RIGHTS AGREEMENT
dated as of
October 9, 2000
between
FLORIDA EAST COAST INDUSTRIES, INC.
and
FIRST UNION NATIONAL BANK,
as Rights Agent
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TABLE OF CONTENTS
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<S> <C> <C>
PAGE
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SECTION 1. Definitions.........................................................................1
SECTION 2. Appointment of Rights Agent.........................................................6
SECTION 3. Issue of Right Certificates.........................................................6
SECTION 4. Form of Right Certificates..........................................................8
SECTION 5. Countersignature and Registration...................................................8
SECTION 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates..................................9
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights......................10
SECTION 8. Cancellation and Destruction of Right Certificates.................................11
SECTION 9. Reservation and Availability of Capital Stock......................................12
SECTION 10. Preferred Stock Record Date.......................................................13
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights..........................................................13
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares........................22
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power................................................................23
SECTION 14. Fractional Rights and Fractional Shares...........................................25
SECTION 15. Rights of Action..................................................................27
SECTION 16. Agreement of Right Holders........................................................27
SECTION 17. Right Certificate Holder Not Deemed a Stockholder.................................28
SECTION 18. Concerning the Rights Agent.......................................................28
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agents.......................................................................29
SECTION 20. Duties of Rights Agent............................................................29
SECTION 21. Change of Rights Agent............................................................32
SECTION 22. Issuance of New Right Certificates................................................33
SECTION 23. Redemption........................................................................34
SECTION 24. Exchange..........................................................................34
SECTION 25. Notice of Proposed Actions........................................................35
SECTION 26. Notices...........................................................................36
SECTION 27. Supplements and Amendments........................................................37
SECTION 28. Successors........................................................................37
SECTION 29. Determinations and Actions by the Board, etc......................................37
SECTION 30. Benefits of this Agreement........................................................38
SECTION 31. Severability......................................................................38
SECTION 32. Governing Law.....................................................................38
SECTION 33. Counterparts......................................................................38
SECTION 34. Descriptive Headings..............................................................38
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Exhibit A - Form of Certificate of Designation of Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the Stockholder Rights Plan
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RIGHTS AGREEMENT
AGREEMENT dated as of October 9, 2000 between Florida East Coast
Industries, Inc., a Florida corporation (the "Company"), and First Union
National Bank, a national banking institution, as Rights Agent (the "Rights
Agent"),
W I T N E S S E T H
WHEREAS, on May 16, 2000 the Board of Directors of the Company authorized
and declared effective on October 9, 2000 a dividend of one preferred stock
purchase right (a "Right") for each share of Common Stock (as hereinafter
defined) outstanding at the close of business on October 9, 2000 (the "Record
Date") and has authorized the issuance, upon the terms and subject to the
conditions hereinafter set forth, of one Right (subject to adjustment) in
respect of each share of Common Stock issued after the Record Date, each Right
representing the right to purchase, upon the terms and subject to the
conditions hereinafter set forth, one one-hundredth (subject to adjustment) of
a share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. The following terms, as used herein, have the
following meanings:
"Acquiring Person" means any Person who, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 39% or more of the
total shares of Common Stock then outstanding or 62% or more of the shares of
Class B Common Stock then outstanding, but shall not include an Exempt Person;
provided, however, that (a) if the Board determines in good faith that a Person
who would otherwise be an "Acquiring Person" became the Beneficial Owner of a
number of shares of Common Stock such that the Person would otherwise qualify
as an "Acquiring Person" inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned a percentage of Common
Stock or Class B Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership of Common Stock or Class B Common Stock but had no actual
knowledge of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement unless and until such
Person shall have failed to divest itself, as soon as
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practicable (as determined, in good faith, by the Board of Directors of the
Company), of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer otherwise qualify as an "Acquiring
Person"; and (b) no Person shall become an "Acquiring Person" as the result of
(i) any acquisition of shares of Common Stock by the Company which, by reducing
the number of shares of Common Stock outstanding, increases the proportionate
number of shares of Common Stock beneficially owned by such Person to 39% or
more of the total shares of Common Stock then outstanding or 62% or more of the
shares of Class B Common Stock then outstanding, (ii) being the transferee of
any shares of Common Stock from either Charity which, but for any acquisition
of shares of Common Stock by the Company, would not have caused such transferee
to become an "Acquiring Person"; provided, however, that if a Person shall
become the Beneficial Owner of 39% or more of the total shares of Common Stock
then outstanding or 62% or more of the shares of Class B Common Stock then
outstanding by reason of such share acquisition by the Company or so being a
transferee of either Charity and shall thereafter become the Beneficial Owner
of any additional shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock), then such
Person shall be deemed to be an "Acquiring Person" unless upon becoming the
Beneficial Owner of such additional shares of Common Stock such Person does not
beneficially own 39% or more of the total shares of Common Stock then
outstanding or 62% or more of the shares of Class B Common Stock then
outstanding or (iii) such Person acquiring Common Stock pursuant to a Qualified
Offer provided that this clause (iii) shall cease to apply if such person
thereafter becomes the Beneficial Owner of any additional shares of Common
Stock other than pursuant to such Qualified Offer).
"Affiliate" and "Associate" have the respective meanings ascribed to such
terms in Rule 12b-2 under the Exchange Act as in effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
have "Beneficial Ownership" of and to "beneficially own", any securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to Rule
13d-3 under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
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(i) the right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, 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 or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase, (B) securities which such
Person has a right to acquire upon the exercise of Rights at any time
prior to the time that any Person becomes an Acquiring Person or (C)
securities issuable upon the exercise of Rights from and after the
time that any Person becomes an Acquiring Person if such Rights were
acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a)
or Section 22 hereof ("Original Rights") or pursuant to Section 11(i)
or Section 11(p) with respect to an adjustment to Original Rights; or
(ii) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or the
passage of time or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or otherwise; provided that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any security under this clause (ii) 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 or consent given in response to a public proxy
or consent solicitation made pursuant to the applicable 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
any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) and with respect to
which such Person or any of its Affiliates or Associates has any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or
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consent as described in subparagraph (b)(ii) immediately above) or
disposing of any such securities;
provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned", including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person.
