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As filed with the Securities and Exchange Commission on September 8, 1995
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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REGISTRATION STATEMENT
ON
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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THE PARKWAY COMPANY
(Exact name of registrant as specified in its charter)
Texas 74-2123597
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
(Address of principal executive offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act: Not
applicable.
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If this form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. / /
If this form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. / /
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Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK PURCHASE RIGHTS
(Title of class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
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On September 7, 1995 the Board of Directors of The Parkway Company (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Company Common Stock to shareholders of record at the close of
business on September 29, 1995. The description and terms of the Rights are
set forth in the Rights Agreement by and between the Company and Society
National Bank, as Rights Agent, dated as of September 7, 1995 (the "Agreement")
adopted by the Board of Directors. The Agreement is attached hereto as Exhibit
I and is incorporated herein by this reference. Subject to becoming
exercisable as described below, each Right entitles its registered holder to
purchase from the Company one share of Common Stock at a Purchase Price of
$60.00, subject to adjustment.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock on the Distribution Date, which will occur on the earliest of (i) the
date of the Company's public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 20% or more of the outstanding shares
of Common Stock (the "Stock Acquisition Date"), (ii) 10 days following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 30% or more of the outstanding shares of Common
Stock or (iii) 10 days after the Board of Directors of the Company shall
declare any Person to be an "Adverse Person," as described below.
To declare a person to be an "Adverse Person" under the Agreement
requires a determination by the Board of Directors of the Company that such
person, alone or together with its affiliates and associates, has become the
beneficial owner of an amount of Common Stock which the Board determines to be
substantial (which amount shall in no event be less than 15% of the shares of
Common Stock then outstanding) and a determination by the Board members who are
not officers of the Company that (a) such beneficial ownership by such person
is intended to cause the Company to repurchase any of the Common Stock
beneficially owned by such person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to
provide such person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term interests of the
Company and its shareholders would not be served by taking such action or
entering into such transactions or series of transactions at that time or (b)
such beneficial ownership is causing or reasonably likely to cause a material
adverse impact on the business or prospects of the Company (including, but not
limited to, impairment of relationships with tenants, customers or regulators
or impairment of the Company's ability to maintain its competitive position).
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
September 29, 1995, will contain a legend incorporating the Agreement by
reference, but existing Common Stock certificates will also
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incorporate the Agreement notwithstanding the absence of such a legend, and
(iii) the surrender for transfer of any certificate for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 6, 2005, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. All shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event any person becomes an Acquiring Person, each holder of a
Right will have the right to receive, upon exercise of the Right and payment of
the Purchase Price, Common Stock (or, if sufficient Common Stock is unavailable
and subject to certain limitations, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right
(referred to as the "Subscription Right"). The Subscription Right is
exercisable during the 60-day period following the later of the Stock
Acquisition Date or the effective date of a registration statement covering the
Common Stock (or other securities, if applicable) subject to the Subscription
Right (referred to as the "Subscription Period"). Notwithstanding any of the
foregoing, all Rights that are, or (under certain circumstances specified in
the Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company engages in a merger or other business combination transaction
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Purchase Price of the Right (referred to as the "Merger Right").
The Purchase Price payable, and the number of shares of Common Stock
(or the number and kind of other securities or property, as the case may be)
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current market
price of the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
No adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. The Company is not
required to issue fractional shares of Common Stock and in lieu thereof an
adjustment in cash may be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
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At any time prior to the earlier of the Stock Acquisition Date or the
Expiration Date, the Board of Directors may redeem the outstanding Rights in
whole, but not in part, at a redemption price of $.01 per Right (the
"Redemption Price"). In addition, the Board of Directors may redeem the Rights
after the Stock Acquisition Date but prior to an event which gives rise to the
exercisability of the Merger Right if (1) prior to the Subscription Period, the
Acquiring Person shall have transferred a sufficient number of shares of Common
Stock such that such Person owns 5% or less of the outstanding Common Stock
(and there are no other Acquiring Persons) and such transfers did not involve
the Company; (2) in connection with a merger or business combination involving
the Company where all shareholders are treated alike and not involving the
Acquiring Person or any entity in which the Acquiring Person has an interest;
or (3) following the Subscription Period if there are no Acquiring Persons.
Redemption of outstanding Rights may also occur under the following
circumstances: If a bidder who does not beneficially own more than 4.9% of the
Common Stock (and who has not within the past year owned more than 4.9% or more
of the Common Stock) proposes to acquire all of the Common Stock for cash at a
price which a nationally recognized investment banker selected by such bidder
states in writing is fair, and such bidder has obtained written financing
commitments (or otherwise has financing in hand) and complies with certain
procedural requirements, then the Company, upon the request of the bidder, will
hold a special shareholder meeting to vote on a resolution requesting the Board
of Directors to redeem the Rights. If a majority of the outstanding shares
entitled to vote on the proposal votes in favor of such resolution, then for a
period of 60 days after such meeting the Rights will be automatically redeemed
at the Redemption Price immediately prior to the consummation of any tender
offer for all of such shares at a price per share in cash equal to or greater
than the price offered by such bidder; provided, however, that no redemption
will be permitted or required after a person has become an Acquiring Person or
an Adverse Person.
Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights to change or
supplement the provisions of the Agreement in any manner which the Board deems
necessary or desirable, except that, after the Distribution Date, no amendment
may be effected which would adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
ITEM 2. EXHIBITS.
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The Company's Articles of Incorporation, as amended (incorporated
by reference to Exhibit 6.1 of Amendment No. 1 to the Company's Form S-14 (No.
2-69138) filed on November 6, 1980).
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Amendment to the Company's Articles of Incorporation (incorporated
by reference to Exhibit A of the Company's Proxy Statement dated November 3,
1987).
The Company's Bylaws (incorporated by reference to Exhibit 6.2 of
Amendment No. 1 to the Company's Form S-14 (No. 2-69138) filed on November 6,
1980).
Amendment to the Company's Bylaws, dated December 4, 1986
(incorporated by reference to Exhibit (3)(c) on the Company's 1987 Annual
Report on Form 10-K).
Amendment to the Company's Bylaws, dated December 4, 1987
(incorporated by reference to Exhibit 3(e) on the Company's 1988 Annual Report
on Form 10-K).
Rights Agreement by and between the Company and Society National
Bank, as Rights Agent, dated September 7, 1995 attached hereto as Exhibit I.
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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.
