.R.S. Employer Identification no.)
4770 Hickory Hill Road, Memphis, Tennessee 38141
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of the pursuant to Section 12(g) of the
Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following A.(d), please check the following
box. [ ] box. [ ]
Securities Act registration statement file number to which this
form relates: 0-11579
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Series A Junior Participating Preferred Stock
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(Title of class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Effective July 23, 1998, TBC Corporation (the "Company") entered into
an Amended and Restated Rights Agreement (the "Restated Rights Agreement") with
BankBoston, N.A., as Rights Agent (the "Rights Agent"). The Restated Rights
Agreement amended and restated the Rights Agreement, dated as of July 21, 1988,
between the Company and the Rights Agent. The following summary reflects the
material terms of the Restated Rights Agreement. This summary does not purport
to be complete and is qualified in its entirety by reference to the Restated
Rights Agreement filed as an exhibit hereto, which is hereby incorporated by
reference.
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
The Board of Directors of the Company on July 21, 1988 declared a
dividend consisting of rights to purchase one one-hundredth of a share of Series
A Junior Participating Preferred Stock, $.10 par value, of the Company
("Preferred Shares"). One right was distributed with respect to each share of
Common Stock, par value $.10 per share, of the Company ("Common Shares")
outstanding on July 29, 1988, the record date for the distribution. Rights have
been and will continue to be distributed with Common Shares issued by the
Company after the record date but before the expiration of the rights or the
occurrence of a "flip-in" event, as described below.
In accordance with the adjustment provisions applicable to the rights,
on July 23, 1998, each right represented the right to purchase 1/337.5th of a
Preferred Share for $14.81. The rights will become exercisable (1) at the close
of business on the earlier of the 10th calendar day after a public announcement
that a person or group has become the beneficial owner of 20% or more of the
outstanding Common Shares (a "share acquisition date") or (2) any earlier date
designated by the Company's Board of Directors.
Until the rights become exercisable, they will trade with the Common
Shares, and any transfer of Common Shares also will constitute a transfer of the
associated rights. When the rights become exercisable, they will begin to trade
separate and apart from the Common Shares. At that time, separate certificates
representing the rights will be mailed to holders.
Ten days after a "share acquisition date," each of the rights will
"flip-in" and will become the right to purchase one Common Share of the Company
for ONE DOLLAR ($1.00) per share. Upon the occurrence of such a "flip-in" event,
those rights held by any person or group that beneficially owns 20% or more of
the outstanding Common Shares, together with rights held by certain transferees
of any such person or group, will become void.
The Board of Directors may redeem the rights for $0.003 per right at
any time before the 10th calendar day following a "share acquisition date" or
the earlier expiration of the rights.
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The exercise price, the fraction of a Preferred Share (or Common
Shares) that may be purchased upon exercise of the rights and the redemption
price are subject to adjustment from time to time to prevent dilution.
The terms of the rights are set forth in the Restated Rights Agreement.
The provisions of the Restated Rights Agreement may be amended by the Board of
Directors to cure any ambiguity or correct any defect or inconsistency. Prior to
the close of business on the 10th calendar day following the occurrence of a
"share acquisition date," the Restated Rights Agreement also may be amended to
make any other change that the Board of Directors deems to be consistent with
the purposes of the Restated Rights Agreement and not adverse to the interests
of the Company and its stockholders.
ITEM 2. EXHIBITS.
See Index to Exhibits at page 3.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
TBC CORPORATION
Date: July 30, 1998 By: /s/ Louis S. DiPasqua
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Louis S. DiPasqua,
President and Chief
Executive Officer
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INDEX TO EXHIBITS
Exhibit No. Exhibit Description
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(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS
4.1 Amended and Restated Rights Agreement, dated as of July
23, 1998, between TBC Corporation and BankBoston, N.A., as
Rights Agent, including as Exhibit A thereto the form of
Rights Certificate.
3
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EXHIBIT 4.1
TBC CORPORATION
AND
BANKBOSTON, N.A., RIGHTS AGENT
AMENDED AND
RESTATED RIGHTS AGREEMENT
Dated as of
July 23, 1998
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<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C> <C> <C>
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issuance of Right Certificates 5
Section 4. Form of Rights Certificates 6
Section 5. Countersignature and Registration 7
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights 8
Section 8. Cancellation and Destruction of Rights Certificates 10
Section 9. Reservation and Availability of Shares 11
Section 10. Preferred Share Record Date 12
Section 11. Adjustment of Purchase Price, Exercise Price, Number and Type of
Shares and Number of Rights 12
Section 12. Certificates of Adjustment 18
Section 13. Fractional Rights and Fractional Shares 18
Section 14. Rights of Action 19
Section 15. Agreement of Rights Holders 20
Section 16. Rights Certificate Holder Not Deemed a Stockholder 20
Section 17. Concerning the Rights Agent 20
Section 18. Merger or Consolidation or Change of Name of Rights Agent 21
Section 19. Duties of Rights Agent 21
Section 20. Change of Rights Agent 23
Section 21. Issuance of New Rights Certificates 24
Section 22. Redemption 24
Section 23. Notice of Certain Events 25
Section 24. Notices 26
Section 25. Supplements and Amendments 26
Section 26. Successors 27
Section 27. Determinations and Actions by the Board of Directors 27
Section 28. Benefits of this Agreement 27
Section 29. Governing Law 27
Section 30. Counterparts 28
Section 31. Descriptive Headings 28
Section 32. Severability 28
Exhibit A Form of Rights Certificate A-1
Form of Assignment A-4
Form of Election to Purchase A-6
Exhibit B Summary of Rights B-1
</TABLE>
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AMENDED AND
RESTATED RIGHTS AGREEMENT
This AMENDED AND RESTATED RIGHTS AGREEMENT (the "Agreement") is entered
into as of July 23, 1998 (the "Restatement Date") between TBC CORPORATION, a
Delaware corporation (the "COMPANY"), and BANK BOSTON, N.A., a national banking
association (the "RIGHTS AGENT"), under the following circumstances:
A. The Company and the Rights Agent entered into a Rights
Agreement dated as of July 21, 1988 (the "PRIOR AGREEMENT").
B. The Board of Directors of the Company authorized and
declared a dividend consisting of one right (a "RIGHT") for each Common
Share (as hereinafter defined) outstanding on July 29, 1988 (the
"RECORD DATE"), and authorized the issuance of one Right in respect of
each Common Share issued between the Record Date and the earlier of the
occurrence of a Share Acquisition Date, the Expiration Date, or the
Final Expiration Date (as such terms hereinafter are defined),
including Common Shares that were treasury shares as of the Record Date
and subsequently become outstanding. Each Right initially represented
the right to purchase one one-hundredth of a Preferred Share (as
hereinafter defined).