"Board" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Charities" means each of the Alfred I. Dupont Testamentary Trust and the
Nemours Foundation (each a "Charity").
"Class A Common Stock" means the Class A Common Stock, no par value, of
the Company.
"Class B Common Stock" means the Class B Common Stock, no par value, of
the Company.
"Close of business" on any given date means 5:00 P.M., New York City time,
on such date; provided that if such date is not a Business Day "close of
business" means 5:00 P.M., New York City time, on the next succeeding Business
Day.
"Common Stock" means the Class A Common Stock and the Class B Common
Stock, except that, when used with reference to any Person other than the
Company, "Common Stock" means the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
"Distribution Date" means the earlier of (a) the close of business on the
tenth day after the Stock Acquisition Date and (b) the close of business on the
tenth Business Day (or such later day as may be designated prior to the
occurrence of a Section 11(a)(ii) Event by action of the Board) after the date
of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person; provided,
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however, that if either of such dates occurs after the date of this Agreement
and on or prior to the Record Date, then the Distribution Date shall be the
Record Date.
"Exempt Person" shall mean the Company or any Subsidiary of the Company,
in each case including, without limitation, in its fiduciary capacity, or any
employee benefit plan of the Company or of any Subsidiary of the Company, or
any entity or trustee holding Common Stock for or pursuant to the terms of any
such plan or for the purpose of funding any such plan or funding other employee
benefits for employees of the Company or of any Subsidiary of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means the earlier of (a) the Final Expiration Date, (b)
the time at which all Rights are redeemed as provided in Section 23 or
exchanged as provided in Section 24 and (c) the time at which there are no
longer any shares of Class B Common Stock outstanding.
"Final Expiration Date" means the close of business on October 10, 2010.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization.
"Preferred Stock" means the Series A Participating Cumulative Preferred
Stock, no par value , of the Company, having the terms set forth in the form of
certificate of designation attached hereto as Exhibit A.
"Purchase Price" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one one-hundredth of a share
of Preferred Stock (subject to adjustment as provided herein) upon exercise of
a Right, which price shall initially be $250.00.
"Qualified Event" means any event that would have constituted a Section
11(a)(ii) Event but for the fact that such event involved a Qualified Offer.
"Qualified Offer" means any public tender offer or public exchange offer
to purchase all, but not less than all, of the outstanding shares of Common
Stock pursuant to which all holders of Common Stock, regardless of the class of
Common Stock held, are offered the identical per share consideration.
"Section 11(a)(ii) Event" means any event described in the first clause of
Section 11(a)(ii).
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"Section 13 Event" means any event described in clauses (x), (y) or (z) of
Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public announcement
(including the filing of a report on Schedule 13D under the Exchange Act (or
any comparable or successor report)) by the Company or an Acquiring Person
indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which securities or
other ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any Section 13
Event.
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 in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. The Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such Co-Rights Agent. If the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agent shall be as the Company shall determine.
SECTION 3. Issue of Right Certificates. (a) Prior to the Distribution
Date, (i) the Rights will be evidenced (subject to the penultimate sentence of
this Section 3(a)) by the certificates for the Common Stock and not by separate
Right Certificates (as hereinafter defined) and the registered holders of the
Common Stock shall be deemed to be the registered holders of the associated
Rights, and (ii) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock. As soon as practicable after
the Record Date, the Company will send a copy of the Summary of Rights
substantially in the form of Exhibit C hereto, by first-class, postage prepaid
mail, to each record
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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. With respect to
certificates for Common Stock outstanding as of the Record Date, prior to the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with a copy of the Summary of
Rights. Prior to the Distribution Date (or, if earlier, the Expiration Date),
the surrender for transfer of any certificate for Common Stock outstanding on
the Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common Stock
represented thereby.
(b) As soon as practicable after the Company has notified the Rights Agent
of the occurrence of the Distribution Date, the Rights Agent 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 (other than any
Acquiring Person or any Affiliate or Associate thereof), at the address of such
holder shown on the records of the Company, one or more Right Certificates
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. If an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11 the Company shall, at the
time of distribution of the Right Certificates, make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)) so that
Right Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. From and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (i) shall, with respect to shares of Common Stock
so issued or sold (x) pursuant to the exercise of stock options or under any
employee plan or arrangement or (y) upon the exercise, conversion or exchange
of other securities issued by the Company prior to the Distribution Date and
(ii) may, in any other case, if deemed necessary or appropriate by the Board,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided that no such Right Certificate
shall be issued if, and to the extent that, (i) the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued or (ii) appropriate adjustment shall otherwise have been made
in lieu of the issuance thereof.
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(d) Certificates issued for Common Stock after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences certain Rights as set forth in a Rights
Agreement between Florida East Coast Industries, Inc. and First Union
National Bank, as Rights Agent, dated as of October 9, 2000 and as amended
from time to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. 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, as set forth in the Rights Agreement, such Rights may be
evidenced by separate certificates and no longer be evidenced by this
certificate, may be redeemed or exchanged or may expire. As set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is, was
or becomes an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held by
or on behalf of such Person or by any subsequent holder, may be null and
void.
SECTION 4. Form of Right Certificates. The certificates evidencing the
Rights (and the forms of assignment, election to purchase and certificates to
be printed on the reverse thereof) (the "Right Certificates") shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. The Right Certificates, whenever distributed, shall be dated as of the
Record Date.
SECTION 5. Countersignature and Registration. (a) The Right 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. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose
manual or facsimile signature is affixed to the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and
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issuance and delivery by the Company, such Right Certificates may,
nevertheless, be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office or offices designated as the place for
surrender of Right Certificates upon exercise, transfer or exchange, books for
registration and transfer of the Right Certificates. Such books shall show with
respect to each Right Certificate the name and address of the registered holder
thereof, the number of Rights indicated on the certificate and the certificate
number.
