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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Pennsylvania Real Estate Investment Trust
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(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania 23-6216339
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State of Incorporation or Organization (I.R.S. Employer
Identification no.)
The Bellevue, 200 S. Broad St., Philadelphia, Pennsylvania 19102
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the registration
registration of a class of securities of a class of securities
pursuant to Section 12(b) of the pursuant to Section 12(g) of the
Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following box. A.(d), please check the following box.
|X| |_|
Securities Act registration statement file number to which this form
relates:___________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Rights to Purchase Shares of Beneficial Interest New York Stock Exchange
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Securities to be registered pursuant to Section 12(g) of the Act:
None.
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(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
On April 29, 1999, the Board of Trustees of Pennsylvania Real Estate
Investment Trust (the "Registrant") declared a distribution of one share
purchase right (a "Right") for each outstanding share of Beneficial Interest,
$1.00 par value per share, of the Registrant (the "Shares"). The distribution is
payable as of May 14, 1999 to shareholders of record on that date. Each Right
entitles the registered holder thereof to purchase from the Registrant one Share
at a price of $70.00 (the "Exercise Price"), subject to certain adjustments. The
description and terms of the Rights are set forth in a Rights Agreement, dated
as of April 30, 1999, as the same may be amended from time to time (the "Rights
Agreement"), between the Registrant and American Stock Transfer and Trust
Company, as rights agent (the "Rights Agent").
Initially the Rights will not be exercisable, certificates will not be
sent to shareholders, and the Rights will automatically trade with the Shares.
The Rights, unless earlier redeemed or exchanged by the Board of
Trustees, become exercisable upon the close of business on the day (the
"Distribution Date") which is the earlier of (i) the tenth day following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person"), with certain exceptions set forth below, has acquired
beneficial ownership or voting control of 15% or more of the outstanding voting
shares of the Registrant, and (ii) the tenth business day (or such later date as
may be determined by the Board of Trustees prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person) after the
date of the commencement or public announcement of a person's or group's
intention to commence a tender or exchange offer the consummation of which would
result in the acquisition of beneficial ownership or voting control of 15% or
more of the Registrant's outstanding voting shares (even if no shares are
actually acquired pursuant to such offer).
Prior to the Distribution Date, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Shares, but will instead be evidenced, with respect
to any of the Share certificates outstanding as of May 14, 1999, by such Share
certificate itself together with a copy of the Summary of Rights attached as
Exhibit A to the Rights Agreement. An Acquiring Person does not include (A) the
Registrant, (B) any Subsidiary of the Registrant (as that term is defined in the
Rights Agreement), (C) any employee benefit plan or employee stock plan of the
Registrant or of any Subsidiary of the Registrant, or any trust or other entity
organized, appointed, established or holding Shares for or pursuant to the terms
of any such plan, and (D) any person or group of affiliated or associated
persons whose beneficial ownership or voting control of 15% or more of the
outstanding voting shares of the Registrant results solely from (i) any action
or transaction or transactions approved by the members of the Board of Trustees
who are neither affiliates nor associates of such person, or officers of the
Registrant, before such person or group became an Acquiring Person, or (ii) a
reduction in the number of outstanding voting shares of the Registrant pursuant
to a transaction or transactions approved by the Board of Trustees (provided
that any such person or group that does not become an Acquiring Person by reason
of clause (i) or (ii) above shall become an Acquiring Person upon acquisition of
an additional 1% of the Registrant's outstanding voting
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shares unless such acquisition of additional voting shares will not result in
such person or group becoming an Acquiring Person by reason of such clause (i)
or (ii)).
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Share certificates issued after May 14, 1999 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
the surrender for transfer of any Share certificates outstanding as of May 14,
1999, with or without a copy of the Summary of Rights attached, also will
constitute the transfer of the Rights associated with the Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Shares as of the close of business on the
Distribution Date and such separate certificates alone will evidence the Rights
from and after the Distribution Date.
The Rights will expire at the close of business on March 31, 2009,
unless earlier redeemed or exchanged by the Registrant as described below. The
number of Shares issuable upon exercise of the Rights is subject to certain
adjustments from time to time in the event of a Share dividend on, or a
subdivision or combination of, the Shares. The Exercise Price for the Rights is
subject to adjustment in the event of extraordinary distributions of cash or
other property to holders of Shares.
Unless the Rights are earlier redeemed or exchanged, in the event that
a person or group of affiliated or associated persons become an Acquiring
Person, the Rights Agreement provides that each holder of record of a Right,
other than the Acquiring Person (whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of Shares having a market value at the time of the
transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed or exchanged, in
the event that, after the time that a person or group of affiliated or
associated persons becomes an Acquiring Person, the Registrant were to be
acquired in a merger or other business combination (in which any Shares are
changed into or exchanged for other securities or assets) or more than 50% of
the assets or earning power of the Registrant and its subsidiaries (taken as a
whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right, other than the Acquiring Person (whose
rights will thereupon become null and void), will from and after such date have
the right to receive, upon payment of the Exercise Price, that number of shares
of common stock of the acquiring entity having a market value at the time of
such transaction equal to two times the Exercise Price.
The Rights Agreement provides that, notwithstanding any provision of
the Rights Agreement to the contrary, no Right will be exercisable for a number
of Shares that would cause the ownership limit set forth in the Registrant's
Amended and Restated Trust Agreement (or any amendment or successor document
thereto) to be exceeded.
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At any time after any person or group of affiliated or associated
persons becomes an Acquiring Person and prior to the acquisition by such
Acquiring Person of 50% or more of the Registrant's outstanding voting shares,
the Board of Trustees may exchange the Rights (other than Rights owned by the
Acquiring Person which will have become null and void), in whole or in part, at
an exchange ratio of one Share per Right (subject to adjustment).
Fractions of Shares which would otherwise be issued upon exercise or
redemption of the Rights may, at the election of the Registrant, be evidenced by
depositary receipts. The Rights Agreement also provides that the Registrant may
pay cash in lieu of fractional Shares.