DATED: September 7, 1995 THE PARKWAY COMPANY
By: /s/ Leland R. Speed
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Name: Leland R. Speed
Title: Chief Executive Officer
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EXHIBIT I
RIGHTS AGREEMENT
BY AND AMONG
THE PARKWAY COMPANY
AND
SOCIETY NATIONAL BANK,
AS RIGHTS AGENT
DATED AS OF SEPTEMBER 7, 1995
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<TABLE>
TABLE OF CONTENTS
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SECTION PAGE
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<S> <C> <C>
1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . 9
3 Issue of Rights Certificates . . . . . . . . . . . . . . . . . . . . . 10
4 Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . 11
5 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6 Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stole Rights Certificates . . . . . . . . . . . . . . . . . . . . . 12
7 Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8 Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9 Reservation and Availability of Common Stock . . . . . . . . . . . . . 14
10 Common Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . 16
11 Subscription Right . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12 Merger Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
13 Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . . . . . . . . . . . . . . . . 19
14 Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . 23
15 Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16 Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . 24
17 Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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18 Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . 25
19 Merger or Consolidation or Change of Name
of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
20 Rights and Duties of Rights Agent . . . . . . . . . . . . . . . . . . 26
21 Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . 28
22 Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . 28
23 Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . 29
24 Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
25 Indemnification of Corporate Officers . . . . . . . . . . . . . . . . 32
26 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . 33
27 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
28 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . 34
29 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
30 Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . 34
31 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
32 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
33 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . 35
34 Execution of Counterparts . . . . . . . . . . . . . . . . . . . . . . 35
Exhibit A -- Form of Rights Certificate
Exhibit B -- Summary of Rights
</TABLE>
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RIGHTS AGREEMENT
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This Rights Agreement is dated as of September 7, 1995 (the
"Agreement") between The Parkway Company, a Texas corporation (the "Company"),
and Society National Bank (the "Rights Agent").
On September 7, 1995, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each outstanding share of common stock, par value $1.00 per share,
of the Company (the "Common Stock") outstanding on September 29, 1995 (the
"Record Date"), and contemplated the issuance of one Right (subject to
adjustment as provided herein) for each share of Common Stock of the Company
issued between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are defined herein), each Right representing the
right to purchase one share of Common Stock of the Company upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated.
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, without the prior
approval of a majority of the Continuing Directors, shall be the Beneficial
Owner of 20% or more of the shares of Common Stock then outstanding, PROVIDED,
HOWEVER, that Acquiring Person shall not mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or
any Subsidiary of the Company, (iv) any entity holding shares of Common Stock
organized, appointed, or established by the Company or any of its Subsidiaries
for or pursuant to the terms of any such plan, or (v) a Person who
inadvertently becomes the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding and who (A) represents to the Board of Directors
of the Company that the acquisition of such shares was inadvertent without
intent to make a tender offer; (B) undertakes to sell, within five Business
Days, to a Person other than the Company, enough shares so that his total
Beneficial Ownership is less than 20% of the shares of Common Stock then
outstanding; and (C) in fact does sell such shares within five Business Days.
(b) "Affiliate" shall mean, with respect to a specified
Person, a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.
(c) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon determination by the Board of
Directors that such Person, alone or together with its Affiliates and
Associates, is the Beneficial Owner of an amount of Common Stock which the
Board of Directors determines to be substantial (which amount shall in no event
be less than 15% of the shares of Common Stock then
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outstanding) and a determination by the Board of Directors of the Company that
(i) such Beneficial Ownership by such Person is intended to cause the Company
to repurchase any of the Common Stock beneficially owned by such Person or to
cause pressure on the Company to take action or enter into a transaction or
series of transactions intended to provide such Person with short-term
financial gain under circumstances where the Board of Directors determines that
the best long-term interests of the Company and its shareholders would not be
served by taking such action or entering into such transactions or series of
transactions at that time or (ii) such Beneficial Ownership is causing or is
reasonably likely to cause a material adverse impact on the business or
prospects of the Company (including, but not limited to, impairment of
relationships with tenants, customers or regulators of the Company or
impairment of the Company's ability to maintain its competitive position).
(d) "Associate" shall mean, with respect to a specified
Person, (i) any corporation or organization (other than the Company or a
Subsidiary of the Company) of which such Person is an officer or partner or is,
directly or indirectly, the Beneficial Owner of 10% or more of any class of
equity security as defined in Rule 3a-11 of the General Rules and Regulations
under the Exchange Act, (ii) any trust or other estate in which such Person has
a substantial beneficial interest or as to which such Person serves as trustee
or in a similar fiduciary capacity, and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person,
or is an officer or director of any corporation controlling or controlled by
such Person.
(e) "Beneficial Ownership" shall be determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act (or any
successor rule or statutory provision) or, if Rule 13d-3 shall be rescinded and
there shall be no successor rule or statutory provision thereto, pursuant to
Rule 13d-3 as in effect on the date hereof; provided, however, that a Person
shall, in any event, also be deemed to be the "Beneficial Owner" of any
securities:
(i) which such Person or any Affiliate or Associate thereof
beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate
thereof, 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) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by
such Person or any Affiliate or Associate thereof until the
tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights;
(iii) which such Person or any Affiliate or Associate
thereof, directly or indirectly, has sole or shared voting or
investment power
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with respect thereto pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (iii) as
a result of an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding (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 provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act;
or
(iv) which are beneficially owned, directly or indirectly,
by any other Person or any Affiliate or Associate thereof with
which such Person or any Affiliate or Associate thereof 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 (d)) or disposing of any voting securities of
the Company.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Mississippi are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Jackson, Mississippi time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Jackson, Mississippi time,
on the next succeeding Business Day.
(h) "Common Stock" shall mean the common stock, par value
$1.00 per share, of the Company and "common stock" when used with reference to
any Person other than the Company shall mean the capital stock with the
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(i) "Company" shall mean The Parkway Company, a Texas
corporation, until a successor corporation shall have become such or until a
Principal Party shall assume, and thereafter be liable for, all obligations and
duties of the Company hereunder, pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor corporation or
Principal Party.
(j) "Continuing Director" shall mean any director of the
Company who is not an Acquiring Person or an Adverse Person or a representative
or nominee of an Acquiring Person or an Adverse Person, and (i) who was elected
by the stockholders or appointed by the Board of Directors of the Company prior
to the date as of which the Acquiring Person or Adverse Person in question
became an Acquiring Person or
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Adverse Person, or (ii) who was designated (before his initial election or
appointment as a director) as a Continuing Director by a majority of the Whole
Board, but only if a majority of the Whole Board shall then consist of
Continuing Directors, or, if a majority of the Whole Board shall not then
consist of Continuing Directors, by a majority of the then Continuing
Directors.
(k) "Current Market Price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the 30 consecutive Trading Days immediately prior to such
date; PROVIDED, HOWEVER, that in the event that the current per share market
price of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock, or (B) any
subdivision, combination, or reclassification of such Common Stock, and prior
to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination,
or reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the National Association of Securities Dealers, Inc.
National Market System ("NASDAQ NMS") or, if the shares or Common Stock are not
listed or admitted to trading on the NASDAQ NMS, as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NASDAQ NMS or, if the shares of Common Stock are not
listed or admitted to trading on the NASDAQ NMS, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the fair
market value of such shares on such date as determined reasonably and with good
faith by the Board of Directors of the Company shall be used. If the Common
Stock is not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share determined reasonably and with
good faith to the holders of Rights by the Board of Directors of the Company,
whose determination shall be conclusive for all purposes.
(l) "Distribution Date" shall mean the earliest of (i) the
Stock Acquisition Date or (ii) the tenth day after the date of the commencement
of, or first public announcement of the intent of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company or any entity holding shares of Common
Stock organized, appointed or established by the Company for or pursuant to the
terms of any such plan), to commence (which intention to commence remains in
effect for five Business Days after such announcement) a tender or exchange
offer which would result in such Person becoming the Beneficial Owner of 30% or
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more of the shares of Common Stock then outstanding, unless such date is
extended by a majority of the Continuing Directors (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights), or (iii) the close of business on the tenth day after the Board
determines pursuant to the criteria set forth in Section 1(c) hereof, that a
Person is an Adverse Person.