SECTION 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. (a) At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth in
this Agreement, be transferred or exchanged for another Right Certificate or
Certificates evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or
exchange any Right Certificate or Certificates shall surrender such Right
Certificate or Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed) to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Certificates until the registered holder of
the Rights has complied with the requirements of Section 7(e). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject to
Sections 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so requested. The Company may
require payment of a sum sufficient to cover any transfer tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if
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mutilated, the Company will issue and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d), 7(e), 9(c), 11(a), 23 and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of America
by certified check or bank draft payable to the order of the Company) of the
aggregate Purchase Price with respect to the Rights then to be exercised and an
amount equal to any applicable transfer tax or other governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and subject to
Section 20(k), the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Stock (or make available, if the
Rights Agent is the transfer agent therefor) certificates for the total number
of one one-hundredths of a share of Preferred Stock to be purchased (and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests) or (B) if the Company shall have elected to deposit the shares
of Preferred Stock issuable upon exercise of the Rights with a depositary
agent, requisition from the depositary agent depositary receipts representing
interests in such number of one one-hundredths of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the depositary agent to
comply with such request, (ii) requisition from the Company the amount of cash,
if any, to be paid in lieu of issuance of fractional shares in accordance with
Section 14 and (iii) after receipt of such certificates or depositary receipts
and cash, if any, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or receipts
registered in such name or names as may be designated by such holder). If the
Company is obligated to deliver Common Stock, other securities or assets
pursuant to this Agreement, the Company will make all arrangements necessary so
that such other securities and assets are available for delivery by the Rights
Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
the number of Rights remaining unexercised shall be issued by the Rights Agent
and
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delivered to, or upon the order of, the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(d)
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(d) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates and Associates or any
transferee of any of them hereunder.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of any
purported transfer pursuant to Section 6 or exercise pursuant to this Section 7
unless such registered holder (i) shall have completed and signed the
certificate contained in the form of assignment or election to purchase, as the
case may be, set forth on the reverse side of the Right Certificate surrendered
for such transfer or exercise, as the case may be, (ii) shall not have
indicated an affirmative response to clause 1 or 2 thereof and (iii) shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
SECTION 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent,
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shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall
cancel, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of 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, all securities reserved for such issuance to be listed on any such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities Act with
respect to the securities issuable upon exercise of the Rights, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause
9(c)(i), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any such provision of this Agreement to the contrary, the
Rights shall not be exercisable for securities in any jurisdiction if the
requisite
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qualification in such jurisdiction shall not have been obtained, such exercise
therefor shall not be permitted under applicable law or a registration
statement in respect of such securities shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all one one-hundredths of a share of Preferred
Stock issuable upon exercise of Rights shall, at the time of delivery of the
certificates for such securities (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and other governmental
charges which may be payable in respect of the issuance or delivery of the
Right Certificates and of any certificates for Preferred Stock upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax or other governmental charge which may be payable in respect of
any transfer involved in the issuance or delivery of any Right Certificates or
of any certificates for Preferred Stock to a Person other than the registered
holder of the applicable Right Certificate, and prior to any such transfer,
issuance or delivery any such tax or other governmental charge shall have been
paid by the holder of such Right Certificate or it shall have been established
to the Company's satisfaction that no such tax or other governmental charge is
due.
SECTION 10. Preferred Stock Record Date. Each Person (other than the
Company) in whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of such Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any transfer
taxes or other governmental charges) was made; provided that if the date of
such surrender and payment is a date upon which the transfer books of the
Company relating to the Preferred Stock 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 applicable transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company except as
provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. (a) (i) If the Company shall at any time after the date of
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this Agreement (A) pay a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock into a greater
number of shares, (C) combine the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger involving the Company), the Purchase
Price in effect immediately prior to the record date for such dividend or the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or other capital stock issuable on
such date shall be proportionately adjusted so that each holder of a Right
shall (except as otherwise provided herein, including Section 7(d)) thereafter
be entitled to receive, upon exercise thereof at the Purchase Price in effect
immediately prior to such date, the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when the
applicable transfer books of the Company were open, such holder would have been
entitled to receive upon such exercise and by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which requires
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement,
become an Acquiring Person, then each holder of a Right shall (except
as otherwise provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the Purchase Price in
effect immediately prior to the first occurrence of a Section
11(a)(ii) Event, in lieu of Preferred Stock, such number of duly
authorized, validly issued, fully paid and nonassessable shares of
Class B Common Stock (such shares being referred to herein as the
"Adjustment Shares") as shall be equal to the result obtained by
dividing
(x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the number of one one-hundredths
of a share of Preferred Stock for which a Right was
exercisable immediately prior to such first occurrence
(such product being thereafter referred to as the "Purchase
Price" for each Right) by
(y) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of Class B Common Stock on the date of
such first occurrence;
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<PAGE>
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (ii)(x)) and the number of Adjustment Shares so receivable
upon exercise of a Right shall, following the occurrence of such Section
11(a)(ii) Event, be subject to further adjustment as appropriate in accordance
with Section 11(f). From and after the occurrence of a Section 13 Event, any
Rights that theretofore have not been exercised pursuant to this Section
11(a)(ii) shall thereafter be exercisable only in accordance with Section 13
and not pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Class B Common Stock which are
authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance other than upon exercise of the
Rights is not sufficient to permit the exercise in full of the Rights
in accordance with Section 11(a)(ii), the Company shall, with respect
to each Right, make adequate provision to substitute for the
Adjustment Shares, upon payment of the Purchase Price then in effect,
(A) (to the extent available) Class B Common Stock and then, (B) (to
the extent available) such number of shares of Class A Common Stock
as are equivalent in value to the Adjustment Shares, and then, if
necessary, (C) (to the extent available) such number of one
one-hundredths of a share of Preferred Stock as are then equivalent
in value to the value of the Adjustment Shares, and then, if
necessary, (D) other equity or debt securities of the Company, cash
or other assets, a reduction in the Purchase Price or any combination
of the foregoing, having an aggregate value (based upon the advice of
a nationally recognized investment banking firm) equal to the value
of the Adjustment Shares; provided that (x) the Company may, and (y)
if the Company shall not have made adequate provision as required
above to deliver value within 30 days following the first occurrence
of a Section 11(a)(ii) Event (the "Substitution Period"), then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, (1) (to the extent available) Class B Common Stock and then
(2) (to the extent available) Class A Common Stock and then, if
necessary, (3) (to the extent available) one-hundredths of a share of
Preferred Stock and then, if necessary, (4) other equity or debt
securities of the Company, cash or other assets or any combination of
the foregoing, having an aggregate value (based upon the advice of a
nationally recognized investment banking firm) equal to the excess of
the value of the Adjustment Shares over the Purchase Price. To the
extent that the Company determines that some action is to be taken
pursuant to the preceding sentence, the Company (X) shall provide,
subject to Section 7(d), that such action shall apply uniformly to
all outstanding Rights and (Y) may suspend the exercisability of the
Rights until the expiration of the
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Substitution Period in order to decide the appropriate form and value
of any consideration to be delivered as referred to in the preceding
sentence. If any such suspension occurs, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Class A Common Stock or Class B
Common Stock, as the case may be, shall be the current market price
per share of the relevant class of Common Stock (as determined
pursuant to Section 11(d)) on the date of the first occurrence of a
Section 11(a)(ii) Event; any common stock equivalent shall be deemed
to have the same value as the Class A Common Stock on such date; and
the value of other securities or assets shall be determined pursuant
to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any conversion
or exercise price) less than the current market price (as determined pursuant
to Section 11(d)) per share of Preferred 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 date by a
fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate price (taking account of any conversion or exercise
price) of the total number of shares of Preferred Stock (and/or equivalent
preferred stock) so to be offered would purchase at such current market price
and the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock (and/or equivalent preferred stock) so to be offered. In case
such subscription price may be paid by delivery of 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, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. Shares of Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and if such rights, options 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.