At any time on or prior to the close of business on the tenth day after
a public announcement that a person or group of affiliated or associated persons
has become an Acquiring Person (or such later date as may be authorized by the
Board of Trustees), the Registrant may redeem the Rights in whole, but not in
part, at a price of $.001 per Right ("Redemption Price"), payable at the
election of the Registrant in cash or Shares. Following the effective time of
the action of the Board of Trustees authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
the Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Registrant may,
except with respect to the Redemption Price or date of expiration of the Rights,
amend the Rights in any manner, including an amendment to extend the time period
in which the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Registrant may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as
a shareholder of the Registrant, including, without limitation, the right to
vote or to receive dividends.
As of April 30, 1999, there were 13,314,223 Shares issued and
outstanding, 1,044,375 Shares underlying outstanding stock options, 452,000
Shares underlying stock options reserved for issuance pursuant to a stock option
plan and the Registrant's 1999 Equity Incentive Plan, 1,300,000 Shares reserved
for issuance pursuant to the Registrant's Distribution Reinvestment and Share
Purchase Plan and 1,152,540 Shares issuable, at the election of the Registrant,
upon redemption of Limited Partner Interests in PREIT Associates, L.P., a
Delaware limited partnership of which the Registrant is the sole general partner
and in which the Registrant holds an approximately 92% interest.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group of affiliated or associated persons
that attempts to acquire the Registrant on terms not approved by the Board of
Trustees. The Rights should not interfere with any merger or other business
combination approved by the Board of Trustees since they may be redeemed by the
Registrant at $.001 per Right at any time until the close of business on the
tenth day (or such later date as described above) after a person or group has
obtained beneficial ownership or voting control of 15% or more of the voting
shares.
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The form of Rights Agreement between the Registrant and American Stock
Transfer and Trust Company, as rights agent, specifying the terms of the Rights,
which includes as Exhibit A the form of Summary of Rights to Purchase Shares of
Beneficial Interest and as Exhibit B the form of Right Certificate is attached
hereto as an exhibit and incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is qualified by
reference to such exhibit.
Item 2. Exhibits.
1. Rights Agreement dated as of April 30, 1999 between Pennsylvania Real
Estate Investment Trust and American Stock Transfer and Trust Company,
as Rights Agent. The Rights Agreement includes as Exhibit A the form of
Summary of Rights to Purchase Shares of Beneficial Interest and as
Exhibit B the form of Right Certificate.
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SIGNATURE
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Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized.
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
Date: April 30, 1999 By: /s/ Jonathan B. Weller
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Jonathan B. Weller
President and Chief Operating Officer
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EXHIBIT INDEX
Exhibit No. Description
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1. Rights Agreement dated as of April 30, 1999
between Pennsylvania Real Estate Trust and
American Stock Transfer and Trust Company, as
Rights Agent. The Rights Agreement includes
as Exhibit A the form of Summary of Rights to
Purchase Shares of Beneficial Interest and as
Exhibit B the form of Right Certificate.
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EXHIBIT 1
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PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY
as Rights Agent
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Rights Agreement
Dated as of April 30, 1999
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TABLE OF CONTENTS
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Page
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Section 1- Certain Definitions............................................................................2
Section 2- Appointment of Rights Agent....................................................................7
Section 3- Issuance of Right Certificates.................................................................7
Section 4- Form of Right Certificates.....................................................................9
Section 5- Countersignature and Registration..............................................................9
Section 6- Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.............................................................10
Section 7- Exercise of Rights; Exercise Price; Expiration
Date of Rights................................................................................10
Section 8- Cancellation and Destruction of Right
Certificates..................................................................................13
Section 9- Reservation and Availability of Shares of
Beneficial Interest...........................................................................13
Section 10- Share Record Date.............................................................................14
Section 11- Adjustment of Exercise Price or
Number of Shares or Rights....................................................................14
Section 12- Certification of Adjusted Exercise,
Price or Number of Shares.....................................................................20
Section 13- Consolidation, Merger or Sale or Transfer
of Assets or Earning Power....................................................................20
Section 14- Fractional Rights and Fractional Shares.......................................................23
Section 15- Rights of Action..............................................................................23
Section 16- Agreement of Right Holders....................................................................24
Section 17- Right Certificate Holder Not Deemed
a Shareholder.................................................................................24
Section 18- Concerning the Rights Agent...................................................................25
Section 19- Merger or Consolidation of, or Change in
Name of, the Rights Agent.....................................................................25
Section 20- Duties of Rights Agent........................................................................26
Section 21- Change of Rights Agent........................................................................27
Section 22- Issuance of New Right Certificates............................................................28
Section 23- Redemption....................................................................................28
Section 24- Notice of Proposed Actions....................................................................29
Section 25- Notices.......................................................................................30
Section 26- Supplements and Amendments....................................................................31
Section 27- Exchange......................................................................................31
Section 28- Successors....................................................................................32
Section 29- Benefits of this Rights Agreement.............................................................32
Section 30- Interpretation................................................................................32
Section 31- Pennsylvania Contract.........................................................................32
Section 32- Counterparts..................................................................................32
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Section 33- Descriptive Headings..........................................................................33
Section 34- Severability..................................................................................33
Section 35- Trust Provision...............................................................................33
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RIGHTS AGREEMENT
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Rights Agreement, dated as of April 30, 1999, by and between
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the
"Company"), and AMERICAN STOCK TRANSFER AND TRUST COMPANY , (the "Rights
Agent").