C. In accordance with the adjustment provisions of the Prior
Agreement, as of the Restatement Date, the number of Preferred Shares
issuable upon exercise of a Right is 1/337.5th of a share, the Purchase
Price (as hereinafter defined) is $14.81, and the Redemption Price (as
hereinafter defined) is $0.003 per Right.
D. The Company and the Rights Agent are entering into this
Amended and Restated Rights Agreement for the purpose of amending and
restating the Prior Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree that the Prior Agreement
is amended and restated to read as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" means any Person that, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of 20% or more
of the Common Shares then outstanding; provided, however, that, (i) an Acquiring
Person shall not include the Company, any Subsidiary, any employee benefit plan
or employee stock ownership plan of the Company or of any Subsidiary, or any
Person organized, appointed, or established by the Company or any Subsidiary for
or pursuant to the terms of any such plan; (ii) a Person shall not be deemed to
have become an Acquiring Person solely as a result of a reduction in the number
of Common
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Shares outstanding, unless subsequent to such reduction such Person, or any
Affiliate or Associate of such Person, becomes the Beneficial Owner of any
additional Common Shares other than as a result of a stock dividend, stock
split, or similar transaction effected by the Company in which all stockholders
are treated equally; and (iii) a Person shall not be deemed to be an Acquiring
Person if the Person becomes the Beneficial Owner of more than 20% of the Common
Shares inadvertently and, as soon as practicable after the Person learns about
such beneficial ownership, divests a sufficient number of Common Shares so that
the Person ceases to be the Beneficial Owner of more than 20% of the Common
Shares.
(b) "AFFILIATE" and "ASSOCIATE" have the respective meanings given them
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(c) A Person is deemed to be the "BENEFICIAL OWNER" of, and is deemed
to "BENEFICIALLY OWN," any securities:
(i) which such Person, or any of such Person's Affiliates or
Associates, beneficially owns, directly or indirectly;
(ii) which such Person, or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding (whether
or not in writing), upon the exercise of any conversion right, exchange
right, other right, warrant, or option, or otherwise, except that a
Person is not deemed to be the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender offer
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange or (B) securities issuable upon exercise of
Rights;
(iii) which such Person, or any of such Person's Affiliates or
Associates, has the right, directly or indirectly, to vote or dispose
of pursuant to any agreement, arrangement, or understanding (whether or
not in writing), except that a Person is not deemed to be the
Beneficial Owner of, or to "beneficially own," any security under this
subparagraph (iii) if the agreement, arrangement, or understanding to
vote such security (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act and (B) is not then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by
any other Person with whom or which such Person, or any of such
Person's Affiliates or Associates, has any agreement, arrangement, or
understanding (whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (iii) of this paragraph (c)), or disposing of any
securities of the Company.
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Notwithstanding the foregoing, (x) a Person shall not be deemed to be 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, and (y) a Person
engaged in business as an underwriter of securities shall not be deemed to be
the Beneficial Owner of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in an underwriting syndicate
pursuant to an agreement to which the Company is a party until expiration of 40
calendar days after the date on which such securities are acquired.
(d) "BUSINESS DAY" means any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of Tennessee or the Commonwealth
of Massachusetts are authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date means 5:00 P.M., Boston,
Massachusetts time, on such date; provided, however, that if such date is not a
Business Day, "close of business" means 5:00 p.m., Boston, Massachusetts time,
on the next succeeding Business Day.
(f) "COMMON SHARES" means the shares of Common Stock, par value $.10
per share, of the Company and any shares other than Common Shares issued in a
subdivision, combination, or reclassification of the Common Shares, for which an
adjustment is made under Section 11(a)(i).
(g) "DISTRIBUTION DATE" has the meaning set forth in Section 3.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(i) "EXERCISE PRICE" means the exercise price per share set forth in
Section 11(a)(ii).
(j) "EXPIRATION DATE" has the meaning set forth in Section 7(a).
(k) "FINAL EXPIRATION" has the meaning set forth in Section 7(a).
(l) "FLIP-IN EVENT" means an event described in Section 11(a)(ii).
(m) "ISSUANCE" includes the issuance of authorized but unissued
shares and the transfer of treasury shares.
(n) "MARKET PRICE" has the meaning set forth in Section 11(d).
(o) "PERSON" means any individual, corporation, business trust,
partnership or other organization.
(p) "PREFERRED SHARES" means shares of Series A Junior Participating
Preferred Stock, $.10 par value, of the Company.
(q) "PURCHASE PRICE" means the purchase price per share set forth in
Section 7(b).
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(r) "RECORD DATE" means July 29, 1988.
(s) "REDEMPTION PRICE" has the meaning set forth in Section 22(a).
(t) "RIGHTS CERTIFICATE" has the meaning set forth in Section 3(a).
(u) "SECURITIES ACT" means the Securities Act of 1933, as amended.
(v) "SHARE ACQUISITION DATE" means the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that a Person has
become an Acquiring Person.
(w) "SUBSIDIARY" means any corporation or other entity of which a
majority of the voting power of the voting equity securities or other equity
interests is owned, directly or indirectly, by the Company.
(x) "SUMMARY OF RIGHTS" has the meaning set forth in Section 3(b).
(y) "TRADING DAY" means a day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day.
Any determination required by the definitions contained in this Section 1 shall
be made by the Board of Directors of the Company in its good faith judgment,
which determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the National
Association of Securities Dealers Inc. governing transfer agents and registrars.
The Company from time to time may appoint such co-Rights Agents as it may deem
necessary or desirable, upon 10 days' prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent. Any actions that
may be taken by the Rights Agent pursuant to the terms of this Agreement
may be taken by any such co-Rights Agent.
Section 3. ISSUANCE OF RIGHT CERTIFICATES. (a) Until the close of
business on (i) the 10th calendar day after the occurrence of a Share
Acquisition Date, or (ii) any earlier date designated by the Board of Directors
of the Company (the earlier of these dates being referred to herein as the
"DISTRIBUTION DATE"), the Rights shall be evidenced (subject to the provisions
of Section 3(c)) by the certificates for Common Shares registered in the names
of the holders of the Common Shares (which certificates for Common Shares also
shall be deemed to be Rights certificates) and
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not by separate Rights certificates, and the Rights shall be transferable only
in connection with the transfer of the Common Shares on the transfer books of
the Company maintained by the Company or its appointed transfer agent. As soon
as practicable after the Distribution Date, the Rights Agent shall send, by
first-class, insured, 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 Company, a Right certificate, in
substantially the form of EXHIBIT A hereto ("RIGHTS CERTIFICATE"), evidencing
one Right for each Common Share held of record as of the close of business on
the Distribution Date. As of the close of business on the Distribution Date, the
Rights shall be evidenced solely by such Rights Certificates.