(m) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement, and all
references to any rule or regulation of the General Rules and Regulations under
the Exchange Act shall be, except as otherwise specifically provided herein, to
such rule or regulation as was in effect on the date of this Agreement.
(n) "Merger Right" shall mean the Rights described in Section
12(a) hereof.
(o) An "Offer" shall mean a written proposal delivered to the
Company by any Person who both beneficially owns 4.9% or less of the
outstanding Common Stock as of the date such proposal is delivered and who has
not within one year prior to the delivery of such written proposal beneficially
owned in excess of 4.9% of the outstanding Common Stock (an "Offeror"), and
which proposal:
(i) provides for the acquisition of all of the outstanding
shares of Voting Stock held by any Person other than the Offeror
and its Affiliates for cash at the same price;
(ii) is accompanied by a written opinion of a nationally
recognized investment banking firm which is addressed to the
holders of shares of Voting Stock other than the Offeror and its
Affiliates and states that the price to be paid to such holders
pursuant to the Offer is fair to such holders;
(iii) states that the Offeror has obtained written financing
commitments from recognized financing sources, and/or has on hand
cash or cash equivalents, for the full amount of all financing
necessary to consummate the Offer; and
(iv) requests the Company to call a special meeting of the
holders of Voting Stock for the purpose of voting on a resolution
requesting the Board of Directors to redeem the Rights and
contains a written agreement of the Offeror to pay (or share with
any other Offeror) at least one-half of the Company's costs of
such special meeting (exclusive of the Company's costs of
preparing and mailing proxy material for its own solicitation).
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(p) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger of
otherwise) of such entity.
(q) "Stock Acquisition Date" shall mean the first date of a
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(r) "Subscription Right" shall mean the Rights described in
Section 11(a) hereof.
(s) "Subsidiary" shall mean, with reference to any Person, any
corporation of which a majority of any class of equity security is Beneficially
Owned, directly or indirectly, by such Person.
(t) "Trading Day," with respect to any security shall mean a
day on which the principal national securities exchange on which the security
is listed or admitted to trading is open for the transaction of business or, if
the security is not listed or admitted to trading on any national securities
exchange, a Business Day.
(u) "Triggering Event" shall mean an event giving rise to
the Subscription Rights or Merger Rights.
(v) "Whole Board" shall mean the total number of directors
which the Company would have if there were no vacancies on the Board of
Directors.
(w) "Voting Stock" shall mean (i) the Common Stock and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Stock in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up.
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 final and binding.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3, will also be, prior to the Distribution
Date, the holders of its Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time act as Co-Rights Agent or appoint such Co-Rights
Agents as it may deem necessary or desirable. Any actions which may be taken
by the Rights Agent pursuant to the terms of this Agreement may be taken by any
such Co-Rights Agent. To the extent that any Co-Rights Agent takes any action
pursuant to this Agreement, such Co-Rights Agent will be entitled to all of the
rights
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and protections of, and subject to all of the applicable duties and obligations
imposed upon, the Rights Agent pursuant to the terms of this Agreement.
Section 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the Distribution
Date, (x) the Rights will be evidenced by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Company, or the Rights Agent, as the case may be, will
send by first-class, insured, postage prepaid mail, to each record holder of
the Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company or the Rights Agent,
a Rights Certificate, in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock so
held. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company or the Rights Agent will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage prepaid mail to each record holder of the Common Stock
as of the close of Business on the Record Date, at the address of such holder
shown on the records of the Company or the Rights Agent, as the case may be.
(c) Rights shall be issued in respect of all shares of Common
Stock (whether originally issued or delivered from the Company's treasury)
issued after the Record Date but prior to the earlier of the Distribution Date
or the Final Expiration Date (as hereinafter defined). Certificates
representing such shares of Common Stock shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement by and
among The Parkway Company (the "Company") and Society National
Bank, as Rights Agent, dated as of September 7, 1995 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices
of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of
the Rights Agreement without charge promptly after receipt of a
written request therefor. Under certain circumstances, Rights
beneficially owned by Acquiring Persons or Adverse Persons or any
Associate or Affiliate of Acquiring Persons or Adverse Persons (as
those terms are defined in the Rights Agreement) and any
subsequent holder of such Rights may become null and void.
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<PAGE> 11
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Stock
represented by such certificates alone, and the surrender for transfer of any
of such certificates, shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
Section 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or to conform to
usage. Subject to the provisions of Section 11, Section 12 and Section 22
hereof, the Rights Certificates, whenever distributed, shall be dated as of the
Record Date and on their face shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein at the
price per share set forth therein (the "Purchase Price"), but the number of
such shares and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
hereof that represents Rights beneficially owned by an Acquiring Person or an
Adverse Person, or that represents any Rights owned on or after the
Distribution Date by any Person who subsequently becomes an Acquiring Person or
an Adverse Person or any Rights Certificate issued at any time upon the
transfer of any Rights to an Acquiring Person or an Adverse Person or any
Affiliate or Associate of an Acquiring Person or Adverse Person or to any
nominee of such Acquiring Person, Adverse Person, Affiliate or Associate and
any Rights Certificate issued pursuant to Section 6 or Section 13 upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, may contain the following legend:
The Rights represented by this Rights Certificate were issued
to a Person who was or became an [Acquiring] [Adverse] Person or
an Affiliate, Associate or nominee of an [Acquiring] [Adverse]
Person. This Rights Certificate and the Rights represented hereby
may become void in the circumstances specified in Section 7(e) of
the Rights Agreement.
The provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificate.
Section 5. REGISTRATION. (a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature, and shall
have affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature, and shall be countersigned by the
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<PAGE> 12
Rights Agent. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be issued and delivered by the Company 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 Certificates may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Company or the Rights
Agent will keep or cause to be kept, at the Company's offices at 300 One
Jackson Place, 188 East Capitol Street, Jackson, Mississippi, or at the
principal shareholder services office or offices of the Rights Agent, as the
case may be, books for registration and transfer of the Rights Certificates
issued hereunder. 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 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock as the Rights Certificate or Certificates 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 Certificates shall make such request in writing delivered to the
Company or Rights Agent and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at the
principal executive office of the Company or the principal office of the Rights
Agent designated for such purpose, as the case may be. Thereupon, the
Secretary of the Company or the Rights Agent, as the case may be, shall deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates, 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 or the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to it, and reimbursement to
the Company or the Rights Agent, as the case may be, of all reasonable expenses
incidental thereto, and upon surrender to the Company or Rights Agent, as the
case may be, and cancellation of the Rights Certificate if mutilated, the
Company or the Rights Agent, as the case may be, will execute and deliver a new
Rights Certificate of like tenor to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
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<PAGE> 13
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Sections 7(e) and 23(a) hereof, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby 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
including the certificate contained therein duly executed to the Company or the
Rights Agent at the principal executive office of the Company or the principal
shareholder services office or offices of the Rights Agent, as the case may be,
together with payment of the Purchase Price for each share of Common Stock as
to which the Rights are exercised prior to the earlier of (i) the Close of
Business on September 6, 2005 (the "Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof.