W I T N E S S E T H :
WHEREAS, the Board of Trustees of the Company (the "Board of
Trustees") has authorized and declared a distribution of one right (a "Right")
for each Share of Beneficial Interest, $1.00 par value per share, in the Company
(the "Shares") outstanding as of the close of business on May 14, 1999 (the
"Record Date"), each such Right representing the right to purchase one Share
(subject to adjustment) upon the terms and subject to the conditions hereinafter
set forth; and
WHEREAS, the Board of Trustees has further authorized the
issuance of one Right (subject to adjustment) with respect to each Share that
shall become outstanding (whether originally issued or delivered from the
Company's treasury) between the Record Date and the earliest of the Distribution
Date, the Expiration Date and the Final Expiration Date (as such terms are
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the Voting Shares (as such term is hereinafter defined)
of the Company then outstanding; provided, however, that an Acquiring
Person shall not include (i) an Exempt Person (as such term is
hereinafter defined), or (ii) any Person who or which, together with
all Affiliates and Associates of such Person, would be an Acquiring
Person solely by reason of (A) being the Beneficial Owner of Voting
Shares of the Company, the Beneficial Ownership of which was acquired
by such Person (together with all Affiliates and Associates of such
Person) pursuant to any action or transaction or series of related
actions or transactions approved by the members of the Board of
Trustees who are neither Affiliates nor Associates of such Person nor
Officers of the Company before such Person (together with all
Affiliates and Associates of such Person) otherwise became an Acquiring
Person, or (B) a reduction in the number of issued and outstanding
Voting Shares of the Company pursuant to a transaction or a series of
related transactions approved by the Board of Trustees; provided,
further, however, that in the event that such Person described in the
foregoing clause (ii) does not become an Acquiring Person by reason of
subclause (A) or (B) of said clause (ii), such Person shall nonetheless
become an Acquiring Person in the event such Person (together
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with all Affiliates and Associates of such Person) thereafter acquires
Beneficial Ownership of an additional 1% of the Voting Shares of the
Company, unless the acquisition of such additional Voting Shares would
not result in such Person becoming an Acquiring Person by reason of
subclause (A) or (B) of said clause (ii). Notwithstanding the
foregoing, if the Board of Trustees determines in good faith that a
Person who would otherwise be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as practicable
(as determined in good faith by the Board of Trustees) a sufficient
number of Voting Shares so that such Person would no longer be an
"Acquiring Person", as defined pursuant to the foregoing provisions of
this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to
such term in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), as in
effect on the date of this Rights Agreement.
(c) "Associate" of a Person shall mean (i) with
respect to a corporation, any officer or director thereof or of any
Subsidiary (as such term is hereinafter defined) thereof, or any
Beneficial Owner of 10% or more of any class of equity security
thereof, (ii) with respect to an association, any officer or director
thereof or of a Subsidiary thereof, (iii) with respect to a
partnership, any general partner thereof or any limited partner thereof
who is, directly or indirectly, the Beneficial Owner of a 10% ownership
interest therein, (iv) with respect to a business trust, any officer or
trustee thereof or of any Subsidiary thereof, (v) with respect to any
other trust or an estate, any trustee, executor or similar fiduciary or
any Person who has a 20% or greater interest as a beneficiary in the
income from or principal of such trust or estate, (vi) with respect to
a natural person, any relative or spouse of such person, or any
relative of such spouse, who has the same home as such person, and
(vii) any Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner"
of, or to "Beneficially Own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act
and Regulation 13D-G thereunder (or any comparable or
successor law or regulation), in each case as in effect on the
date hereof; or
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding, or
upon the
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exercise of conversion rights, exchange rights, other rights
(other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own", securities
tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange, or (B) the right to vote, alone or in concert with
others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own", any securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to
a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the Exchange Act and (2) is not at the time reportable by such
Person on a Schedule 13D report under the Exchange Act (or any
comparable or successor report), other than by reference to a
proxy or consent solicitation being conducted by such Person;
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in the proviso to subclause (B) of clause (ii) of this
paragraph (d)) or disposing of any securities of the Company;
provided, however, that for purposes of determining Beneficial
Ownership of securities under this Rights Agreement, officers
and directors of the Company solely by reason of their status
as such shall not constitute a group (notwithstanding that
they may be Associates of one another or may be deemed to
constitute a group for purposes of the Exchange Act) and shall
not be deemed to own shares owned by another officer or
director of the Company. Notwithstanding anything in this
paragraph (d) to the contrary, a Person engaged in the
business of underwriting securities shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any
securities acquired in good faith in a firm commitment
underwriting until the expiration of forty days after the date
of such acquisition (and, at such time, only those securities
which it then beneficially owns).
(e) "Board of Trustees" shall mean those persons
serving on the Company's Board of Trustees pursuant to Paragraph 2 of
the Trust Agreement and any authorized committee thereof.
(f) "Business Day" shall mean 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.
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(g) "Close of Business" on any given date shall mean
5:00 P.M., New York, New York, time, on such date; provided, however,
that if such date is not a Business Day, it shall mean 5:00 P.M., New
York, New York, time on the next succeeding Business Day.
(h) "Distribution Date" shall have the meaning set
forth in Section 3(b) hereof.
(i) "Exchange Act" shall have the meaning set forth in
Section 1(b) hereof.
(j) "Exempt Person" shall mean the Company, any
Subsidiary of the Company, any employee benefit plan or employee stock
plan of the Company or of any Subsidiary of the Company, or any trust
or other entity organized, appointed, established or holding Shares for
or pursuant to the terms of any such plan.
(k) "Exercise Price" shall have the meaning set forth
in Sections 4 hereof.
(l) "Expiration Date" shall have the meaning set forth
in Section 7(a)(i) hereof.
(m) "Fair Market Value" of any property shall mean the
fair market value of such property as determined in accordance with
Section 11(d) hereof.
(n) "Invalidation Time" shall mean the meaning set
forth in Section 7(e) hereto.
(o) "Final Expiration Date" shall have the meaning set
forth in Section 7(a)(i) hereof.
(p) "Person" shall mean any individual, firm,
corporation or other entity.
(q) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
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(r) "Record Date" shall mean the meaning set forth in
the first paragraph of the Recitals hereto.
(s) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(t) "Right Certificate" shall have the meaning set
forth in Section 3(d) hereof.
(u) "Section 13 Event" shall have the meaning set
forth in Section 13(a) hereof.
(v) "Share Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of
the Board of Trustees shall become aware of the existence of an
Acquiring Person.
(w) "Shares" when used with reference to the Company
shall mean the Shares of Beneficial Interest, par value $1.00 per
share, of the Company which have not been classified as Preferred
Shares. "Shares" when used with reference to any Person other than the
Company which shall be organized in corporate form shall mean the
capital stock or other equity security with the greatest per share
voting power of such Person. "Shares" when used with reference to any
Person other than the Company which shall not be organized in corporate
form shall mean units of beneficial interest which shall represent the
right to participate in profits, losses, deductions and credits of such
Person and which shall be entitled to exercise the greatest voting
power per unit of such Person.