(b) The Company shall make a copy of a Summary of Rights, in
substantially the form attached hereto as EXHIBIT B (the "SUMMARY OF RIGHTS"),
available to each record holder of Common Shares who from time to time may
request such summary.
(c) Until the Distribution Date (or the earlier redemption or
expiration of the Rights), the Rights shall be evidenced by the certificates for
the associated Common Shares, and the registered holders of the Common Shares
also shall be the registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption or expiration of the Rights), the
surrender for transfer of any of the certificates for outstanding Common Shares
with respect to which Rights have been issued also shall constitute the
surrender for transfer of the Rights associated with the Common Shares
represented by such certificate.
(d) Rights shall be issued with respect to all Common Shares which are
issued (whether originally issued or transferred from the Company's treasury)
after the Record Date but prior to the earlier of a Share Acquisition Date, the
Expiration Date or the Final Expiration Date. In addition, in connection with
the issuance or sale of Common Shares after the Distribution Date and prior to
the earlier of the Expiration Date or the Final Expiration Date, the Company (i)
shall, with respect to Common Shares issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities thereafter issued by the Company, and (ii)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue the appropriate number of Rights (and issue one
or more Rights Certificate representing the Rights so issued) in connection with
such issuance or sale; provided, however, that (x) no such Rights shall be
issued if, and to the extent that, the Company is advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights would be issued, and (y) no such
Rights shall be issued if, and to the extent that, appropriate adjustment
otherwise has been made in lieu of the issuance of such Rights. Certificates
representing Common Shares issued or transferred after the Record Date but prior
to the earlier of the Distribution Date, the Expiration Date or the Final
Expiration Date shall bear the following legend (or the equivalent legend
required by the Prior Agreement):
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Amended and Restated Rights
Agreement between TBC Corporation and the Rights Agent, as amended from
time to time (the "Restated Rights Agreement"), the terms of which are
hereby incorporated in this certificate
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by reference and a copy of which is on file at the principal executive
offices of TBC Corporation. Under certain circumstances, as set forth
in the Restated Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. TBC Corporation will mail to the holder of this
certificate a copy of the Restated Rights Agreement (as in effect on
the date of mailing) without charge promptly after receipt of a written
request therefor. Under certain circumstances, Rights that are or were
beneficially owned by an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the Restated
Rights Agreement) and any subsequent holder of such Rights may become
null and void.
Until the Distribution Date, the Rights associated with the Common Shares
represented by certificates containing the foregoing legend (or the equivalent
legend required by the Prior Agreement) shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate also shall
constitute the surrender for transfer of the Rights associated with the Common
Shares represented by such certificate.
Section 4. FORM OF RIGHTS CERTIFICATES. (a) Each Rights Certificate
(and the forms of assignment and of election to purchase shares to be printed on
the reverse of the Rights Certificate) 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 Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement;
as may be required to comply with any applicable law, with any rule or
regulation made pursuant thereto, or with any rule or regulation of any stock
exchange on which the Rights from time to time may be listed or of any
association on which the Rights from time to time may be authorized for
quotation; or to conform to usage. Subject to the provisions of Section 21, the
Rights Certificates, whenever issued, shall be dated as of the Distribution Date
and, on their face, shall entitle the holders thereof to purchase such number of
fractions of a Preferred Share as shall be set forth therein at the Purchase
Price; subject, however, to adjustment as provided in this Agreement (including,
without limitation, as provided in Section 11(a)).
(b) Notwithstanding any other provisions of this Agreement, any Rights
Certificate issued pursuant to Section 3 or Section 21 that represents Rights
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee after the Acquiring Person
became an Acquiring Person, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person's becoming an Acquiring Person and that
either (A) holds an equity interest in such Acquiring Person (or any such
Associate or Affiliate) or has any continuing agreement, arrangement or
understanding with such Acquiring Person (or any such Associate or Affiliate)
regarding the transferred Rights or (B) receives such Rights pursuant to a
transfer that the Board of Directors of the Company has determined is part of a
plan, arrangement, or understanding that has as a primary purpose or effect the
avoidance of Section 7(e), any Rights Certificate issued at any time to any
nominee of an Acquiring Person, of any Associate or Affiliate of an Acquiring
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Person, or of any such transferee, and any Rights Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement or adjustment of
any other Rights Certificate referred to in this sentence, shall bear the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, President, or any Vice President, either manually or by facsimile
signature, and have affixed thereto the Company's seal or a facsimile thereof
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned, either manually or by facsimile signature, by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who has signed any of the Rights Certificates ceases to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates nevertheless may
be countersigned by the Rights Agent, issued and delivered with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the date such Rights
Certificate is signed, is a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept books for registration and transfer of the Rights Certificates.
Such books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e), and Section 13,
any Rights Certificate may, 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 Expiration Date or the Final Expiration Date, be transferred, split up,
combined or exchanged for another Rights Certificate or Rights Certificates
entitling the registered holder to purchase the same number of Preferred Shares
(or other securities) as the Rights Certificate surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing delivered
to the Rights Agent and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent or such other office as the Rights Agent
may designate
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from time to time for that purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action with respect to the transfer of any such
surrendered Rights Certificate until the registered holder has completed and
signed the certificate contained in the form of assignment on the reverse side
of such Rights Certificate and has provided such additional evidence of the
identity of the Beneficial Owner or former Beneficial Owner, or the Affiliates
or Associates of the Beneficial Owner or former Beneficial Owner, as the Company
reasonably has requested. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 13, countersign and deliver to the person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction, or mutilation
of a Rights Certificate, and, in case of the loss, theft, or destruction of a
Rights Certificate, of indemnity or security reasonably satisfactory to them and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and, in case of the mutilation of a Rights Certificate, upon
surrender to the Rights Agent and cancellation of the mutilated Rights
Certificate, the Company shall make and deliver a new Rights Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 7(e), the registered holder of any Rights
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 Rights Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at its principal
office or such other office as the Rights Agent may designate from time to time
for that purpose, together with payment of the aggregate Purchase Price with
respect to the total number of fractions of a Preferred Share (or Common Shares
or other securities) as to which such surrendered Rights are being exercised, at
or prior to the close of business on the earlier of (i) July 31, 2008 (the
"FINAL EXPIRATION DATE"), or (ii) the date on which the Rights are redeemed as
provided in Section 22 (such earlier date being referred to herein as the
"EXPIRATION DATE").