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<PAGE>
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger involving the Company) of
evidences of indebtedness, equity securities other than Preferred Stock, assets
(other than a regular periodic cash dividend out of the earnings or retained
earnings of the Company) or rights, options or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price (as determined pursuant to Section 11(d)) per
share of Preferred Stock on such record date, less the value (as determined
pursuant to Section 11(d)(iii)) of such evidences of indebtedness, equity
securities, assets, rights, options or warrants so to be distributed with
respect to one share of Preferred Stock and the denominator of which shall be
such current market price per share of Preferred Stock. Such adjustment shall
be made successively whenever such a record date is fixed, and if such
distribution is not so made, 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.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), the "current market price"
per share of Class A Common Stock or Class B Common Stock, as the case may be,
on any date shall be deemed to be the average of the daily closing prices per
share of such class of such Common Stock for the 10 consecutive Trading Days
immediately following such date; and for purposes of computations made pursuant
to Section 14, the "current market price" per share of Class A Common Stock or
Class B Common Stock for any Trading Day shall be deemed to be the closing
price per share of the relevant class of Common Stock for such Trading Day;
provided that if the current market price per share 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 exercisable for or convertible into
shares of such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and prior to the
expiration of the requisite 30 Trading Day or 10 Trading Day period, as set
forth above, 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
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<PAGE>
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use 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. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board (or, if at the
time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm) shall be used. If the Common Stock is not
publicly held or not so listed or traded, the "current market price" per share
means the fair value per share as determined in good faith by the Board, or, if
at the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm, which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Class A Common Stock in
Section 11(d)(i) (other than the last sentence thereof). If the
current market price per share of Preferred Stock cannot be
determined in such manner, the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to
the Class A Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of Class A Common
Stock (as determined pursuant to Section 11(d)(i) (other than the
last sentence thereof)). If neither the Class A Common Stock nor the
Preferred Stock is publicly held or so listed or traded, the "current
market price" per share of the Preferred Stock shall be determined by
reference to the Class B Common Stock (in the same manner as
described above for the Class A Common Stock). If the Class B Common
Stock is also not publicly held or listed or traded, the "current
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<PAGE>
market price" per share of the Preferred Stock shall be determined in
the same manner as set forth in the last sentence of Section
11(d)(i). For all purposes of this Agreement, the "current market
price" of one one-hundredth of a share of Preferred Stock shall be
equal to the "current market price" of one share of Preferred Stock
divided by 100.
(iii) For the purpose of any computation hereunder, the value of
any securities or assets other than Common Stock or Preferred Stock
shall be the fair value as determined in good faith by the Board, or,
if at the time of such determination there is an Acquiring Person, by
a nationally recognized investment banking firm which determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be.
(f) If at any time, as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right shall be entitled to
receive upon exercise of such Right any shares of capital stock other than
Preferred 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 Preferred Stock contained in
Section 11(a), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and
11(m), and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the Purchase
Price then in effect, the then applicable number of one one-hundredths of a
share of Preferred Stock and other capital stock of the Company issuable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
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<PAGE>
calculations made in Section 11(b) and 11(c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-hundredths
of a share for which a Right was exercisable immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which such Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a share of Preferred Stock issuable upon the
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<PAGE>
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredth of a
share and the number of shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value, if any, of the number of one one-hundredths
of a share of Preferred 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 such number of one one-hundredths of a share of Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock or other capital stock of
the Company, if any, issuable upon such exercise over and above the number of
one one-hundredths of a share of Preferred Stock or other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided 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.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exercisable for Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its Preferred Stock, shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it will not at any time after
the Distribution Date consolidate, merge or otherwise combine with any other
Person if (x) at the time of or immediately after such consolidation, merger or
combination there are any rights, warrants or other instruments or securities
outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded
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by the Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger or combination, the stockholders of a Person who
constitutes, or would constitute, the "Principal Party" for the purposes of
Section 13 shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if at any
time after the date hereof and prior to the Distribution Date the Company shall
(i) pay a dividend on the outstanding shares of either class of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
either class of Common Stock into a larger number of shares or (iii) combine
the outstanding shares of either class of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter as contemplated by Section 3(c),
shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of such class of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of such class of Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total number of
shares of such class 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 such class of Common Stock outstanding immediately following the
occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Stock and
each class of the Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in the manner set forth in Section 26. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of any such adjustment
unless and until it shall have received such a certificate.