(x) "Subsidiary" of a Person shall mean any
corporation or other entity of which securities or other ownership
interests having voting power sufficient to elect a majority of the
board of directors or other persons performing similar functions are
beneficially owned, directly or indirectly, by such Person or by any
corporation or other entity that is otherwise controlled by such
Person; provided, however, that PREIT-RUBIN, INC. shall be a Subsidiary
of Company for purposes of this Agreement so long as the Company owns
at least 51% of all of the issued and outstanding Common Shares of all
classes, considered for such purposes to be a single class.
(y) "Summary of Rights" shall have the meaning set
forth in Section 3(a) hereof.
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(z) "Trading Day" shall have the meaning set forth in
Section 11(b) hereof.
(aa) "Transfer Tax" shall mean any tax or charge,
including any documentary stamp tax, imposed or collected by any
governmental or regulatory authority in respect of any transfer of any
security, instrument or right, including the Rights or the Shares.
(bb) "Trust Agreement" shall mean the Company's
Amended and Restated Trust Agreement, dated December 16, 1997, as the
same shall be further amended from time to time and any document
successor thereto. Reference herein to paragraphs of the Trust
Agreement shall be deemed to include amendments to such paragraph and
provisions in this Trust Agreement successor thereto, however
denominated.
(cc) "Voting Shares" shall mean (i) the Shares of the
Company and (ii) any other shares of the Company entitled to vote
generally in the election of trustees or entitled to vote together with
the Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or
winding up.
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, upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event be liable for, the acts or omissions of any such
Co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) On the Record Date (or as soon as practicable
thereafter), the Company or the Rights Agent shall send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit A (the "Summary of
Rights"), by first class mail, postage prepaid, to each record holder of the
Shares as of the close of business on the Record Date, at the address of such
holder shown on the records of the Company.
(b) Until the close of business on the day which is
the earlier of (i) the tenth day after the Share Acquisition Date, or (ii) the
tenth business day (or such later date as may be determined by action of the
Board of Trustees prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt
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Person) of, or the first public announcement of the intent of any Person (other
than an Exempt Person) to commence, a tender or exchange offer upon the
successful consummation of which such Person would be an Acquiring Person
(irrespective of whether any Shares are actually purchased pursuant to any such
offer) (the earlier of such dates being herein referred to as the "Distribution
Date"), (x) the Rights shall be evidenced by the certificates for Shares
registered in the name of the holders of the Shares and not by separate Right
Certificates and the record holders of such certificates for Shares shall be the
record holders of the Rights represented thereby and (y) each Right shall be
transferable only simultaneously and together with the transfer of a Share
(subject to adjustment as hereinafter provided). Until the Distribution Date
(or, if earlier, the Expiration Date or Final Expiration Date), the surrender
for transfer of any certificate for Shares shall constitute the surrender for
transfer of the Right or Rights associated with the Shares evidenced thereby,
whether or not accompanied by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all Shares
that become outstanding after the Record Date but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates issued for Shares (including, without limitation, certificates
issued upon original issuance, disposition from the Company's treasury or
transfer or exchange of Shares) after the Record Date but prior to the earlier
of the Distribution Date, the Expiration Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the
holder hereof to the same number of Rights (subject
to adjustment) as the number of Shares of Beneficial
Interest represented by this certificate, such Rights
being on the terms provided under the Rights
Agreement between Pennsylvania Real Estate Trust and
American Stock Transfer and Trust Company (the
"Rights Agent"), dated as of April 30, 1999, as it
may be amended from time to time (the "Rights
Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at
the principal executive offices of Pennsylvania Real
Estate Investment Trust. Under certain circumstances,
as set forth in the Rights Agreement, such Rights
shall be evidenced by separate certificates and shall
no longer be evidenced by this certificate.
Pennsylvania Real Estate Investment Trust shall mail
to the registered holder of this certificate a copy
of the Rights Agreement without charge within five
days after receipt of a written request therefor.
Rights issued to or Beneficially Owned by Acquiring
Persons or their Affiliates or Associates (as such
terms are defined in the Rights Agreement) or any
subsequent holder of such Rights shall be null and
void and may not be exercised by any such Person, as
and to the extent provided in Section 7(e) of the
Rights Agreement.
(d) As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class mail, postage prepaid, to each record holder of
the Shares as of the close of business on the Distribution Date, as shown by
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the records of the Company maintained by its registrar and transfer agent, at
the address of such holder shown on such records, a certificate in the form
provided by Section 4 hereof (a "Right Certificate"), evidencing one Right
(subject to adjustment as provided herein) for each Share so held. As of and
after the Distribution Date, the Rights shall be evidenced solely by Right
Certificates and may be transferred only by the transfer of the Right
Certificates as permitted hereby, separately and apart from any transfer of
Shares.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares, certificate and assignment to be
printed on the reverse thereof), when, as and if issued, shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Shares or the Rights may from time to time be listed or as
the Company may deem appropriate to conform to usage or otherwise and as are not
inconsistent with the provisions of this Rights Agreement. Right Certificates
evidencing Rights whenever issued, (i) shall be dated as of the date of issuance
of the Rights they represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof to purchase
such number of Shares as shall be set forth thereon at the price per Share
payable upon exercise of a Right provided by Section 7(b) hereof, as the same
may from time to time be adjusted as provided herein (the "Exercise Price").
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf
of the Company by its Chairman, Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any Right Certificate shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Right Certificate, nevertheless, may 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, on the 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 one or more offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, and in such other locations as may be required by law,
books for registration and transfer of the Right Certificates issued hereunder.
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Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f)
and 14 hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the earlier of the Expiration Date
or the Final Expiration Date, any Right Certificate may be (i) transferred or
(ii) split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of Shares (or fraction
of a Share) as the Right Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer any
Right Certificate shall surrender the Right Certificate at the principal office
of the Rights Agent with the form of certificate and assignment on the reverse
side thereof duly endorsed (or enclose with such Right Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon, the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f)
and 14 hereof, 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, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Rights Agent shall issue and deliver a
new Right Certificate of like tenor to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights.