(b) The Prior Agreement provided that each Right initially shall
represent the right to purchase one one-hundredth of a Preferred Share for a
purchase price (the "PURCHASE PRICE") of FIFTY DOLLARS ($50.00). As a result of
adjustments made in accordance with the provisions of the Prior Agreement to
reflect stock splits, stock dividends, and similar transactions occurring after
the Record Date and before the Restatement Date, on the Restatement Date, each
outstanding Right represents, and each Right issued after the Restatement Date
shall represent, the right to purchase 1/337.5th of a Preferred Share, subject
to further adjustment as provided in Section 11, for a Purchase Price of $14.81,
subject to further adjustment from time to time as provided in Section 11. The
Purchase Price shall be payable in lawful money of the United States of America
in accordance with Section 7(c).
<PAGE> 11
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed
with signature guaranteed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased and an amount equal to any applicable transfer
tax, in cash or by certified check or bank draft payable to the order of the
Company, the Rights Agent shall, subject to Section 19(k), promptly (i)
requisition from any transfer agent for the Preferred Shares (or make available,
if the Rights Agent is the transfer agent for the Preferred Shares) certificates
for the total number of fractions of a Preferred Share to be purchased, and the
Company shall comply with, and hereby irrevocably authorizes and directs such
transfer agent to comply with, all such requests, (ii) as provided in Section
13(b), at the election of the Company, cause depository receipts and/or cash in
lieu of fractional shares to be issued (in which event, the Company hereby
authorizes and directs such transfer agent to deposit with the depository agent
certificates for the Preferred Shares (or other securities) represented by such
receipts), (iii) when appropriate, requisition from the Company's transfer agent
certificates for the total number of Common Shares (or other securities) to be
purchased in accordance with Section 11(a)(ii), and the Company hereby
authorizes and directs its transfer agent to comply with all such requests, (iv)
when appropriate, requisition from the Company the amount of cash to be paid in
accordance with Section 11(a)(iii) or in lieu of the issuance of fractional
shares in accordance with Section 13, (v) promptly after the receipt of such
certificates or depository receipts, cause them to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and (vi) when appropriate,
promptly after receipt, deliver such cash to or upon the order of the registered
holder of such Rights Certificate. In the event the Company is obligated to
issue Preferred Shares (or Common Shares or other securities) or to pay cash
pursuant to Section 11(a)(iii) or Section 13, the Company shall make all
arrangements necessary so that such Preferred Shares (or Common Shares or other
securities) and cash are available for issuance and payment by the Rights Agent,
as and when appropriate.
(d) In case the registered holder of any Rights Certificate exercises
less than all of the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Rights Certificate or to
his duly authorized assign, subject to the provisions of Section 13.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were at any time on or after the earlier of the Distribution
Date or the date on which any Person becomes an Acquiring Person beneficially
owned by (i) the Acquiring Person or any Associate or Affiliate of the Acquiring
Person, (ii) a transferee of the Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person became an
Acquiring Person, or (iii) a transferee of the Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming an Acquiring Person and who either (A) holds an
equity interest in such Acquiring Person (or any such Associate or Affiliate) or
has any continuing agreement, arrangement or understanding with such Acquiring
Person (or any such Associate or Affiliate) regarding the transferred Rights or
(B) receives such Rights pursuant to a transfer that the Board of Directors of
the Company has determined is part of a plan, arrangement or understanding that
has as a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void when such Person becomes an Acquiring Person, and no holder
of such Rights shall have any right with respect to such Rights under any
provision of this Agreement from and after the time such Person becomes an
<PAGE> 12
Acquiring Person. The Company shall use all reasonable efforts to assure that
the provisions of this Section 7(e) and of Section 4(b) are complied with, but
shall have no liability to any holder of Rights or any other Person as a result
of its failure properly to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees in accordance with this
Section 7(e).
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder has (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner or former Beneficial Owner, or the Affiliates or Associates of
the Beneficial Owner or former Beneficial Owner, as the Company reasonably may
request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange, if surrendered to the Company or to any of its agents,
shall be delivered to the Rights Agent for cancellation or in cancelled form or,
if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Rights Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall cancel and
retire, any Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise of the Rights Certificate. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company or shall, at the written
request of the Company, destroy such cancelled Rights Certificates and deliver a
certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES. (a) The Company
shall cause to be reserved and kept available out of the Preferred Shares that
have been authorized by the Company's stockholders but are unissued, or that are
held in the Company's treasury, a number of the Preferred Shares that shall be
sufficient to permit the exercise in full of all of the outstanding Rights.
(b) The Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all Preferred Shares (or Common
Shares or other securities) reserved for issuance upon exercise of the Rights to
be listed on the exchange on which the Common Shares then may be listed upon
official notice of issuance or, if the Common Shares are not then listed on an
exchange, to cause transactions in Preferred Shares (or Common Shares or other
securities) to be quoted in The Nasdaq Stock Market.
(c) The Company shall (i) prepare and file, as soon as practicable
following the occurrence of a Share Acquisition Date, a registration statement
under the Securities Act on an appropriate form with respect to the Rights and
the Preferred Shares (or Common Shares or other
<PAGE> 13
securities) purchasable upon exercise of the Rights, (ii) use its best efforts
to cause such registration statement to become effective as soon as practicable
after such filing, and (iii) use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of the exercise of all of
the Rights, the Expiration Date or the Final Expiration Date. The Company also
shall take such action as may be appropriate to comply with the securities laws
of each state in which holders of the Rights reside. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability of the
Rights in order to prepare and file such registration statement. Upon any such
suspension, the Company shall issue a public announcement and notice to the
Rights Agent stating that the exercisability of the Rights has been suspended
temporarily, and the Company shall issue a further public announcement and
notice to the Rights Agent at such time as the suspension no longer is in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction in which any requisite
registration or qualification has not been obtained or any requisite notice of
exemption has not been filed.
(d) The Company shall take all such action as may be necessary to
assure that all Preferred Shares (or Common Shares or other securities)
delivered upon exercise of Rights are, at the time of delivery of the
certificates therefor (subject to payment of the Purchase Price or the Exercise
Price, as the case may be), duly and validly authorized and issued, fully paid
and nonassessable, freely tradeable, free and clear of any liens, encumbrances
or other adverse claims, and not subject to any rights of call or first refusal.
(e) The Company shall pay, when due and payable, any and all federal
and state transfer taxes and charges that may be payable in respect of the
issuance, delivery, or transfer of the Rights Certificates or of any Preferred
Shares (or Common Shares or other securities) upon exercise of the Rights. The
Company shall not, however, be required (i) to pay any transfer tax that may be
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or any issuance, delivery, or transfer of certificates for
the Preferred Shares (or Common Shares or other securities) in a name other than
that of, the registered holder of the Rights Certificate evidencing the Rights
surrendered for exercise, or (ii) to issue or deliver any certificates for
Preferred Shares (or Common Shares or other securities) upon the exercise of any
Rights until any such tax has been paid or until it has been established to the
Company's satisfaction that no such tax is due. Any such tax shall be paid by
the holder of such Rights Certificate at the time of surrender.