(b) The Purchase Price for each share of Common Stock pursuant
to the exercise of a Right shall initially be $60.00 and shall be subject to
adjustment from time to time as provided in Section 13 hereof and shall be
payable in lawful money of the United States of America in accordance with
Paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase including the
certificate contained therein duly executed, accompanied by payment of the
Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or bank draft payable to
the order of the Company, the Company or the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent, if any (but only to the
extent such transfer agent expressly assumes such duty), or if none, from the
Company's Secretary or Assistant Secretary, certificates for the number of
shares of Common Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or, (B) if the
Company, at its sole discretion, shall have elected to deposit the shares of
Common Stock issuable upon exercise of the Rights hereunder into a depository,
requisition from the depositary agent depositary receipts representing such
number of shares of Common Stock as are to be purchased (in which case
certificates for the shares of Common Stock represented by such receipts shall
be deposited by the transfer agent, if any (but only to the extent such
transfer agent expressly assumes such duty) or if none, from the Company's
Secretary or Assistant Secretary, with the depositary agent) and the Company
will direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. In the case of an
exercise of the Rights by a holder pursuant to Section 11(a), the Company or
the Rights Agent shall return such Rights Certificate to the registered holder
thereof after imprinting, stamping, or otherwise indicating thereon that the
rights represented by such Rights Certificate no longer include the rights
provided by Section 11(a), of the Rights Agreement and if less than all the
Rights represented by such Rights Certificate were so exercised, the Company or
the Rights Agent,
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<PAGE> 14
as the case may be, shall indicate on the Rights Certificate the number of
Rights represented thereby which continue to include the rights provided by
Section 11(a).
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Company or the Rights Agent and delivered to the
registered holder of such Rights Certificate or to his or her duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, if there occurs one or more of the transactions set forth in Section
11(a) or Section 12(a) on or after the time an Acquiring Person or an Adverse
Person has become such, then any Rights that are or were on or after the
earlier of the Distribution Date or the Stock Acquisition Date beneficially
owned by an Acquiring Person, an Adverse Person or any Associate or Affiliate
of an Acquiring Person or an Adverse Person shall become void with respect to
the Subscription Right and Merger Right and any holder of such Rights shall
thereafter have no right to exercise such Rights under the provisions of
Section 11(a) and Section 12(a).
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall be obligated to
undertake any action with respect to a registered holder of any Rights
Certificate upon the occurrence of any purported exercise thereof unless such
registered holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or any
of its agents or to the Rights Agent, be cancelled by the Company or the Rights
Agent, as the case may be, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company or the Rights Agent shall cancel and retire any other
Rights Certificates purchased or acquired by the Company or the Rights Agent,
as the case may be, otherwise than upon the exercise thereof.
Section 9. RESERVATION AND AVAILABILITY OF COMMON STOCK. (a) The
Company shall cause to be reserved and kept available out of its authorized and
unissued shares of Common Stock, or any authorized and issued shares of Common
Stock held in its treasury, the number of shares of Common Stock that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock issuable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable,
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<PAGE> 15
all shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the Stock Acquisition Date, or, if required under
the Securities Act of 1933, as amended (the "Act"), following the Distribution
Date, a registration statement under the Act, with respect to the Common Stock
purchasable upon exercise of the rights, (ii) cause such registration statement
to become effective as soon as practicable after the filing, and (iii) cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act and the rules and regulations thereunder)
until the expiration of the Subscription Period (as defined in Section
23(a)(ii)) and thereafter if required under the Act until the Expiration Date.
The Company will also take all action necessary to ensure compliance with the
securities laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statements. Upon any suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualifications in that
jurisdiction shall have been obtained.
(d) The Company shall take all such action as may be necessary
to ensure that all shares of Common Stock delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
(e) The Company shall pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Rights Certificates and of any certificates for
shares of Common Stock upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
(i) any transfer or delivery of Rights Certificates to a Person other than the
registered holder of Rights Certificates, or (ii) the issuance or delivery of
the shares of Common Stock in respect of a name other than that of the
registered holder of the Rights Certificates evidencing the Rights surrendered
for exercise, and may refuse to issue or deliver any certificates for shares of
Common Stock in a name other than that of the registered holder of such Rights
Certificates upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. COMMON STOCK RECORD DATE. Each person in whose name any
certificate for shares of Common Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock represented thereby on, and such certificate shall be
dated, the date upon which the Rights
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<PAGE> 16
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Common
Stock transfer books of the Company are closed, such person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Stock transfer
books of the Company are open.
Section 11. SUBSCRIPTION RIGHT. (a) In the event that any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any of its Subsidiaries or any entity holding securities
of the Company organized, appointed, or established by the Company or any of
its Subsidiaries for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall become an Acquiring Person,
then each holder of a Right, except as provided in Section 7(e) hereof, shall,
for a period of 60 days (or such other shorter or longer period as may be
established by action of a majority of the Continuing Directors) after the
later of the Stock Acquisition Date and the effective date of an appropriate
registration statement as permitted pursuant to Section 9, have a right to
receive ("Subscription Right"), upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is then exercisable and dividing that product by (y)
50% of the Current Market Price per one share of Common Stock on the date of
the occurrence of the event set forth in this paragraph (such number of shares
being referred to as the "number of Adjustment Shares"); PROVIDED, HOWEVER,
that if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 12 hereof, then only
the provisions of Section 12 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a).
(b) In the event that there shall not be sufficient authorized
but unissued Common Stock to permit the exercise in full of the Subscription
Rights, the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exercise of the
Subscription Rights, including the calling of a meeting of stockholders;
PROVIDED, HOWEVER, that if the Company is unable to cause the authorization of
a sufficient number of additional shares of Common Stock, then, in the event
the Rights become so exercisable, the Board of Directors may, but shall not be
required to, with respect to each Right, (A) pay cash in an amount equal to the
Purchase Price, in lieu of issuing shares of Common Stock and requiring payment
therefor, or (B) issue debt or equity securities or a combination thereof
having a value equal to the Current Value of the Common Stock, where the value
of such securities shall be determined by an investment banking firm selected
by the Board of Directors of the Company, and require the payment of the
Purchase Price, or (C) deliver any combination of cash, property, Common Stock
and/or other securities having a value equal to the Current Value, and require
payment of all or any requisite portions of the Purchase Price. The Current
Value shall be the product of the Current Market Price per share of Common
Stock on the date of the occurrence of the event giving rise to the
Subscription Right, multiplied by the number of shares of Common Stock for
which the Subscription Right otherwise would be exercisable if there were
sufficient shares available. To the extent that the Company determines that
some action need be taken
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<PAGE> 17
pursuant to clauses (A), (B) or (C) of the provision of this Section 11(b), the
Board of Directors may temporarily suspend the exercisability of the
Subscription Rights for a period of up to 75 days following the date on which
the event described in Section 11(a) shall have occurred, in order to seek any
authorization of additional shares of Common Stock and/or to decide the
appropriate form of distribution to be made pursuant to the above proviso and
to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended.