(a) (i) The Rights shall not be exercisable until, and
shall become exercisable on, the Distribution Date (unless otherwise provided
herein, including, without limitation, the restrictions on exercisability set
forth in Sections 7(a)(ii), 7(e), 23(a) and 27(b) hereof). Except as otherwise
provided herein, the Rights may be exercised, in whole or in part, at any time
commencing with the Distribution Date upon surrender of the Right Certificate,
with
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<PAGE>
the form of election to purchase and certificate on the reverse side
thereof duly executed (with signatures duly guaranteed), to the Rights Agent at
the principal office of the Rights Agent in [Philadelphia, Pennsylvania],
together with payment of the Exercise Price with respect to each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
close of business on the earlier of (i) March 31, 2009 (the "Final Expiration
Date") or (ii) the date on which the Rights are redeemed as provided in Section
23 hereof or the date on which the Rights are exchanged as provided in Section
27 hereof (the "Expiration Date").
(ii) Notwithstanding any provision of this Rights
Agreement to the contrary, no Right shall be exercisable by the holder thereof
for a number of Shares in excess of the maximum number of Shares that could be
acquired by the holder of such Right without violating any provision of
Paragraph 9 of the Trust Agreement, relating to limitations on the ownership of
Shares. Any holder who exercises a Right for a number of Shares that violates
the preceding sentence shall be deemed never to have had an interest in the
excess Shares purportedly purchased upon such exercise. The Board of Trustees
shall have the power to take such actions as they deem necessary or appropriate
to administer the provisions of this Section 7(a)(ii) in a fair and equitable
manner.
(b) The Exercise Price shall initially be $70.00 for each
Share purchasable pursuant to the exercise of a Right. The Exercise Price and
the number of Shares (or fraction of a Share) or other securities to be acquired
upon exercise of a Right shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof. The Exercise Price shall be payable in
lawful money of the United States of America, in accordance with paragraph (c)
below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment of the aggregate
Exercise Price for the Shares to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check, bank draft or money order payable to the Company or the Rights Agent, the
Rights Agent shall thereupon promptly (i) requisition from any transfer agent of
the Shares one or more certificates representing the number of Shares to be so
purchased, and the Company hereby authorizes and directs such transfer agent to
comply with all such requests, (ii) as provided in Section 14(b), at the
election of the Company, cause depositary receipts to be issued in lieu of
fractional Shares, (iii) if the election provided for in the immediately
preceding clause (ii) has not been made, requisition from the Company the amount
of cash to be paid in lieu of the issuance of fractional Shares in accordance
with Section 14(b) hereof, (iv) after receipt of such Share certificates and/or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, and (v) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate; provided, however, that in the case of a purchase of
securities, other than the Shares, pursuant to Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding in such case to
that referred to in the
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<PAGE>
foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of Shares or other securities upon exercise of a Right for a reasonable period,
not in excess of 90 days, during which the Company seeks to register under the
Securities Act of 1933, as amended (the "Act"), and any applicable securities
law of any other jurisdiction, the Shares or such other securities to be issued
pursuant to the Rights; provided, however, that nothing contained in this
Section 7(c) shall relieve the Company of its obligations under Section 9(c)
hereof.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the exercisable Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Right Certificate or his assign, subject to the provisions of Sections 7(a)(i)
and 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to
the contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time, or (z) a transferee of
such Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the invalidation time pursuant to
either (I) a transfer from the Acquiring Person (or any such Associate or
Affiliate) to holders of its equity securities or to any Person with whom it has
any continuing agreement, arrangement or understanding regarding the transferred
Rights, or (II) a transfer which the Board of Trustees has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of such Persons,
shall be null and void without any further action and any holder of such Rights
shall thereafter have no rights whatsoever with respect to such Rights under any
provision of this Rights Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to Section 3 hereof
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof whose Rights would be null and void pursuant to
the provisions of this Section 7(e); no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be null and void pursuant to the provisions of this Section 7(e) or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person (or an Associate or Affiliate of such
Acquiring Person) whose Rights would be null and void pursuant to the provisions
of this Section 7(e) shall be canceled.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this
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<PAGE>
Section 7 unless such registered holder shall have (i) completed and signed the
certificate following the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the 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, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall cancel and retire, any Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
Beneficial Interest.
(a) Subject to the provisions of this Agreement (including,
without limitation, Section 11(a)(iii) hereof), the Company covenants and agrees
that it will keep available out of its authorized and unissued Shares of
Beneficial Interest a number of Shares as will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7;
provided, however, that the Company shall not be required to keep available
Shares or other securities sufficient to permit the exercise in full of all
outstanding Rights pursuant to the adjustments set forth in Section 11(a)(ii) or
Section 13 hereof unless the Rights become exercisable pursuant to such
adjustments, and then only to the extent the Rights become exercisable pursuant
to such adjustments and subject, in each case, to the provisions of Section
11(a)(iii).
(b) As long as the Shares (or any other securities) issuable
and deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use reasonable efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all Shares
reserved for such issuance to be listed on such exchange upon official notice of
issuance.
(c) The Company shall use reasonable efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
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<PAGE>
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (b) the earlier of the Expiration Date and
the Final Expiration Date. The Company may temporarily suspend, for a period of
time not to exceed ninety days, the exercisability of the Rights in order to
prepare and file a registration statement under the Act and permit it to become
effective. 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. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained and until a registration statement under the Act (if
required) shall 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 Shares (or other securities,
as the case may be) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Exercise Price in respect thereof), be duly and validly authorized and issued
and fully paid and nonassessable securities.
(e) The Company shall not be required to pay any Transfer Tax
which may be payable in respect of any transfer or delivery of a Right
Certificate to any Person or the issuance or delivery of certificates for Shares
(or other securities, as the case may be) upon exercise of Rights in the name of
any Person, and the Company shall not be required to issue or deliver a Right
Certificate or certificate for Shares (or other securities, as the case may be)
to a Person until any such Transfer Tax shall have been paid (any such Transfer
Tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such Transfer Tax is due.