Section 10. PREFERRED SHARE RECORD DATE. Each Person in whose name any
certificate for Preferred Shares (or Common Shares or other securities) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such Preferred Shares (or Common Shares or other
securities) represented by such certificate on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (or Exercise Price, as the
case may be) and any applicable transfer tax was made. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including the right to vote, to
<PAGE> 14
receive dividends or other distributions, or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, EXERCISE PRICE, NUMBER AND
TYPE OF SHARES AND NUMBER OF RIGHTS. From and after the Restatement Date, the
Purchase Price and the Exercise Price, the number and type of shares S covered
by each of the Rights, and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company at any time after the
Restatement Date (A) declares a dividend on the Common Shares payable
in Common Shares, (B) subdivides or splits the outstanding Common
Shares, (C) combines or consolidates the outstanding Common Shares into
a smaller number of shares or effects a reverse split of the Common
Shares, or (D) issues any shares other than Common Shares in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), then, and in
each such event, the Purchase Price and the Exercise Price in effect at
the time of the record date for such dividend or of the effective date
of such subdivision, split, combination, consolidation, reverse split
or reclassification, shall be adjusted proportionately (except as
otherwise provided in this Section 11(a) and Section 7(e)) so that the
holder of any Rights exercised after such time shall be required to pay
the same aggregate Purchase Price or Exercise Price, as the case may
be, as such holder would be required to pay if such Rights had been
exercised immediately prior to such date, and the number of fractions
of a Preferred Share or the number and kind of Common Shares or other
securities, as the case may be, issuable on such date shall be adjusted
proportionately (except as otherwise provided in this Section 11(a) and
Section 7(e)) so that such holder would be entitled to receive the same
aggregate number of fractions of a Preferred Share or the same number
and kind of Common Shares or other securities, as the case may be, that
such holder would have owned and been entitled to receive by virtue of
such dividend, subdivision, split, combination, consolidation, reverse
split or reclassification if such Rights had been exercised immediately
prior to such date. If an event occurs that would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) In the event that a Share Acquisition Date occurs (a
"FLIP-IN EVENT"), proper provision shall be made so that, from and
after the close of business on the 10th calendar day after such Flip-in
Event occurs, each holder of a Right (except as provided in Section
7(e)) thereafter shall receive, in lieu of Preferred Shares, upon
exercise of each Right held by such holder in accordance with the terms
of this Agreement, one Common Share for a purchase price (the "EXERCISE
PRICE") of ONE DOLLAR ($1.00) per Common Share. The number of such
Common Shares and the Exercise Price shall be subject to adjustment
after the Restatement Date as provided in this Section 11.
<PAGE> 15
(iii) In the event that the Company has insufficient
unreserved authorized but unissued Common Shares and Common Shares held
in the Company's treasury to permit the exercise in full of all of the
outstanding Rights in accordance with paragraph (ii) of this Section
11(a), the Company shall (A) determine the excess ("SPREAD") of (x) the
value of the Common Shares issuable upon the exercise of a Right (the
"CURRENT VALUE") over (y) the Exercise Price and (B) with respect to
each Right, make adequate provision to substitute for the Common Shares
issuable upon exercise of the Right, upon payment of the applicable
Exercise Price: (1) cash, (2) a reduction in the Exercise Price, (3)
Common Shares or other equity securities of the Company (including,
without limitation, preferred shares, or fractions of preferred shares,
which the Board of Directors of the Company, based on the advice of a
nationally recognized investment banking firm, deems to be
substantially the economic equivalent of the Common Shares ("COMMON
SHARE EQUIVALENTS")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate
value (determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected
by the Board of Directors) equal to the Current Value; provided,
however, that if the Company has not made adequate provisions pursuant
to clause (B) above within 30 days following the first to occur of a
Flip-In Event or the date on which the Company's right of redemption
pursuant to Section 22(a) expires, then the Company shall deliver, upon
the surrender for exercise of a Right and without requiring payment of
the Exercise Price, Common Shares (to the extent available) and then,
if necessary, cash, which in the aggregate are equal to the Spread. If
the Board of Directors of the Company determines in good faith that it
is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, such 30-day period
may be extended to the extent necessary (but not by more than 60 days)
in order that the Company may seek shareholder approval for the
authorization of such additional shares (such period, as it may be
extended, hereinafter is referred to as the "SUBSTITUTION PERIOD"). To
the extend that the Company determines that some action should be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide (subject to Section 7(e))
that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution
to be made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall make a
public announcement stating that the exercisability of the Rights
temporarily has been suspended and shall make another public
announcement at such time as the suspension no longer is in effect. For
purposes of this Section 11(a)(iii), the value of a Common Share shall
be the market price on the date of the first occurrence of the Flip-In
Event determined in accordance with Section 11(d), and the value of any
"common share equivalent" shall be deemed to have the same value as a
Common Share on such date.
(b) If the Company fixes a record date for the issuance of rights or
warrants to all holders of Common Shares entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after such record date)
Common Shares (or shares having the same rights,
<PAGE> 16
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 per equivalent Common Share (or having a conversion price
per share, if a security convertible into Common Shares or equivalent Common
Shares) less than the market price (determined in accordance with Section 11(d))
per Common Share on such record date, the Purchase Price and the Exercise Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price and the Exercise Price in effect immediately prior to such record
date, respectively, by a fraction the numerator of which is 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 (or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
market price, and the denominator of which is the number of Common Shares
outstanding on such record date, plus the number of additional Common Shares or
equivalent Common Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered initially are convertible). If
any part of such subscription price may be paid in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Common Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed and, in the event such rights or warrants are not so issued, the
Purchase Price and the Exercise Price shall be adjusted, respectively, to be the
Purchase Price and the Exercise Price that would then be in effect if such
record date had not been fixed.
(c) If the Company fixes a record date for the making of a distribution
to all holders of Common Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend paid out of the Company's earnings or retained
earnings), other assets (other than a dividend payable in Common Shares, but
including any dividend payable in shares other than Common Shares) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price and the Exercise Price to be in effect after such record date
shall be determined by multiplying the Purchase Price and the Exercise Price in
effect immediately prior to such record date, respectively, by a fraction the
numerator of which is the market price (determined in accordance with Section
11(d)) per Common Share on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, other 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 market price determined in
accordance with Section 11(d)) per Common Share. Such adjustments shall be made
successively whenever such a record date is fixed, and, in the event such
distribution is not so made, the Purchase Price and the Exercise Price shall be
adjusted, respectively, to be the Purchase Price and the Exercise Price that
would then be in effect if such record date had not been fixed.