Section 12. MERGER RIGHT. (a) In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person, (y) any Person
shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other Person (or
the Company) or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell, mortgage or
otherwise transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons, then, and in
each such case, proper provision shall be made so that (i) following the
Distribution Date, each holder of a Right, except as provided in Section 7(e),
shall have the right ("Merger Right") to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
such number of shares of freely tradeable common stock of the Principal Party,
free and clear of any liens, encumbrances, or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase Price
by the number of shares of Common Stock for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to a
Subscription Right) and (2) dividing that product by 50% of the Current Market
Price per share of the common stock of such Principal Party on the date of
consummation of such consolidation, merger, sale, or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 13 hereof shall apply to such Principal
Party; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its common
stock) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of common stock thereafter deliverable upon
the exercise of the Merger Right.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x) or (y) of
the first sentence of this Section 12, the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so
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<PAGE> 18
issued, the Person that is the other party to the merger or
consolidation (including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in (z) of
the first sentence in this Section 12, the Person that is the
party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the common stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, as then in
effect, and such Person is a direct or indirect Subsidiary or Affiliate of
another Person the common stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; (2) in case such Person is
a Subsidiary, directly or indirectly, of more than one Person, the shares of
common stock of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
common stock having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"subsidiary" of both or all of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set forth in this Section 12 in
the same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its common stock that have not been issued or
reserved for issuance to permit the exercise in full of the Merger Rights and
unless prior thereto the Company and each Principal Party and each other Person
who may become a Principal Party, as a result of such consolidation, merger,
sale or transfer, shall have executed and delivered to the Rights Agent or to
the Company's Secretary or Assistant Secretary, a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 12
and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer, the Principal Party at its own expense
will:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, will use its best
efforts to cause such registration statement to become effective
as soon as practicable after such filing and will use its best
efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under
the
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securities laws of such jurisdictions as may be necessary or
appropriate; and
(iii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The rights under this Section 12 shall be in addition to the rights under
Section 11 and shall survive any exercise thereof.
Section 13. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 13 or as otherwise provided in
this Agreement.
(a) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Stock payable in shares
of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 13(a) and Section 7(e), the Purchase
Price in effect at the time of the record date for such dividend or the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that if a holder of Rights after such time were to
exercise that number of Rights which would result in the aggregate amount of
the Purchase Price payable upon such exercise (at the Purchase Price then in
effect) being equal to the amount of the Purchase Price that was payable prior
to such time upon exercise of a Right, he would be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Rights had
been exercised immediately prior to such date and at a time when the Common
Stock transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both Section 11(a) hereof and this Section 13(a), the
adjustment provided for in this Section 13(a) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a).
(b) If the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Common Stock or securities convertible into Common Stock at a
price per share of Common Stock (or having a conversion price per share, if a
security convertible into Common Stock) less than the Current Market Price per
share of Common Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which
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shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be conclusive for all
purposes. Shares of Common Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for a distribution
to all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend), assets (other than a dividend payable in
Common Stock), or subscription rights or warrants (excluding those referred to
in Section 13(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Current Market Price per share of the Common Stock 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 conclusive for all purposes) of the
portion of the cash, assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants in respect of one share of Common
Stock and the denominator of which shall be such current market price per share
of Common Stock. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which could
be in effect if such record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; PROVIDED,
HOWEVER, that any adjustments which by reason of this Section 13(d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 13 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock.
Notwithstanding the first sentence of this Section 13(d), any adjustment
required by this Section 13 shall be made no later than the earlier of (i)
three years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(e) If as a result of an adjustment made pursuant to Section
11 or Section 12(a), the holder of any Rights thereafter exercised shall become
entitled to
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<PAGE> 21
receive any shares of capital stock of the Company other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Sections 11 and 13(a), (b),
(c), (d), (f), (g), (h), (i), (j) and (l) and the provisions of Sections 7, 9,
10, 12 and 14 hereof with respect to the Common Stock shall apply on like terms
to any such other shares.
(f) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(g) Unless the Company shall have exercised its election as
provided in Section 13(h), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 13(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest one-ten thousandth) obtained
by (i) multiplying (x) the number of shares covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(h) The Company may elect on or after the date of any
adjustment of the Purchase price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
shares of Common Stock for which a Right was exercisable immediately prior to
such adjustment. Each right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-ten thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the 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, upon each
adjustment of the number of Rights pursuant to this Section 13(h), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date, Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the 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 shall be
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entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value of the shares of Common Stock
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Purchase Price.
(k) In any case in which this Section 13 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Rights exercised after such record date
the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(l) Anything in this Section 13 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 13, as and to the extent that in its sole discretion the Company shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Common Stock, (ii) issuance wholly for cash of any shares of Common Stock
at less than the Current Market Price, (iii) issuance wholly for cash of shares
of Common Stock or securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends, or (v) issuance
of rights, options or warrants referred to in this Section 13, hereafter made
by the Company to holders of its Common Stock shall, if practicable, not be
taxable to such stockholders.
(m) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares of its capital
stock in a reclassification of the outstanding Common Stock, the number of
Rights associated with each share of Common Stock then
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<PAGE> 23
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(n) The exercise of Rights under Section 11(a) shall only
result in the loss of rights under Section 11(a) to the extent so exercised and
shall not otherwise affect the rights represented by the Rights under this
Agreement, including the rights represented by Section 12.
(o) The Company shall not (i) consolidate with, (ii) merge
with or into, or (iii) sell or transfer to, in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning power of
the Company and its Subsidiaries taken as a whole, any other Person if at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be accorded by the Rights.
(p) After the Stock Acquisition Date, the Company shall not,
except as permitted by Section 23 or Section 28 hereof, take any action the
purpose or effect of which is to diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the Current Market
Price of a whole Right as of the date on which such fractional Rights would
have been otherwise issuable.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to the registered
holders of Rights Certificates, at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Current Market
Price of a share of Common Stock as of the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares upon exercise of a Right.
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<PAGE> 24
Section 15. RIGHTS OF ACTION. All rights of action in respect to
this Agreement, except the rights of action given to the Rights Agent pursuant
to Section 20 hereof, are vested in the respective registered holders of the
Rights Certificates and only such holders (and, prior to the Distribution Date,
the registered holders of the Common Stock and only such holders); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock) without the consent of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common Stock),
may, in his or her own behalf and for his or her own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his or her right to execute the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder by any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company, the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Company, if surrendered at the
principal office of the Company or Rights Agent, only on the registry book of
said Rights Agent, if surrendered at the principal shareholder services office
of the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or any Rights Agent) for all
purposes whatsoever, and neither the Company nor any Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise
restraining
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<PAGE> 25
performance of such obligation; PROVIDED, HOWEVER, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise expressly provided in this Agreement, no holder, as such,
of any Rights Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the shares of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
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 for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders, or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company will pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company will also indemnify the Rights Agent for,
and hold it harmless against, any loss liability, suit, action, proceeding, or
expense, incurred without negligence, bad faith, or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including,
without limitation, the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.
(b) The Rights Agent will be protected and will 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 evidencing Common Stock or other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed, and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. (a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent is a part, or any corporation succeeding to the
shareholder services business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case at the time such successor Rights Agent succeeds
to the agency created by this Agreement, any of the Rights Certificates have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the
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<PAGE> 26
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent changes
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; and 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 will have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. RIGHTS AND DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, will be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
will be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that
any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of
the Board, the President or any Vice President of the Company and
delivered to the Rights Agent, and such certificate will be full
authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of,
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have
been made by the Company only.