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SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. (a) If, following the occurrence of a Section 11(a)(ii) Event or a
Qualified Event, directly or indirectly,
(x) the Company shall consolidate with, merge into, or
otherwise combine with, any other Person, and the Company shall
not be the continuing or surviving corporation of such
consolidation, merger or combination, or
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving
corporation of such merger or combination and, in connection with
such merger or combination, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for other stock or
securities of the Company or any other Person, cash or any other
property,
then, and in each such case, proper provision shall promptly be made so that
(i) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii)
Event, such number of duly authorized, validly issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the
Principal Party (as hereinafter defined), not subject to any rights
of call or first refusal, liens, encumbrances or other claims, as
shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
a Section 11(a)(ii) Event by the number of one one-hundredths
of a share of Preferred Stock for which a Right was
exercisable immediately prior to such first occurrence (such
product being thereafter referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by
(B) 50% of the current market price (determined pursuant
to Section 11(d)(i)) per share of the Common Stock of such
Principal Party on the date of consummation of such
consolidation, merger or combination;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (i)(A)) and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(f) to reflect
any events
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occurring in respect of the Common Stock of such Principal Party after the
occurrence of such consolidation, merger or combination;
(ii) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger or combination,
all the obligations and duties of the Company pursuant to this
Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a)) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger, consolidation or combination, and if no securities are so issued,
the Person that survives or results from such merger, consolidation or
combination provided that, (A) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is and has been
so registered, "Principal Party" shall refer to such other Person; and (B) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks 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.
(c) The Company shall not consummate any such consolidation, merger or
combination unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which are not outstanding or otherwise
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section 13(a) and
13(b) and
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providing that, as soon as practicable after the date of any consolidation,
merger or combination mentioned in Section 13(a), the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise
of the Rights, and will use its best efforts to cause such
registration statement (A) to become effective as soon as practicable
after such filing and (B) to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Expiration Date; and
(ii) 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.
(d) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (x) and (y)
of Section 13(a) if (i) such transaction is consummated with a Person who
acquired shares of Common Stock pursuant to a Qualified Offer (or a wholly
owned subsidiary of any such Person), (ii) the price per share of Common Stock
offered in such transaction is not less than the price per shares of Common
Stock paid to all holders of shares of Common Stock whose share were purchased
pursuant to such Qualified Offer, and (iii) the form of per share consideration
being offered to the remaining holders of shares of Common Stock pursuant to
such transaction is identical to the form of per share consideration paid
pursuant to the Qualified Offer.
SECTION 14. Fractional Rights and Fractional Shares. (a) The Company shall
not be required to issue fractions of Rights, except prior to the Distribution
Date as provided in Section 11(p), or to distribute Right Certificates which
evidence fractional Rights. In lieu of any such fractional Rights, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable an amount in cash
equal to the same fraction of the current market price of a whole Right. For
purposes of this Section 14(a), the current market price of a whole Right shall
be the closing price of a Right for the Trading Day immediately prior to the
date on which such fractional Rights would otherwise have been issuable. The
closing price of a Right for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which the
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Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. If on any
such date no such market maker is making a market in the Rights, the current
market price of the Rights on such date shall be as determined in good faith by
the Board, or, if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are multiples of one one-hundredth
of a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are multiples of one one-hundredth of a share of Preferred
Stock). In lieu of any such fractional shares of Preferred Stock, the Company
shall pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market price of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market price
of one one-hundredth of a share of Preferred Stock shall be one one-hundredth
of the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of any Triggering Event or upon any exchange
pursuant to Section 24, the Company shall not be required to issue fractions of
shares of Class B Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Class B Common Stock. In lieu
of fractional shares of Class B Common Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
or exchanged as herein provided an amount in cash equal to the same fraction of
the current market price of a share of Class B Common Stock. For purposes of
this Section 14(c), the current market price of a share of Class B Common Stock
shall be the closing price of a share of Class B Common Stock (as determined
pursuant to Section 11(d)(i)) for the Trading Day immediately prior to the date
of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section 14.
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SECTION 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
any certificate representing Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent may
deem and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing shares of Common Stock)
is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the certificate representing shares of Common Stock
made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject
to the last sentence of Section 7(d), shall be affected by any notice to
the contrary; and
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(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation;
provided that the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
SECTION 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the shares of capital stock which
may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of
a 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 Section 25), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to pay to
the Rights Agent 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 disbursements and other disbursements incurred in
the execution or administration of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent, its directors, officers, employees and agents for, and to hold
each of them harmless against, any loss, liability, or expense, incurred
without gross 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 administration of this Agreement or the exercise or performance of its
duties hereunder, including the costs and expenses of defending against any
claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
the administration of this Agreement or the exercise or performance of its
duties
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hereunder in reliance upon any Right Certificate or certificate for Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
(c) The indemnity provided in this Section 18 shall survive the expiration
of the Rights, the resignation or removal of the Rights Agent and termination
of this Agreement
SECTION 19. Merger or Consolidation or Change of Name of Rights Agents.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
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conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any "Acquiring
Person" and the determination of "current market price") be proved or
established by the Company prior to taking, suffering or omitting to take
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 the
Chairman of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken, suffered or omitted in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(d)) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for in Sections 3, 11, 13,
23
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or 24, or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after written notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President or any Vice President or the
Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken, suffered or omitted to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in
acting while awaiting instructions. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of
the Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to
such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
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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 shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or to any
holders of Rights resulting from any such act, default, neglect or
misconduct, provided that the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the cases may be,
has either not been completed or indicates an affirmative response to
clause 1 or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or
obligations shall be read into this Agreement against the Rights Agent.
(m) Anything in this Agreement to the contrary notwithstanding, in no
event shall be the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits).
SECTION 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and,
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subsequent to the Distribution Date, to the holders of the Right Certificates
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, having a principal
office in the State of New York, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000 or (b) an Affiliate of a corporation described in clause 21(a).
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and, subsequent to the Distribution Date, mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares of stock issuable upon
exercise of the Rights made in accordance with the provisions of this
Agreement.
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SECTION 23. Redemption. (a) The Company may, at the direction of not less
than 80% of the directors on the Board, or the direction of the holders of not
less than 2/3 of the total outstanding shares of Common Stock (with holders of
Class A Common Stock and holders of Class B Common Stock voting together as a
single class), at any time prior to the earlier of (i) the occurrence of a
Section 11(a)(ii) Event and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board or the shareholders, as the case may be, in
their sole discretion may establish. The Redemption Price shall be payable, at
the option of the Company, in cash, shares of Common Stock, or such other form
of consideration as the Board shall determine.