<PAGE> 17
(d) For purposes of any computation under this Agreement (other than a
computation pursuant to Section 11(a)(iii)), the "market price" of a Preferred
Share or a Common Share on any date of determination shall be deemed to be the
average of the daily closing prices per share for the 30 consecutive Trading
Days immediately prior to such date and, for purposes of any computation under
Section 11(a)(iii), the "market price" of a Common Share shall be deemed to be
the average of the daily closing prices per share for the 10 consecutive Trading
Days immediately following such event; provided, however, that, in the event the
"market price" of a Preferred Share or a Common Share is determined during a
period commencing with the announcement by the issuer of such Common Shares of
(A) a dividend or distribution on such Common Shares or Preferred Shares payable
in Common Shares or securities convertible into Common Shares (other than the
Rights) or (B) any subdivision, split, combination, consolidation, reverse stock
split or reclassification of such shares and ending 30 Trading Days after the
ex-dividend date for such dividend or distribution or the record date for such
subdivision, split, combination, consolidation, reverse stock split or
reclassification, the "market price" shall, in each such case, be appropriately
adjusted to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, if 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 shares listed on the principal national securities
exchange on which such shares are listed or admitted to trading or, if such
shares are not listed or admitted to trading on any national securities
exchange, the last quoted sale price or, if no sale price is quoted, the average
of the high bid and low asked prices in the over-the-counter market, as reported
by The Nasdaq Stock Market or any such other system then in use or, if on any
such date such shares are not reported by The Nasdaq Stock Market or such other
system, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such shares selected by the Board
of Directors of the Company. If, on any such date, no market maker is making a
market in such shares, the closing price on such date shall be the value of such
share on such date as determined in good faith by the Board of Directors, and
any such determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. If such shares are not publicly
held or not so listed or traded, "market price" per share shall mean the value
per share as determined in good faith by the Board of Directors, and such
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price or the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price or the Exercise Price; provided, however, that
any adjustments that, 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; and provided, further, that, in any event, 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 that mandates such adjustment, and (ii) the
Expiration Date. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a Preferred Share or a Common
Share, as the case may be.
(f) If, as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right exercised after such adjustment becomes entitled to
receive upon exercise of such Right
<PAGE> 18
any shares of the Company other than Preferred Shares or Common Shares, the
number of such other shares so receivable shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares and Common Shares contained in
this Section 11, and the provisions of Sections 7, 9, 10 and 13 with respect to
the Preferred Shares and/or the Common Shares shall apply on like terms to any
such other shares.
(g) Each Right originally issued by the Company subsequent to any
adjustment made to the Purchase Price and/or the Exercise Price either before or
after the Restatement Date shall evidence the right to purchase, at the adjusted
Purchase Price and (at the close of business on the 10th calendar day following
the occurrence of a Share Acquisition Date) the adjusted Exercise Price, the
number of fractions of a Preferred Share (or Common Shares or other securities)
purchasable from time to time upon exercise of the Rights, all subject to
further adjustment as provided in this Agreement.
(h) Unless the Company has exercised the election provided in Section
11(i), upon each adjustment of the Purchase Price and the Exercise Price
pursuant to Section 11(b) or Section 11(c) following the Share Acquisition Date,
each of the Rights outstanding immediately prior to the making of such
adjustment thereafter shall evidence the right to purchase, at the adjusted
Purchase Price or the adjusted Exercise Price, as the case may be, that number
of fractions of a Preferred Share or that number of Common Shares (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number of
fractions of a Preferred Share or the number of Common Shares purchasable upon
exercise of a Right immediately prior to this adjustment by (y) the Purchase
Price or the Exercise Price, respectively, in effect immediately prior to such
adjustment, and (ii) dividing the product so obtained by the Purchase Price or
the Exercise Price, respectively, in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of
the Purchase Price and the Exercise Price, to adjust the number of Rights, in
lieu of any adjustment in the number of fractions of a Preferred Share (or the
number of Common Shares or other securities) purchasable upon the exercise of a
Right. Each Right outstanding after such adjustment of the number of Rights
shall be exercisable for the number of fractions of a Preferred Share (or the
number of Common Shares or other securities) for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price and the Exercise Price, respectively, in effect immediately prior to the
adjustment by the Purchase Price and the Exercise Price, respectively, in effect
immediately after the adjustment. The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for
the adjustment and, if then known, the amount of the adjustment. The record date
may be the date on which the Purchase Price and the Exercise Price are adjusted
or any day thereafter, as determined by the Board of Directors, but, if the
Rights Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Rights Certificates have been issued, the
Company shall, upon each adjustment of the number of Rights pursuant to this
Section 11(i) and as promptly as practicable, cause to be distributed to the
record holders of Rights Certificates on such record date Rights
<PAGE> 19
Certificates evidencing, subject to Section 13, the additional Rights to which
such holders are entitled as a result of such adjustment or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
are entitled after such adjustment. Rights Certificates so distributed shall be
issued, executed and countersigned in the manner provided for in this Agreement
(and may set forth, at the option of the Company, the adjusted Purchase Price
and the adjusted Exercise Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in the
public announcement.
(j) Notwithstanding any adjustment or change in the Purchase Price and
the Exercise Price or the number of fractions of a Preferred Share (or number of
Common Shares or other securities) issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the Exercise Price and the number of fractions of a
Preferred Share (and number of Common Shares) that were set forth in the initial
Rights Certificates issued under this Agreement.
(k) Before taking any action that would cause an adjustment reducing
the aggregate Purchase Price payable for one Preferred Share or the aggregate
Exercise Price payable for one Common Share below the then stated capital, if
any, of a Preferred Share or of a Common Share, respectively, the Company shall
take any corporate action that may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares (or Common Shares or other securities) at such
adjusted Purchase Price or such adjusted Exercise Price, respectively.
(1) If this Section 11 requires that an adjustment in the Purchase
Price and the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, the issuance to the holder of any Rights exercised after such record date
of the Preferred Shares (or Common Shares or other securities) or fractions
thereof, if any, issuable upon such exercise over and above the Preferred Shares
(or Common Shares or other securities) or fractions thereof issuable upon such
exercise on the basis of the Purchase Price or the Exercise Price, as the case
may be, in effect prior to such adjustment, except that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional Preferred Shares (or Common
Shares or other securities), or fractions thereof, upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reduction in the Purchase Price and the
Exercise Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of Directors of the Company in
its discretion determines to be advisable.
Section 12. CERTIFICATES OF ADJUSTMENT. Whenever an adjustment is made
as provided in Section 11, the Company promptly shall: (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
<PAGE> 20
and with each transfer agent for the Preferred Shares a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing Common Shares) in accordance with Section 24; provided,
however, that the failure of the Company to give any such notice shall not
affect the validity or the force or effect of, or the requirement for, such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment contained in such certificate. Any adjustment
made pursuant to Section 11 of this Agreement shall be effective as of the date
of the event giving rise to such adjustment.