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<PAGE> 27
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of
any Rights Certificate (except its countersignature thereof); nor
will it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights
Certificate; nor will it be responsible for any adjustment
required under the provisions of this Agreement (including any
adjustment which results in Rights becoming void) or responsible
for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such
adjustment); nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities to
be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Common Stock or other securities will,
when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company will perform, execute, acknowledge, and
deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and
assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President
or any Vice President of the Company, and to apply to such
officers for advice or instructions in connection with its duties,
and it will not be liable for any action taken or suffered to be
taken by it in good faith in accordance with the instructions of
any such officer.
(h) The Rights Agent and any shareholder, director, officer,
or employee of the Rights Agent may buy, sell, or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein will 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 hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights
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<PAGE> 28
Agent will not be answerable or accountable for any act, default,
neglect, or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof. The Rights Agent
will not be under any duty or responsibility to ensure compliance
with any applicable federal or state securities laws in connection
with the issuance, transfer, or exchange of Rights Certificates.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 calendar days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent, as the case may be, upon
30 calendar days' notice in writing mailed to the Rights Agent and to each
transfer agent of the Common Stock by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
resigns or is removed or otherwise becomes incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company fails to make
such appointment within a period of 30 calendar days after giving notice of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Rights Certificate (who will, with such notice, submit
his Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. After appointment, the
successor Rights Agent will be vested with the same powers, rights, duties, and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; the predecessor Rights Agent will deliver and transfer to
the successor Rights Agent any property at the time held by it thereunder, and
execute and deliver any further assurance, conveyance, act, or deed necessary
for that purpose. Not later than the effective date of any such appointment,
the Company will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
will not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provision of this Agreement.
Section 23. REDEMPTION AND TERMINATION.
(a) (i) The Board of Directors of the Company may, at its
option, at any time prior to 5:00 P.M., Jackson, Mississippi time, on the
earlier of (x) the Stock Acquisition Date, or (y) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to
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reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price").
(ii) In addition, the Board of Directors of the Company
may redeem all but not less than all of the then outstanding Rights at the
Redemption Price following the occurrence of a Stock Acquisition Date, but
prior to any event described in Section 12(a), either (x) prior to commencement
of the period under Section 11(a) during which the Subscription Right may be
exercised (the "Subscription Period") if each of the following shall have
occurred and remain in effect: (1) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of Common Stock in
a transaction, or series of transactions, such that such Person is thereafter a
Beneficial Owner of 5% or less of the outstanding shares of Common Stock, (2)
there are no other Persons, immediately following the transfer or other
disposition described in clause (1), who are Acquiring Persons, and (3) the
transfer or other disposition described in clause (1) of this Section 23 was
other than pursuant to a transaction, or series of transactions, which directly
or indirectly involved the Company or any of its Subsidiaries; (y) in
connection with any event specified in Section 12(a) in which all holders of
Common Stock are treated alike and not involving an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, or any other Person in which
such Acquiring Person, Affiliate or Associate has any interest, or any other
Person acting directly or indirectly on behalf of or in association with any
such Acquiring Person, Affiliate or Associate; or (z) following the expiration
of the Subscription Period if and for as long as the Acquiring Person is not
thereafter the Beneficial Owner of securities representing 20% or more of the
Voting Power of the Company, and at the time of redemption there are no other
Persons who are Acquiring Persons.
(iii) In the event that a majority of the members of the
Board of Directors of the Company does not consist of Continuing Directors,
then for a period of 360 days following the date upon which the Board of
Directors ceases to have Continuing Directors as a majority of its members, the
Rights shall not be redeemed.
(b) (i) In the event the Company receives an Offer from any
Offeror, the Board of Directors of the Company shall call a special meeting of
stockholders (the "Special Meeting") for the purpose of voting on a precatory
resolution requesting the Board of Directors to redeem the Rights (the
"Resolution"). The Special Meeting shall be held on a date selected by the
Board of Directors, which date shall be not less than 90 and not more than 120
days after the later of (A) the date such Offer is received by the Company (the
"Offer Date") and (B) the date of any previously scheduled meeting of
stockholders to be held within 60 days after the Offer Date; PROVIDED, HOWEVER,
that if (x) such other meeting shall have been called for the purpose of voting
on a precatory resolution with respect to another Offer and (y) the Offer Date
shall be not later than fifteen days after the date such other Offer was
received by the Company, then both the Resolution and such other resolution
shall be voted on at such meeting and such meeting shall be deemed to be the
Special Meeting. The Board of Directors shall set a date for determining the
stockholders of record entitled to notice of and to vote at the Special Meeting
in accordance with the Company's Articles of Incorporation and By-laws and with
applicable law. At the Offeror's request, the Company shall include in any
proxy soliciting material prepared by it in
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<PAGE> 30
connection with the Special Meeting proxy soliciting material submitted by the
Offeror; PROVIDED, HOWEVER, that the Offeror shall by written agreement with
the Company contained in or delivered with such request have indemnified the
Company against any and all liabilities resulting from any misstatements,
misleading statements and omissions contained in the Offeror's proxy soliciting
material and have agreed to pay the Company's incremental costs incurred as a
result of including such material in the Company's proxy soliciting material.
Notwithstanding the foregoing, no Special Meeting shall be held from and after
such time as any Person becomes an Acquiring Person or an Adverse Person, and
any Special Meeting scheduled prior to such time and not theretofore held shall
be cancelled.
(ii) If at the Special Meeting the Resolution receives the
affirmative vote of a majority of the shares of Voting Stock outstanding as of
the record date of the Special Meeting, then all of the Rights shall be
redeemed by such stockholder action at the Redemption Price, effective
immediately prior to the consummation of any tender offer (provided that such
tender offer is consummated prior to 60 days after the date of the Special
Meeting) pursuant to which any Person offers to purchase all of the shares of
Voting Stock held by Persons other than such Person and its Affiliates at a
price per share in cash equal to or greater than the price contained in the
Resolution approved at the Special Meeting; PROVIDED, HOWEVER, that the Rights
shall not be redeemed at any time from and after such time as any Person
becomes an Acquiring Person or an Adverse Person.
(iii) Nothing contained in this subsection (b) shall be
deemed to be in derogation of the obligation of the Board of Directors of the
Company to exercise its fiduciary duty. Without limiting the foregoing,
nothing contained herein shall be construed to suggest or imply that the Board
of Directors shall not be entitled to reject any Offer, or to recommend that
holders of shares of Common Stock reject any tender offer, or to take any other
action (including, without limitation, the commencement, prosecution, defense
or settlement of any litigation and the submission of additional or alternative
Offers or other proposals to the Special Meeting) with respect to any Offer or
any tender offer that the Board of Directors believes is necessary or
appropriate to the exercise of such fiduciary duty.