(b) Immediately upon the action of the Board or the shareholders electing
to redeem the Rights (or at such later time as the Board or the shareholders
may establish for the effectiveness of such redemption), and without any
further action and without any notice, the right to exercise the Rights will
terminate and thereafter the only right of the holders of Rights shall be to
receive the Redemption Price for each Right so held. The Company shall promptly
thereafter give notice of such redemption to the Rights Agent and the holders
of the Rights in the manner set forth in Section 26; provided that the failure
to give, or any defect in, such notice shall not affect the validity of such
redemption. 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.
SECTION 24. Exchange. (a) At any time after the occurrence of a
Section 11(a)(ii) Event, the Board may, at its option, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to Section 7(d)) for shares of Class B Common
Stock at an exchange ratio of one share of Class B 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"). From and after the occurrence
of a Section 13 Event, any Rights that theretofore have not been exchanged
pursuant to this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 and may not be exchanged pursuant to this Section
24(a). The exchange of the Rights by the Board may be made effective at such
time, on such basis and with such conditions as the Board in its sole
discretion may establish.
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(b) Immediately upon the effectiveness of the action of the Board electing
to exchange any Rights pursuant to Section 24(a) and without any further action
and without any notice, the right to exercise such Rights will terminate and
thereafter the only right of a holder of such Rights shall be to receive that
number of shares of Class B Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
promptly thereafter give notice of such exchange to the Rights Agent and the
holders of the Rights to be exchanged in the manner set forth in Section 26;
provided that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. 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 shares of Class B 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 Section 7(d))
held by each holder of Rights.
(c) The Company may at its option substitute, and, in the event that there
shall not be sufficient shares of Class B Common Stock issued but not
outstanding or authorized but unissued to permit the exchange of Rights for
Class B Common Stock ordered in accordance with Section 24(a), the Company
shall substitute to the extent of such insufficiency, for each share of Class B
Common Stock that would otherwise be issuable upon exchange of a Right, a
number of one-one hundredths of a share of Preferred Stock such that the
current market price (determined pursuant to Section 11(d)) of such number of
one-one hundredths of a share of Preferred Stock is equal to the current market
price (determined pursuant to Section 11(d)) of one share of Class B Common
Stock as of the date of such exchange.
SECTION 25. Notice of Proposed Actions. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company),
or (ii) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of outstanding
shares of Preferred Stock) or (iv) to effect any consolidation, merger or
combination with 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 each holder of a Right, to the extent feasible and in accordance
with Section 26, a notice of such proposed action, which shall specify
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the record date for the purposes of any such dividend, distribution or offering
of rights or warrants, or the date on which any such reclassification,
consolidation, merger, combination, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause 25(a)(i) or 25(a)(ii) above at least
20 days prior to the record date for determining holders of the Preferred Stock
entitled to participate in such dividend, distribution or offering, 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
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a public filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this Agreement
and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder of a Right,
in accordance with Section 26, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii) or 13, as the case may be, and (ii) all references in
Section 25(a) to Preferred Stock shall be deemed thereafter to refer to Common
Stock or other capital stock, as the case may be.
SECTION 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right to or on the
Company shall be sufficiently given or made if sent by first-class mail
(postage prepaid) to the address of the Company indicated on the signature page
hereof or such other address as the Company shall specify in writing to the
Rights Agent. Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail (postage prepaid) to the address of the Rights
Agent indicated on the signature page hereof or such other address as the
Rights Agent shall specify in writing to the Company. Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate (or, prior to the Distribution
Date, to the holder of any certificate representing shares of Common Stock)
shall be sufficiently given or made if sent
36
<PAGE>
by first-class mail (postage prepaid) to the address of such holder shown on
the registry books of the Company.
SECTION 27. Supplements and Amendments. For so long as the Rights are then
redeemable, the Company may, with the approval of not less than 80% of the
directors on the Board or with the approval of the holders of not less than 2/3
of the total outstanding shares of Common Stock (with holders of Class A Common
Stock and holders of Class B Common Stock voting together as a single class),
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of certificates representing shares of Common Stock. At any time when the
Rights are no longer redeemable, the Company may, with the approval of not less
than 80% of the directors on the Board, and the Rights Agent shall if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights; provided, however, that no such supplement or amendment
may (a) adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
(b) cause this Agreement again to become amendable other than in accordance
with this sentence, or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment that changes the rights or duties of the Rights Agent
under this Agreement shall be effective without the consent of the Rights
Agent. Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section, the Rights Agent shall execute such supplement
or amendment.
SECTION 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
SECTION 29. Determinations and Actions by the Board, etc. For all purposes
of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock or Class B
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act
as in effect on the date of this Agreement. The Board shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including the
right and power to (i) interpret the provisions of this Agreement and (ii) make
all determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem (with the approval of at least
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<PAGE>
80% of the directors on the Board) or exchange or not to redeem or exchange the
Rights or to amend (with the approval of at least 80% of the directors) the
Agreement).
SECTION 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the certificates representing the shares of Common Stock)
any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of 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 Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Florida and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, except that the rights and
obligations of the Rights Agent shall be governed by the laws of the State of
Florida.
SECTION 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute one and the
same instrument.
SECTION 34. Descriptive Headings. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof.
38
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FLORIDA EAST COAST
INDUSTRIES, INC.
By: /s/ Robert W. Anestis
--------------------------------------
Name: Robert W. Anestis
Title: Chairman, President and Chief
Executive Officer
One Malaga Street
St. Augustine, FL 32084
FIRST UNION NATIONAL BANK
By: /s/ Patrick J. Edwards
--------------------------------------
Name: Patrick J. Edwards
Title: Vice President
1525 West W.T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Attention: Shareholder Services Group
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
RELATING TO DESIGNATION
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
FLORIDA EAST COAST INDUSTRIES, INC.
Pursuant to Section 607.0602 of the
Florida Business Corporation Act
We, ROBERT W. ANESTIS, President, and HEIDI EDDINS, Secretary, of Florida
East Coast Industries, Inc., a corporation organized and existing under the
Florida Business Corporation Act ("Florida Law"), in accordance with the
provisions thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Articles of Incorporation of the Corporation, the Board of Directors on May
16, 2000, adopted the following resolution effective October 9, 2000 creating a
series of Preferred Stock in the amount and having the designation, voting
powers, preferences and relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof as follows:
SECTION 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 500,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares issuable upon exercise or conversion of outstanding rights, options or
other securities issued by the Corporation.