Section 13. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of a Right or to distribute Rights
Certificates that evidence fractional Rights (i.e., rights to acquire less than
the then current fraction of a Preferred Share which may be acquired upon
exercise of a whole Right). If the Company determines not to issue such
fractional Rights then, in lieu of such fractional Rights, the Company shall pay
to the record holders of the Rights Certificates with regard to which such
fractional Rights otherwise would be issuable an amount in cash equal to the
same fraction of the market price of a whole Right. For purposes of this Section
13(a), the market price of a Right shall be determined in the same manner as the
market price of a Preferred Share or a Common Share is determined pursuant to
Section 11(d).
(b) The Company shall not be required to issue fractions of a Preferred
Share (or Common Shares or other securities) upon exercise of the Rights or to
distribute certificates that evidence fractional Preferred Shares (or Common
Shares or other securities), other than fractional Preferred Shares that are
integral multiples of the then current fraction of a Preferred Share which may
be acquired upon the exercise of a Right. In lieu of issuing fractions of
Preferred Shares, the Company, at its election, may issue depository receipts
evidencing fractions of Preferred Shares pursuant to an appropriate agreement
between the Company and a depository selected by the Company; provided, however,
that any such agreement shall provide that the holders of such depository
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as beneficial owners of the Preferred Shares. If the Company
does not issue fractional shares or depository receipts in lieu of fractional
shares, the Company shall pay to the registered holders of Rights Certificates
at the time such Rights Certificates are exercised an amount in cash equal to
the same fraction of the market price of a Preferred Share (or of a Common Share
or other securities, as the case may be) on the date of exercise. For purposes
of this Section 13(b), the market price of a Preferred Share (or a Common Share
or other securities) shall be determined in accordance with Section 11(d).
(c) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Right or any fractional
Preferred Shares (other than fractions of Preferred Shares which are integral
multiples of the then current fraction of a Preferred Share which may be
acquired upon the exercise of a Right) upon exercise of a Right.
Section 14. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective holders of record of the Rights, and any
holder of record of a Right, without the consent of the Rights Agent or of the
holder of any other Rights, may, in such holder's own
<PAGE> 21
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company or any other Person to enforce,
or otherwise act in respect of, such holder's rights under this Agreement and
any Rights Certificates of which such holder is the record holder. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
<PAGE> 22
Section 15. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the Right, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be evidenced by
a Rights Certificate and will be transferable only in connection with the
transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent or such other office as the Rights
Agent may designate from time to time for that purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed; and
(c) subject to Section 6(a), Section 7(e) and Section 7(f), the Company
and the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Share
certificate) is registered as the absolute owner of such Rights Certificate and
of the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Share certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 16. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends, or be deemed for any purpose the holder of Preferred Shares (or
Common Shares or other securities) that at any time may be issuable on the
exercise of the Rights represented thereby, nor shall anything contained in this
Agreement or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote in the election of directors or upon any matter
submitted to stockholders at any meeting thereof, to give or withhold consent to
any corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 23), to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Rights
Certificate have been exercised in accordance with the provisions of this
Agreement.
Section 17. CONCERNING THE RIGHTS AGENT. (a) The Company shall pay to
the Rights Agent reasonable compensation for all services rendered by it under
this Agreement and, from time to time on demand of the Rights Agent, shall
reimburse the Rights Agent for, or shall pay, its reasonable expenses and
counsel fees and other disbursements incurred by the Rights Agent in the
administration and execution of this Agreement and the exercise and performance
of its duties under this Agreement. The Company also shall indemnify the Rights
Agent for, and hold it harmless against, any loss, liability or expense incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent as a result of anything done or omitted to be
<PAGE> 23
done by the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against any claim
of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Preferred Shares or Common Shares or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, if necessary, verified or acknowledged by the
proper Person or Persons.
Section 18. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, or any corporation succeeding to the corporate trust or
stock transfer 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 to
this Agreement, provided such corporation is eligible for appointment as a
successor Rights Agent under the provisions of Section 20. If, at the time such
successor Rights Agent succeeds to the agency created by this Agreement, any of
the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor so
countersigned; if at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and, in all such cases, such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) If, at any time, the name of the Rights Agent is changed and at
such time any of the Rights Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; in case at that time any of
the Rights Certificates have not been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and, in all such cases, such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 19. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights, by their
acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel, and the
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to
<PAGE> 24
any action taken or omitted by it in good faith and in accordance with
such opinion, regardless of whether such counsel is also counsel to the
Company.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person or the determination of the market price) be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect of
such fact or matter is 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
Treasurer, or the Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable under this Agreement only
for its own gross 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 Rights Certificates or be required to verify such statements
or recitals, but all such statements and recitals (except its
countersignature thereof) are and shall be deemed to have been made
only by the Company.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
of this Agreement (except the due execution of this Agreement by the
Rights Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature of the Rights Certificate),
nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights
Certificate, nor shall it be responsible for any adjustment required
under the provisions of Section 11 or for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice
of any such adjustment), nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares or other
securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Preferred Shares or Common Shares or
other securities will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company shall 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 to carry out or perform
the provisions of this Agreement.
<PAGE> 25
(g) The Rights Agent shall accept instructions with respect to
the performance of its duties under this Agreement from any one of the
Chairman of the Board, the President, any Vice President, the Treasurer
or the Secretary of the Company and shall apply to such officers for
advice or instructions in connection with its duties, and the Rights
Agent shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with any such instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company; become pecuniarily interested in
any transaction in which the Company may be interested; contract with
or lend money to the Company; or otherwise act as fully and freely as
though it were not the Rights Agent under this Agreement. Nothing in
this Agreement shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers vested in it by this Agreement or perform any duty
under this Agreement 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 attorney or agent
or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment of such attorney or agent.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise of
its rights under this Agreement if there are reasonable grounds for
believing that the repayment of such funds, or adequate indemnification
against such risk or liability, is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, either has not been completed or indicates an affirmative response
to clause 1 or 2 of such certificate, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer
without first obtaining instructions from the Company, as provided in
Section 19(g).