Section 10. Share Record Date. Each Person in whose
name any certificate for Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Shares
represented thereby on, and such certificate shall be dated as of, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price (and any applicable Transfer Taxes) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the Share transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such Shares on, and such
certificate shall be dated as of, the next succeeding Business Day on which the
Share transfer books of the Company are open.
Section 11. Adjustment of Exercise Price or Number of
Shares or Rights. The Exercise Price, the number and kind of Shares (or fraction
of a share) which may be purchased upon exercise of a Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
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<PAGE>
(a) (i) In the event the Company shall at any time after the
Record Date (A) declare or pay any dividend on Shares payable in Shares, (B)
subdivide or split the outstanding Shares into a greater number of Shares, (C)
combine or consolidate the outstanding Shares into a smaller number of Shares or
effect a reverse split of the outstanding Shares or (D) issue any Shares in a
reclassification of the Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), the Exercise Price in effect at the time of the
record date for such event (if one shall have been established or, if not, in
effect on the effective date of such event), and the number and kind of Shares
(or fraction of a Share) or other capital stock, as the case may be, issuable
upon exercise of a Right on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Exercise Price then in effect, the aggregate number and kind
of Shares or other shares, as the case may be, that, if such Right had been
exercised immediately prior to such date and at a time when the Share transfer
books of the Company were open, the holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination, reclassification or other event. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, 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) Subject to Section 27 of this Agreement, in the
event that any Person shall be or become an Acquiring Person, unless the event
causing such Person to become and Acquiring Person is a transaction set forth in
Section 13(a) hereof, then, subject to the last sentence of Section 23(a) and
except as otherwise provided in this Section 11, each holder of a Right, except
as provided in Section 7(e) hereof and subject to the provisions of Section
7(a)(ii), shall thereafter have the right to receive upon exercise of a Right in
accordance with the terms of this Rights Agreement and payment of the Exercise
Price with respect to the total number of Shares (or fraction of a Share) for
which a Right was exercisable immediately prior to the occurrence of the event
described in this Section 11(a)(ii), such number of Shares (or fraction of a
Share) as shall equal the result obtained by (x) multiplying the then current
Exercise Price by the number of Shares (or fraction of a Share) for which a
Right was exercisable immediately prior to the first occurrence of the event
described in this Section 11(a)(ii) and (y) dividing that product by 50% of the
then current per share Fair Market Value of the Shares (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of such event.
(iii) Unless the Board of Trustees determines that the
following is not permitted by the terms of any agreement or instrument to which
the Company is a party on the date of this Agreement, then in the event that the
number of Shares which are authorized by the Company's Trust Agreement but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall: (A) determine the excess of (1) the aggregate Fair Market Value
of the Shares issuable upon the exercise of a Right (the "Current Value") over
(2) the Purchase Price (such excess being referred to herein as the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Shares or other equity securities of
the Company
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<PAGE>
(including, without limitation, preferred shares, or units of preferred shares,
which the Board of Trustees has deemed to have substantially the same value as
Shares (such preferred shares being referred to herein as "common share
equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Trustees
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Trustees; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Shares (to the extent
available) and then, if necessary, cash, which Shares and/or cash have an
aggregate value equal to the Spread. If the Board of Trustees shall determine in
good faith that it is likely that sufficient additional Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"); provided, however, that there shall be no obligation on the part of
the Company so to seek authorization of such additional Shares. To the extent
that the Company determines that some action need be (and may be) taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall 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 a Share shall be the current market price (as determined pursuant to
Section 11(d) hereof) per Share on the Section 11(a)(ii) Trigger Date and the
value of any "common stock equivalent" shall be deemed to have the same value as
the Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Shares or securities convertible into Shares at a
price per Share (or having a conversion price per share, if a security
convertible into Shares) less than the then current per share Fair Market Value
of the Shares on such record date, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Shares outstanding on such record date plus the number of
Shares which the aggregate offering price of the total number of Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current Fair Market Value
and the denominator of which shall be the number of Shares outstanding on such
record date plus the number of additional Shares to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially
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convertible). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Trustees,
whose determination shall be described in a statement filed with the Rights
Agent. Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed and in the event
that such rights, options or warrants are not so issued, the Exercise Price
shall be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend not in excess of 150% of the previous
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Shares) or subscription
rights or warrants (excluding those referred to in Section 11(b) hereof), the
Exercise Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Fair Market Value of the
Shares on such record date, less the fair market value (as determined in good
faith by the Board of Trustees, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Share and the denominator of which shall be such current Fair
Market Value of the Shares. Such adjustment shall be made successively whenever
such a record date is fixed and in the event that such distribution is not so
made, the Exercise Price shall again be adjusted to be the Exercise Price which
would then be in effect if such record date had not been fixed.
(d) For the purpose of this Rights Agreement other than
computations made pursuant to 11(a)(iii) hereof, the "Fair Market Value" of any
Share or any other stock or any Right or other security or any other property on
any date shall be determined as provided in this Section 11(d). In the case of a
publicly-traded stock or other security, the Fair Market Value on any date shall
be deemed to be the average of the daily closing prices per share of such stock
or per unit of such other security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Fair Market Value
per Share shall be deemed to be the average of the daily closing prices for the
ten (10) consecutive Trading Days immediately following such date; provided,
however, that in the event that the Fair Market Value per Share is determined
during a period which includes any date that is within 30 Trading Days after (i)
the ex-dividend date for a dividend or distribution on such stock payable in
Shares or securities convertible into Shares, or (ii) the effective date of any
subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then, and in each such case, the Fair Market
Value shall be appropriately adjusted by the Board of Trustees to take into
account ex-dividend or post-effective date trading. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way
(in either case, as reported in the applicable transaction reporting system with
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respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading; or, if 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 no bids for such security are 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 such security selected by the Board
of Trustees. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which such security is listed or admitted to
trading is open for the transaction of business or, if such security is not
listed or admitted to trading on any national securities exchange, a Business
Day. If a security is not publicly held or not so listed or traded, "Fair Market
Value" shall mean the fair value per share of stock or per other unit of such
other security, as determined by an independent investment banking firm
experienced in the valuation of securities selected in good faith by the Board
of Trustees, or, if no such investment banking firm is, in the good faith
judgment of the Board of Trustees, available to make such determination, in good
faith by the Board of Trustees. In the case of property other than securities,
the "Fair Market Value" thereof shall be determined in good faith by the Board
of Trustees based upon such appraisals or valuation reports of such independent
experts as the Board of Trustees shall in good faith determine to be appropriate
in accordance with good business practices and the interests of the holders of
Rights. Any such determination of Fair Market Value shall be described in a
statement filed with the Rights Agent and shall be binding upon the Rights
Agent.