A-1
<PAGE>
SECTION 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable on March 31, June 30, September 30 and December 31 of each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of any share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $1.00 and (ii) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all
cash dividends or other distributions and 100 times the aggregate per
share amount of all non-cash dividends or other distributions (other than
(A) a dividend payable in shares of Common Stock, no par value, of the
Corporation (the "Common Stock") or (B) a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise)), declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. If the Corporation shall at any time after
October 9, 2000 (the "Rights Declaration Date") pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
2(a)(ii) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph 2(a) above immediately
after it declares a dividend or distribution on the Common Stock (other
than as described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above); provided
that if no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date (or, with respect to
the first Quarterly Dividend Payment Date, the period between the first
issuance of any share or fraction of a share of Series A Preferred Stock
and such first Quarterly Dividend Payment Date), a
A-2
<PAGE>
dividend of $1.00 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A Preferred
Stock, unless the date of issue of such shares is on or before the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be cumulative from the
date of issue of such shares, or unless the date of issue is a date after
the record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and on or before
such Quarterly Dividend Payment Date, in which case dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall not be more than 60 days prior to the date fixed for the
payment thereof.
SECTION 3. Voting Rights. In addition to any other voting rights required
by law, the holders of shares of Series A Preferred Stock shall have the
following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of stockholders of the
Corporation (other than regarding the election or removal of directors
with respect to which the holders of Series A Preferred Stock shall only
be entitled to vote concerning the Class A Directors). If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on
Common Stock payable in shares of Common Stock or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of
A-3
<PAGE>
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a
vote of stockholders of the Corporation (other than regarding the election
or removal of directors with respect to which the holders of shares of
Series A Preferred Stock shall vote together as a single class only with
the holders of Class A Common Stock).
(c) The Articles of Incorporation of the Corporation shall not be
amended in any manner (whether by merger or otherwise) so as to adversely
affect the powers, preferences or special rights of the Series A Preferred
Stock without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as a
class.
(d) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent
shall not be required for taking any corporate action.
SECTION 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series A
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such other parity stock on which
A-4
<PAGE>
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for value any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; provided
that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of
stock of the Corporation ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares
of Series A Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of Series A
Preferred Stock and all such other parity stock upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of stock
of the Corporation unless the Corporation could, under paragraph 4(a),
purchase or otherwise acquire such shares at such time and in such manner.
SECTION 5. Reacquired Shares. Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock without designation as to series and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors as permitted by the Articles of
Incorporation or as otherwise permitted under Florida Law.
SECTION 6. Liquidation, Dissolution and Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
A-5
<PAGE>
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $1.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment; provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of Common Stock, or (2)
to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
other parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
If the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. Consolidation, Merger, Etc. If the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash or any other property, then in any such case the shares of Series A
Preferred Stock shall at the same time be similarly exchanged for or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock, securities, cash
or any other property, as the case may be, into which or for which each share
of Common Stock is changed or exchanged. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
A-6
<PAGE>
SECTION 8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
SECTION 9. Rank. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
SECTION 10. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
A-7
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed these Articles of
Amendment this [o]th day of October, 2000.
---------------------------------
Robert W. Anestis, President
---------------------------------
Heidi J. Eddins, Secretary
<PAGE>
EXHIBIT B
FORM OF RIGHT CERTIFICATE
No. R- _______________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF OCTOBER 10, 2010 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH
IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR
TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
RIGHT CERTIFICATE
FLORIDA EAST COAST INDUSTRIES, INC.
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of October 9, 2000 and as
amended from time to time (the "Rights Agreement") between Florida East Coast
Industries, Inc., a Florida corporation (the "Company"), and First Union
National Bank, a national banking institution (the "Rights Agent")) to purchase
from the Company, at any time after the Distribution Date and prior to the
Expiration Date, October 10, 2010 one-hundredth[s] of a fully paid,
nonassessable share of Series A Participating Cumulative Preferred Stock (the
"Preferred Stock") of the Company at a purchase price of $250.00 per one
one-hundredth of a share (the "Purchase Price"), payable in lawful money of the
United States of America, upon surrender of this Right Certificate, with the
form of election to purchase and related certificate duly executed, and payment
of the Purchase Price at an office of the Rights Agent designated for such
purpose.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
B-1
<PAGE>
The number of Rights evidenced by this Right Certificate (and the number
and kind of shares issuable upon exercise of each Right) and the Purchase Price
set forth above are as of October 9, 2000 and may have been or in the future be
adjusted as a result of the occurrence of certain events, as more fully
provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Right Certificate are beneficially owned by (a) an Acquiring Person or
an Associate or Affiliate of an Acquiring Person, (b) a transferee of an
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (c) under certain circumstances
specified in the Rights Agreement, a transferee of an Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such, such Rights shall become null and
void, and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights Agent
designated for such purpose and subject to the terms and conditions set forth
in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Company may, at
the direction of not less than 80% of directors on the Board or the direction
of the holders of not less than 2/3 of the total outstanding shares of Common
Stock, at any time prior to the earlier of (i) the occurrence of a Section
11(a)(ii) Event and (ii) the Final Expiration Date, redeem all but not less
than all the then outstanding Rights at a redemption price of $.01 per Right.
Subject to the provisions of the Rights Agreement, the Board may, at its
option, at any time after the occurrence of a Section 11(a)(ii) Event, exchange
all or part of the then outstanding Rights (other than Rights held by the
Acquiring Person and certain related Persons) for shares of Class B Common
Stock at an
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<PAGE>
exchange ratio of one share of Class B Common Stock per Right. If the Rights
shall be exchanged in part, the holder of this Right Certificate shall be
entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exchanged.
No fractional shares of Preferred Stock are required to be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock 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 Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
Dated as of_______________________________
FLORIDA EAST COAST
INDUSTRIES, INC.
By:
------------------------------
Title:
Countersigned:
FIRST UNION NATIONAL BANK,
as Rights Agent
By:
----------------------------------
Authorized Signature
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED______________________________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, ____
---------------------------------
Signature
Signature Guaranteed:
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not being
assigned by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, ____ ------------------------------------
Signature
------------------
The signatures to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
------------------
B-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: FLORIDA EAST COAST INDUSTRIES, INC.