Section 20. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail and to the holders of the Rights Certificates by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause) upon 30 days' written notice mailed to the Rights
Agent or the successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares and the Preferred Shares by registered or certified
mail, and to the holders of the Rights Certificates by
<PAGE> 26
first-class mail. If the Rights Agent resigns, is removed or otherwise becomes
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company fails 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
registration or incapacity by the resigning or incapacitated Rights Agent or by
the holder of any of the Rights (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then the registered holder of any
Right may apply to any court of competent jurisdiction for the appointment of a
successor Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of any state of the United States so long
as such corporation is authorized to do business as a banking institution, is in
good standing, is authorized to exercise corporate trust powers, is subject to
supervision or examination by federal or state authorities, and has at the time
of its appointment as Rights Agent a combined capital and surplus of at least
$50 million or is an Affiliate controlled by such corporation. 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 under this Agreement and execute and deliver any further assurance,
conveyance, act, or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice of the appointment
in writing with the predecessor Rights Agent and each transfer agent of the
Preferred Shares and the Common Shares. Failure to give any notice provided for
in this Section 20 or any defect in such notice shall, however, 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 21. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board of Directors of the Company to reflect any
adjustment or change in the Purchase Price and the Exercise Price, in the
number, kind or class of shares or other securities or property purchasable upon
exercise of the Rights or in any other provision of this Agreement made in
accordance with Section 11, Section 25 or any other provision of this Agreement.
Section 22. REDEMPTION. (a) The Board of Directors of the Company may,
at its option, at any time prior to the earlier of (i) the close of business on
the 10th calendar day following the Share Acquisition Date, or (ii) the close of
business on the Final Expiration Date, redeem all but not less than all of the
Rights then outstanding at a redemption price of $0.003 for each Right, as
adjusted to reflect any stock split, stock dividend, or similar transaction
occurring after the Restatement Date (such redemption price being referred to
herein as the "REDEMPTION PRICE" and being, on the Restatement Date, the $.01
Redemption Price initially established in the Prior Agreement, adjusted, as
provided in the Prior Agreement, to reflect stock splits, stock dividends, and
similar transactions occurring after the Record Date and before the Restatement
Date). The Company, at its option, may pay the Redemption Price either in Common
Shares (based on the "market price" of the Common Shares at the time of
redemption, determined in accordance with Section 11(d)), cash or any other form
of consideration deemed appropriate by the Board of
<PAGE> 27
Directors of the Company. Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable upon the occurrence of a
Flip-in Event until such time as the Company's right of redemption pursuant to
this Section 22(a) has expired.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights and without any further action and
without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price, without any interest thereon. Promptly after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to each such holder of a Right in accordance with Section
24. Each such notice of redemption shall state the method by which payment of
the Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than as specifically set forth in this Section 22 or in
connection with the repurchase of Common Shares prior to the Distribution Date.
Section 23. NOTICE OF CERTAIN EVENTS. If, at any time after the
Distribution Date, the Company proposes: (a) to effect any transaction referred
to in Section 11(a)(i), 11(b) or 11(c) or to pay any dividend to the holders of
Common Shares payable in shares of any class or to make any other distribution
to the holders of Common Shares (other than a regular periodic cash dividend),
(b) to offer to the holders of Common Shares options, warrants or other rights
to subscribe for or to purchase any Common Shares (including any securities
convertible into or exchangeable for Common Shares) or shares of any other class
or any other securities, or options, warrants, convertible or exchangeable
securities or other rights, (c) to effect any reclassification of the Preferred
Shares or the Common Shares or any recapitalization or reorganization of the
Company, or (d) to effect any consolidation or merger with or into, 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 more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, the Company shall, in each such case, give to each
holder of Rights, in accordance with Section 24, a notice of such proposed
action specifying the record date for the purposes of such transaction, dividend
or distribution, 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 or the
Preferred Shares, if any such date is to be fixed. Such notice shall be so
given, in the case of any action described in clause (a) or (b) above, at least
10 days prior to the record date for determining holders of the Common Shares or
the Preferred 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 record of the
Common Shares or the Preferred Shares, whichever is the earlier. If a Flip-in
Event occurs, the Company shall, in any such case, as soon as practicable
thereafter give to each holder of Rights, in accordance with Section 24, a
notice of the occurrence of the Flip-in Event and the consequences of the event
to holders of Rights under Section 11(a)(ii). The failure to give notice
required by this Section 23 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
<PAGE> 28
Section 24. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if personally delivered
or sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
TBC Corporation
4770 Hickory Hill Road
Post Office Box 18342
Memphis, TN 38181-0342
Attention: Secretary
Subject to the provisions of Section 20, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
150 Royall Street
Boston, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if personally delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 25. SUPPLEMENTS AND AMENDMENTS. The Company from time to time,
with the approval of its Board of Directors, may supplement or amend this
Agreement without the approval of any holders of Rights in order: (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained in this
Agreement that may be defective or inconsistent with any other provision in this
Agreement, and (iii) prior to the close of business on the 10th calendar day
following the occurrence of a Share Acquisition Date, to make any other change
in the provisions of this Agreement that the Board of Directors of the Company
deems to be consistent with the purposes of this Agreement and not adverse to
the interests of the Company and its stockholders. Upon the delivery of a
certificate from an appropriate officer of the Company stating that the proposed
supplement or amendment is in compliance with the terms of this Section 25, the
Rights Agent shall execute such supplement or amendment unless the Rights Agent
determines in good faith that such supplement or amendment would adversely
affect its interests under this Agreement. Notwithstanding anything to the
contrary in this Agreement, prior to the close of business on the 10th calendar
day following the occurrence of a Share Acquisition Date, the interests of the
holders of Rights shall be deemed to be coincident with the interests of the
holders of Common Shares.
<PAGE> 29
Section 26. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns.
Section 27. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. For
all purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including the purpose of determining the
particular percentage of such outstanding Common Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the provisions of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Agreement. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
the Company or as may be necessary or advisable in the administration of this
Agreement, including the right and power (i) to interpret the provisions of this
Agreement and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for the purpose of clause (ii)
below, all omissions with respect to the foregoing) that are done or made by the
Board of Directors in good faith shall (i) be final, conclusive, and binding on
the Company, the Rights Agent, the holders of Rights and all other parties and
(ii) not subject the Board of Directors to any liability to the holders of
Rights.
Section 28. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of Rights any legal or equitable right, remedy, or claim
under this Agreement, but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of Rights.
Section 29. GOVERNING LAW. This Agreement and each Rights Certificate
issued under this Agreement shall be deemed to be a contract made under the laws
of the State of Delaware 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.
<PAGE> 30
Section 30. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each such counterpart shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 31. DESCRIPTIVE HEADINGS. Descriptive headings of the Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions of this Agreement.
Section 32. SEVERABILITY. If any term, provision, covenant, or
restriction of or in 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 or in this Agreement shall
remain in full force and effect and shall in no way be affected, impaired, or
invalidated, except that, notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant, or restriction is held by such
court or authority to be invalid, void, or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 22 of
this Agreement shall be reinstated and shall not expire until the close of
business on the 20th day following the date of such determination by the Board
of Directors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TBC CORPORATION
By /c/ LOUIS S. DiPASQUA
---------------------------------------
Louis S. DiPasqua,
President and Chief Executive Officer
BANKBOSTON, N.A.
By /c/ MARGARET PRENTICE
---------------------------------------
Margaret Prentice
Administrative Manager