(iv) Nothing in this subsection (b) shall be construed as
limiting or prohibiting the Company or any Offeror from proposing or engaging
in any acquisition, disposition or other transfer of any securities of the
Company, any merger or consolidation involving the Company, any sale or other
transfer of assets of the Company, any liquidation, dissolution or winding-up
of the Company, or any other action by the Company or such Offeror; PROVIDED,
HOWEVER, that the holders of Rights shall have the rights set forth in this
Agreement with respect to any such acquisition, disposition, transfer, merger,
consolidation, sale, liquidation, dissolution, winding-up, business
combination, transaction or action.
(c) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to Section 23(a)(i),
or upon the effectiveness of the redemption of the Rights pursuant to Section
23(b), and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of the Rights shall be to receive the Redemption Price. In
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<PAGE> 31
the case of a redemption permitted only under Section 23(a)(ii), the right to
exercise the Rights will terminate and represent only the right to receive the
Redemption Price: (i) prior to commencement of the Subscription Period, only
after ten Business Days following the giving of notice of such redemption to
the holders of such Rights; and (ii) after commencement of the Subscription
Period, upon the later of ten Business Days following the giving of such notice
or the expiration of the Subscription Period. Within ten days after the action
of the Board of Directors ordering any such 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 all such holders at their last
addresses as they appear upon the registry books of the Company or the Rights
Agent or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of
the Redemption Price will be made.
The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights and (ii) mailing payment of
the Redemption Price to the registered holders of the Rights at their last
addresses as they appear on the registry books of the Company or the Rights
Agent, or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Stock, and upon such action, all outstanding
Rights Certificates shall be null and void without any further action by the
Company.
Section 24. EXCHANGE. (a) The Board of Directors of the Company
may, at its option, at any time after any Person becomes an Acquiring Person or
an Adverse Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one
Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Stock for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry
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<PAGE> 32
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Stock
for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of Common
Stock or to distribute certificates which evidence fractional Common Stock. In
lieu of such fractional Common Stock, the Company shall pay to the registered
holders of the Rights Certificates with regard to which such fractional Common
Stock would otherwise be issuable an amount in cash equal to the same fraction
of the Current Market Price.
Section 25. INDEMNIFICATION OF CORPORATE OFFICERS. (a) The Company
shall, and hereby does, indemnify its officers for, and hold them harmless
against, any loss, liability, or expense, incurred without negligence, bad
faith or willful misconduct on the part of such officers, for any acts or
omissions by such officers in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any
claim of liability arising therefrom, directly or indirectly, and will promptly
reimburse such officers for any legal or other expenses reasonably incurred in
investigating or defending any such loss, expense, claim, damage or liability.
(b) The Company's officers shall be protected by the indemnity
provided in this Section 25 and shall incur no liability for or in respect to
any action taken, suffered or omitted by any of them in connection with their
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
or assignment of transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by such officer to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons. The
indemnification provided to the officers of the Company pursuant to this
Section 25, shall be in addition to, and not a limitation upon, any and all
other forms of indemnification which have been or may be provided for these
officers.
Section 26. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders of
Common Stock or to make any other distribution to the holders of Common Stock
(other than a regular periodic cash dividend at a rate not in excess of 125% of
the rate of the greatest regular periodic cash dividend paid during the
previous two-year period), or (ii) to offer to the holders of Common Stock
rights or warrants to subscribe for or to purchase any additional shares of
Common
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<PAGE> 33
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
subsidiaries to effect any sale or 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 (v) to effect the
liquidation, dissolution or winding-up of the Company, then, in each such case,
the Company shall give to the Rights Agent and to each holder of a Rights
Certificate, in accordance with Section 27 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding-up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least 20 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock, whichever shall be the earlier.
(b) Upon the occurrence of an event giving rise to the
Subscription Rights or Merger Rights, the Company or Principal Party, as the
case may be, shall as soon as practicable thereafter give to the Rights Agent
and to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 27 hereof, a notice of the occurrence of such event and
the consequences thereof to holders of Rights under Sections 11(a) or 12(a)
hereof, as the case may be.
Section 27. 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 sent
by first-class mail, postage prepaid, addressed as follows:
The Parkway Company
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Attention: Chief Financial Officer.
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (and,
prior to the Distribution Date, the Common Stock) will be sufficiently given or
made if sent by first-class
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<PAGE> 34
mail, postage prepaid, addressed as follows (until another address is filed in
writing with the Company):
Society National Bank
127 Public Square, 15th Floor
Cleveland, Ohio 44114
Attention: Shareholder Services
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company or the Rights Agent, as the case may be. The Company
shall deliver a copy of any notice or demand it delivers to the holder of any
Rights Certificate to the Rights Agent and the Rights Agent shall deliver a
copy of any notice or demand it delivers to the holder of any Rights
Certificate to the Company.
Section 28. SUPPLEMENTS AND AMENDMENTS. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) prior
to the Distribution Date, to change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable, or (iv) following
the Distribution Date, to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates.
Section 29. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, the Common
Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the
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<PAGE> 35
State of Texas and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. EXECUTION OF COUNTERPARTS. This Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
THE PARKWAY COMPANY
Attest:
___________________ By:____________________________________
Name: Leland R. Speed
Name: Title: Chief Executive Officer
Title:
SOCIETY NATIONAL BANK,
AS RIGHTS AGENT
By:____________________________________
Name:
Title:
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<PAGE> 36
EXHIBIT A
---------
[Form of Rights Certificate]
Certificate No. R-
_____________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 6, 2005 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR ADVERSE PERSONS OR ANY ASSOCIATE OR
AFFILIATE OF ACQUIRING PERSONS OR ADVERSE PERSONS (AS THOSE TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS
OR BECAME AN ACQUIRING PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.1
Rights Certificate
------------------
THE PARKWAY COMPANY
This certifies that ______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof,
____________________
1 The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding sentence.
<PAGE> 37
subject to the terms, provisions and conditions of the Rights Agreement dated
as of September 7, 1995 (the "Rights Agreement") by and among The Parkway
Company, a Texas corporation (the "Company"), and Society National Bank, as
Rights Agent, to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Jackson, Mississippi time) on September 6, 2005 at the principal corporate
executive office of the Company or at the offices of the Rights Agent
designated for such purpose, one fully paid, nonassessable share of Common
Stock (the "Common Stock") of the Company, at a purchase price of $60.00 per
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of September 7, 1995. As provided in the Rights Agreement, the
Purchase Price, the type of security, and the number of shares of Common Stock
which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the above-mentioned office of the Company or the
principal shareholder services office of the Rights Agent and are also
available upon written request to the Company or the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal executive office of the Company or the
principal shareholder services office of the Rights Agent may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised (other than pursuant to Section
11(a) of the Rights Agreement) in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised. If this Rights Certificate shall be
exercised in whole or in part pursuant to Section 11(a) of the Rights
Agreement, the holder shall be entitled to receive this Rights Certificate duly
marked to indicate that such exercise has occurred as set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right. Subject to the provisions of
the Rights Agreement, the Company, at its
A-2
<PAGE> 38
option, may elect to mail payment of the redemption price to the registered
holder of the Right at the time of redemption, in which event this Rights
Certificate may become void without any further action by the Company.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof of a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been executed by the Company.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ___________________
THE PARKWAY COMPANY
ATTEST:
__________________ By:_____________________________
President
A-3
<PAGE> 39
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _______ hereby sells, assigns and transfers unto _________
_____________________________________________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________
_____________________________________ This Rights Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint ______________________ as attorney to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _________________, 19__
___________________________________
Signature
___________________________________
Signature
Signature Guaranteed:
___________________________
The surrendered forms must be properly endorsed and the signature of
the registered holder on the forms must correspond with the name as written
upon the face of the forms in every particular and must be guaranteed by a
financial institution (including most banks, savings and loan associations and
brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program, the Stock Exchanges Medallion Program or the New York Stock
Exchange Medallion Signature Program.