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase shares of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the
name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ________________, ____
---------------------------------
Signature
Signature Guaranteed:
B-7
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
___did ___did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ____________, ____
---------------------------------
Signature
------------------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
------------------
B-8
<PAGE>
EXHIBIT C
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR TRANSFERRED TO, OR HELD
BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BE NULL AND VOID.
SUMMARY OF RIGHTS
FLORIDA EAST COAST INDUSTRIES, INC.
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security The Board has declared a dividend of one preferred
stock purchase right for each outstanding share of
the Company's Class A Common Stock and Class B
Common Stock (collectively, the "Common Stock"),
payable to holders of record as of the close of
business on October 9, 2000 (each a "Right" and
collectively, the "Rights").
Transfer Prior to the Distribution Date (as described
below), each Right generally will be evidenced by
the certificates for, and will be transferred with,
the Common Stock, and the registered holders of the
Common Stock will be deemed to be the registered
holders of the Rights.
After the Distribution Date, the Rights Agent will
mail separate certificates evidencing the Rights to
each record holder of the Common Stock as of the
close of business on the Distribution Date, and
thereafter the Rights will be transferable
separately from the Common Stock.
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Distribution Date "Distribution Date" generally means the earlier of:
(1) the 10th business day after public announcement
that any person or group, other than pursuant to a
Qualified Offer (as described below), has become
the beneficial owner of 62% or more of the
outstanding shares of Class B Common Stock or 39%
or more of the total outstanding shares of Common
Stock, and (2) the 10th business day after the date
of the commencement of a tender or exchange offer,
other than a Qualified Offer, by any person which
would, if consummated, result in such person
becoming the beneficial owner of 62% or more of the
outstanding shares of Class B Common Stock or 39%
or more of the total outstanding shares of Common
Stock.
Qualified Offer "Qualified Offer" generally means any public
tender offer or public exchange offer to purchase
all, but not less than all, of the outstanding
shares of Common Stock pursuant to which all
holders of Common Stock, regardless of class, are
offered the identical per share consideration.
Exercise Prior to the Distribution Date, the Rights will note
exercisable.
After the Distribution Date, prior to the
occurrence of an event described below under
"Flip-In" and "Flip-Over", each Right will be
exercisable to purchase, for $250.00 (the "Purchase
Price"), one one-hundredth of a share of Series A
Participating Cumulative Preferred Stock, no par
value, of the Company.
Flip-In Except pursuant to a Qualified Offer and subject to
certain typical exceptions (e.g. for inadvertent
triggers), if any person or group (an "Acquiring
Person") becomes the beneficial owner of 62% or
more of the outstanding shares of Class B Common
Stock or 39% or more of the total outstanding
shares of Common Stock, then each Right (other than
Rights beneficially owned by the Acquiring Person
and certain affiliated persons) will entitle
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the holder to purchase, for the Purchase Price, a
number of shares of Class B Common Stock having a
market value of twice the Purchase Price.
Flip-Over Subject to the exception contained in the next
paragraph, if after any person has become an
Acquiring Person, the Company is involved in a
merger or other business combination in which the
Company is not the surviving corporation or its
Common Stock is exchanged for other securities or
assets, then each Right will entitle the holder to
purchase, for the Purchase Price, a number of
shares of common stock of the other party to such
business combination or sale (or in certain
circumstances, an affiliate) having a market value
of twice the Purchase Price.
The "Flip-Over" provision will not be triggered,
however, if (1) the merger or other business
combination referred to above is consummated by a
person who acquired shares of Common Stock pursuant
to a Qualified Offer, (2) the price per share of
Common Stock offered in such transaction is not
less than the price per share of Common Stock paid
to all holders of shares of Common Stock whose
shares were purchased pursuant to such Qualified
Offer and (3) the form of per share consideration
being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is
identical to the form of per share consideration
paid pursuant to the Qualified Offer.
Exchange At any time after any person (other than pursuant to
a Qualified Offer) becomes an Acquiring Person (but
before the Flip-Over is triggered), the Board may
exchange all or part of the Rights (other than the
Rights beneficially owned by the Acquiring Person
and certain affiliated persons) for shares of Class
B Common Stock at an exchange ratio of one share of
Class B Common Stock per Right.
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Redemption The Board, with the approval of not less than 80%
of the directors, or the shareholders, with the
approval of the holders of not less than 2/3 of the
total outstanding shares of Common Stock (Class A
and Class B voting together as a single class), may
redeem all of the Rights at a price of $0.01 per
Right at any time prior to the time that any person
becomes an Acquiring Person.
Expiration The Rights will expire on the earlier of (i)
October 10, 2010, (ii) any date (after the
spin-off) on which there are no longer any shares
of Class B Common Stock outstanding or (iii) the
date upon which the Rights are either exchanged or
redeemed.
Amendments For so long as the Rights are redeemable, the
Rights Agreement may be amended in any respect
with the approval of not less than 80% of the
directors or the approval of the holders of not
less than 2/3 of the total outstanding shares of
Common Stock (Class A and Class B voting together
as a single class).
At any time after the Rights are no longer
redeemable, the Rights Agreement may be amended
with the approval of not less than 80% of the
directors provided that the Rights Agreement may
not be amended in any respect that would adversely
affect the Rights holders (other than any Acquiring
Person and certain affiliated persons) or cause the
Rights again to become redeemable.
Voting Rights A rights holder has no rights as a
stockholder of the Company, including the right to
vote and to receive dividends.
Antidilution Provisions The Rights Agreement includes
standard antidilution provisions designed to
protect the efficacy of the Rights.
Stock Redemption by FEC Notwithstanding anything to the contrary contained
herein, if at any time after the Distribution FEC
redeems or repurchases any shares of its Common
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Stock (i) no triggers under the Rights Plan shall
occur solely by virtue of a shareholder's ownership
percentage in FEC increasing exclusively as a
result of such stock redemption or repurchase, and
(ii) the Shareholders (and only the Shareholders)
shall not be restricted (by virtue of any trigger
under the Rights Plan) from transferring any shares
of Common Stock to a third party to the extent (and
only to the extent) that such transfer would not
have been restricted had the stock redemption or
repurchase by FEC not occurred.
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A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, as amended from time to
time, the complete terms of which are hereby incorporated by reference.
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