(e) Unless the Company shall have exercised its election as
provided in Section 11(f), upon each adjustment of the Exercise Price as a
result of the calculations made in Section (b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of Shares (or
fraction of a Share) obtained by (i) multiplying (x) the number of Shares (or
fraction of a Share) covered by a Right immediately prior to the adjustment by
(y) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise Price
in effect immediately after such adjustment of the Exercise Price.
(f) The Company may elect on or after the date of any
adjustment of the Exercise Price pursuant to Section 11(a), (b) and (c) to
adjust the number of Rights in substitution for any adjustment pursuant to
Section 11(e) in the number of Shares (or fraction of a Share) purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of Shares (or fraction
of a Share) for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights obtained by dividing the Exercise
Price in effect immediately prior to adjustment of the Exercise Price by the
Exercise Price in effect immediately after adjustment of the Exercise Price. The
Company shall make a public announcement of its election to adjust the number of
Rights,
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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 Exercise 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 the Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(f), 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 hereof, the additional Rights, if any, 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 shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(g) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% of
the Exercise Price; provided, however, that any adjustments which by reason of
this Section 11(g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-hundredth of
a Share, as the case may be.
(h) Irrespective of any adjustment or change in the Exercise
Price or the number of Shares (or fraction of a Share) issuable upon the
exercise of a Right, the Right Certificates theretofore and thereafter issued
may continue to express the Exercise Price and the number of Shares (or fraction
of a Share) to be issued upon exercise of a Right as in the initial Right
Certificates issued hereunder but, nevertheless, shall represent the Rights as
so adjusted.
(i) Before taking any action that would cause an adjustment
reducing the price to be paid per whole Share upon exercise of the Rights below
the then par value, if any, of the Shares, the Company shall use reasonable
efforts to take any action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable Shares at such adjusted price per Share.
(j) Anything in this Section 11 to the contrary
notwithstanding, in the event of any recapitalization, reorganization or partial
liquidation of the Company or similar transaction, the Company shall be entitled
to make such further adjustments in the number of Shares (or fraction of a
Share) which may be acquired upon exercise of the Rights, and such adjustments
in the Exercise Price therefor, in addition to those adjustments expressly
required by the other paragraphs of this Section 11, as the Board of Trustees
shall determine to be necessary or appropriate in order for the holders of the
Rights in such event to be treated equitably and in accordance with the purpose
and intent of this Rights Agreement or in order that any such event
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shall not, but for such adjustment, in the opinion of counsel to the Company,
result in the shareholders of the Company being subject to any United States
federal income tax liability by reason thereof.
Section 12. Certification of Adjusted Exercise, Price
or Number of Shares. Whenever an adjustment is made as provided in Sections 11,
13, 23 or 27, the Company shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts giving rise to such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Shares 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) in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment to be made
pursuant to Sections 11, 13, 23 or 27 of this Rights Agreement shall be
effective as of the date of the event giving rise to such adjustment. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
(a) In the event that, at any time after the time that any
Person becomes an Acquiring Person, (x) the Company shall, directly or
indirectly, consolidate with any other Person or Persons, or merge with and into
any other Person or Persons and the Company shall not be the surviving or
continuing corporation of such merger, or (y) any Person or Persons shall,
directly or indirectly, merge with and into, the Company, and the Company shall
be the continuing or surviving corporation of such merger and, in connection
with such merger, all or part of the outstanding Shares of the Company shall be
changed into or exchanged for stock or other securities of any other Person or
of the Company or cash or any other property, or (z) the Company or one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer to
any other Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall sell or
otherwise transfer to any Person or any Affiliate or Associate of such Person in
one or a series of related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) (any event described in clause (x), (y) or (z) of this
Section 13(a) being referred to as a "Section 13 Event"), then, on the first
occurrence of any such event, proper provision shall be made so that (i) each
holder of record of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Exercise Price with respect to the total number of Shares (or fraction of a
Share) for which a Right was exercisable immediately prior to the first
occurrence of the event described in Section 11(a)(ii)
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in accordance with the terms of this Rights Agreement, such number of validly
issued, fully paid and nonassessable and freely tradeable Shares of the
Principal Party (as defined herein) not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the Exercise Price in effect immediately prior to
the first occurrence of a Section 13 Event (or, if an event described in Section
11(a)(ii) has occurred prior to the first occurrence of a Section 13 Event, then
immediately prior to the first occurrence of such event) by the number of Shares
(or fraction of a Share) for which a Right was exercisable immediately prior to
such first occurrence of a Section 13 Event (or, if an event described in
Section 11(a)(ii) has occurred prior to the first occurrence of a Section 13
Event, then immediately prior to the first occurrence of such event), and (2)
dividing that product by 50% of the Fair Market Value (determined as provided in
Section 11(d) hereof) per Share of such Principal Party on the date of
consummation of such Section 13 Event; provided that the Exercise Price and the
number of Shares of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Rights Agreement to reflect any
events occurring after the date of the first occurrence of a Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Rights Agreement; (iii) the term "Company" for all purposes of
this Rights Agreement shall thereafter be deemed to refer to such Principal
Party; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Shares) 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 its Shares thereafter deliverable upon the exercise of
the Rights; provided, however, that, upon the subsequent occurrence of any
merger, consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of Shares, reorganization or other
extra-ordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Exercise Price, such cash, Shares, rights, warrants and other
property which such holder would have been entitled to receive had it, at the
time of such transaction, owned the Shares of the Principal Party purchasable
upon the exercise of a Right, and such Principal Party shall take such steps
(including, but not limited to, reservation of Shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, Shares, rights, warrants and other property and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect following the
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean (i) in the case of any
transaction described in (x) or (y) of the first sentence of Section 13(a)
hereof: (A) the Person that is the issuer of the securities into which Shares of
the Company are converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer the Shares of which have the greatest market
value or (B) if no securities are so issued, (x) the Person that is the other
party to the merger or consolidation and that survives such merger or
consolidation, or, if there is more than one such Person, the Person the Shares
of which have the greatest market value or (y) if the Person that is the other
party to the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or consolidation
(including the Company if it survives); and
(i) in the case of any transaction described in (z) of the
first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power
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cannot be determined, whichever of such Persons which is the issuer of Shares
having the greatest market value of Shares outstanding; provided, however, that
in any such case described in Section 13(b)(i) or (b)(ii) above, if the Shares
of such Person are not at such time and have 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 Shares of
which are and have been so registered, the term "Principal Party" shall refer to
such other Person, or if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Shares of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Shares having the greatest market value of Shares
outstanding.