A-4
<PAGE> 40
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights Certificate pursuant to
Section 11(a) of the Rights Agreement.)
To: ___________________________
The undersigned hereby irrevocably elects to exercise __________Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable the exercise of the Rights and requests that certificates for such
shares be issued in the name of:
_____________________________________________________________________________
(Please insert social security or other identifying number)
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
_____________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a) of the Rights Agreement
shall be returned to the undersigned unless such person requests that the
Rights Certificates registered in the name of and delivered to:
_____________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated: ________________, 19__
_____________________________________
Signature
Signature Guaranteed:
____________________________ _____________________________________
Signature
A-5
<PAGE> 41
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person, an Adverse Person or an Affiliate or Associate of
any such Acquiring Person or Adverse Person (as each such terms are
defined in the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or Adverse Person or Affiliate
or Associate of any such Acquiring Person or Adverse Person.
Dated: _____________, 19__ ___________________________
Signature
___________________________
Signature
NOTICE
------
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
A-6
<PAGE> 42
EXHIBIT B
---------
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On September 7, 1995 the Board of Directors of The Parkway Company (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Company Common Stock to shareholders of record at the close of
business on September 29, 1995. The description and terms of the Rights are
set forth in a Rights Agreement by and among the Company and Society National
Bank, as Rights Agent, dated as of September 7, 1995 (the "Agreement") adopted
by the Board of Directors. Subject to becoming exercisable as described below,
each Right entitles its registered holder to purchase from the Company one
share of Common Stock at a Purchase Price of $60.00, subject to adjustment.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock on the Distribution Date, which will occur on the earliest of (i) the
date of the Company's public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 20% or more of the outstanding shares
of Common Stock (the "Stock Acquisition Date"), (ii) 10 days following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 30% or more of the outstanding shares of Common
Stock or (iii) 10 days after the Board of Directors of the Company shall
declare any Person to be an "Adverse Person," as described below.
To declare a person to be an "Adverse Person" under the Agreement
requires a determination by the Board of Directors of the Company that such
person, alone or together with its affiliates and associates, has become the
beneficial owner of an amount of Common Stock which the Board determines to be
substantial (which amount shall in no event be less than 15% of the shares of
Common Stock then outstanding) and a determination by the Board members who are
not officers of the Company that (a) such beneficial ownership by such person
is intended to cause the Company to repurchase any of the Common Stock
beneficially owned by such person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to
provide such person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term interests of the
Company and its shareholders would not be served by taking such action or
entering into such transactions or series of transactions at that time or (b)
such beneficial ownership is causing or reasonably likely to cause a material
adverse impact on the business or prospects of the Company (including, but not
limited to, impairment of relationships with tenants, customers or regulators
or impairment of the Company's ability to maintain its competitive position).
B-1
<PAGE> 43
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
September 29, 1995, will contain a legend incorporating the Agreement by
reference, but existing Common Stock certificates will also incorporate the
Agreement notwithstanding the absence of such a legend, and (iii) the surrender
for transfer of any certificate for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. SHAREHOLDERS NEED NOT SURRENDER THEIR
EXISTING STOCK CERTIFICATES TO OBTAIN THE BENEFITS OF THE AGREEMENT.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 6, 2005, unless earlier redeemed
by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. All shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event any person becomes an Acquiring Person, each holder of a
Right will have the right to receive, upon exercise of the Right and payment of
the Purchase Price, Common Stock (or, if sufficient Common Stock is unavailable
and subject to certain limitations, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right
(referred to as the "Subscription Right"). The Subscription Right is
exercisable during the 60-day period following the later of the Stock
Acquisition Date or the effective date of a registration statement covering the
Common Stock (or other securities, if applicable) subject to the Subscription
Right (referred to as the "Subscription Period"). Notwithstanding any of the
foregoing, all Rights that are, or (under certain circumstances specified in
the Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
For example, at a Purchase Price of $60 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following the Stock
Acquisition Date would entitle its holder to purchase $120 worth of Common Stock
(or other consideration, as noted above) for $60. Assuming that each share of
Common Stock had a value of $30 at such time, the holder of each valid Right
would be entitled to purchase four shares of Common Stock for $60.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company engages in a merger or other business combination transaction
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have
B-2
<PAGE> 44
the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right (referred to
as the "Merger Right").
The Purchase Price payable, and the number of shares of Common Stock
(or the number and kind of other securities or property, as the case may be)
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current market
price of the Common Stock, or (iii) upon the distribution to holders of the
Common Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
No adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. The Company is not
required to issue fractional shares of Common Stock and in lieu thereof an
adjustment in cash may be made based on the market price of the Common Stock on
the last trading date prior to the date of exercise.
At any time prior to the earlier of the Stock Acquisition Date or the
Expiration Date, the Board of Directors may redeem the outstanding Rights in
whole, but not in part, at a redemption price of $.01 per Right (the
"Redemption Price"). In addition, the Board of Directors may redeem the Rights
after the Stock Acquisition Date but prior to an event which gives rise to the
exercisability of the Merger Right if (1) prior to the Subscription Period, the
Acquiring Person shall have transferred a sufficient number of shares of Common
Stock such that such Person owns 5% or less of the outstanding Common Stock
(and there are no other Acquiring Persons) and such transfers did not involve
the Company; (2) in connection with a merger or business combination involving
the Company where all shareholders are treated alike and not involving the
Acquiring Person or any entity in which the Acquiring Person has an interest;
or (3) following the Subscription Period if there are no Acquiring Persons.
Redemption of outstanding Rights may also occur under the following
circumstances: If a bidder who does not beneficially own more than 4.9% of the
Common Stock (and who has not within the past year owned more than 4.9% or more
of the Common Stock) proposes to acquire all of the Common Stock for cash at a
price which a nationally recognized investment banker selected by such bidder
states in writing is fair, and such bidder has obtained written financing
commitments (or otherwise has financing in hand) and complies with certain
procedural requirements, then the Company, upon the request of the bidder, will
hold a special shareholder meeting to vote on a resolution requesting the Board
of Directors to redeem the Rights. If a majority of the outstanding shares
entitled to vote on the proposal votes in favor of such resolution, then for a
period of 60 days after such meeting the Rights will be automatically redeemed
at the Redemption Price immediately prior to the consummation of any tender
offer for all of such shares at a price per share in cash equal to or greater
than the price offered by such bidder; provided, however, that no
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redemption will be permitted or required after a person has become an Acquiring
Person or an Adverse Person.
Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be
to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights to change or
supplement the provisions of the Agreement in any manner which the Board deems
necessary or desirable, except that, after the Distribution Date, no amendment
may be effected which would adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Copies of the Agreement have been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
September 8, 1995. Copies of the Agreement are available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Agreement, which
is incorporated herein by reference.
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