(c) The Company shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in Section 13(a)
unless the Principal Party shall have a sufficient number of authorized Shares
that have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the Principal Party
shall, upon consummation of such consolidation, merger or sale or transfer of
assets or earning power, assume this Rights Agreement in accordance with
Sections 13(a) and (b) hereof and that all rights of first refusal or preemptive
rights in respect of the issuance of Shares of the Principal Party upon exercise
of outstanding Rights have been waived and that such transaction shall not
result in a default by the Principal Party under this Rights Agreement or under
any other material agreement to which the Principal Party is a party, and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale or transfer of assets or earning power referred to
in Section 13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the date of
expiration of the Rights, and similarly comply with applicable state securities
laws;
(ii) use reasonable efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act. In the event that any of the transactions described in Section
13(a) hereof shall occur at any time after the occurrence of the transaction
described in Section 11(a)(ii) hereof, the Rights which have not theretofore
been exercised shall, subject to the provisions of Section 7(e) hereof,
thereafter be exercisable in the manner described in Section 13(a).
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(d) In case the Principal Party which is to be a party
to a transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, Shares of such Principal Party at less than the then Fair Market Value per
Share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Shares of such Principal Party at less than such then
Fair Market Value (other than to holders of Rights pursuant to this Section 13)
or (ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Shares of such Principal Party pursuant to
the provisions of Section 13, then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Shares upon exercise, redemption or exchange of the Rights or to
distribute certificates which evidence fractional Shares. In lieu of issuing
fractions of Shares, the Company may, at its election, (i) pay to the registered
holder of Right Certificates at the time such Right is exercised or redeemed an
amount in cash equal to the same fraction of the Fair Market Value of a Share or
(ii) cause depositary receipts to be issued evidencing fractions of Shares
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all of the rights, privileges and
preferences to which they would be entitled as owners of the Shares.
(b) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
Shares upon exercise or redemption of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Rights Agreement, except the rights of action given to the Rights Agent
in Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, any holder of record of
the Shares in its capacity as a holder of Rights); and any holder of record of
any Right Certificate (or, prior to the Distribution Date, any holder of record
of the Shares in its capacity as a holder of Rights), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, any holder of record of the Shares in their capacity as
holders of Rights), 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
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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
Rights 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 Rights
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 Rights Agreement.
Section 16. Agreement of Right Holders. Each 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 shall
be evidenced by the certificates for Shares registered in the name of the
holders of the Shares (together, where applicable, with the Summary of Rights)
and not by separate Right Certificates, and each Right shall be transferable
only simultaneously and together with the transfer of Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Share certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Shares or any other
securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of trustees or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in Section 24 hereof), 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.
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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 other disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted to be done by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability relating to the Rights or this Rights
Agreement.
(b) The Rights Agent shall be protected against, and
shall incur no liability for or in respect of, any action taken, suffered or
omitted by it in connection with its administration of this Rights Agreement in
reliance upon any Right Certificate or certificate for Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
Section 19. Merger or Consolidation of, or Change in Name of,
the Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Rights 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 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
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(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; 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; in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Rights Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman, the
Chief Executive Officer, the President or any Vice President and by the
Treasurer or the Secretary of the Company and delivered to the Rights Agent. Any
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Rights
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 Rights
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 Rights 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 Rights
Agreement or in any Right
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Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11, 13 or 23 hereof or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after receipt of a certificate describing
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
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Shares will, when issued, be validly authorized and 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 the Rights 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, the President or any Vice President or the Secretary or the
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 or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become peculiarly interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Rights Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Shares by registered or certified mail. The Company
may remove the Rights Agent or any successor Rights Agent (with or without
cause) 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 Shares by
registered or certified 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.
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Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail to make such appointment within a period of 30 days after
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 incumbent Rights Agent or the holder of
record 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
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination in the conduct of its corporate trust or stock transfer business by
federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $5,000,000 or (b) an
Affiliate controlled by a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed, but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Shares, and
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be. Notwithstanding the foregoing provisions, in
the event of resignation, removal or incapacity of the Rights Agent, the Company
shall have the authority to act as the Rights Agent until a successor Rights
Agent shall have assumed the duties of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option and at any time, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Trustees to reflect any adjustment or change in the Exercise Price per Share
and/or the number or kind or class of Shares of stock or other securities or
property purchasable under the Right Certificates, in either case, made in
accordance with the provisions of this Rights Agreement.
Section 23. Redemption.
(a) The Company may, at its option, redeem all but not
less than all of the then outstanding Rights, at any time prior to the close of
business on the earlier of (i) the tenth day following the Share Acquisition
Date, subject to extension at the option of the Board of Trustees, to such later
date or dates as are, in each case fixed on or prior to the last such date then
in effect on which redemption may then be effected, or (ii) the Final Expiration
Date, at a
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redemption price of $.001 per Right, appropriately adjusted to reflect any share
split, share dividend or similar transaction occurring after the date hereof
(the "Redemption Price"). Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable following an event
described in Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder.
(b) Without any further action and without any notice,
the right to exercise the Rights will terminate effective at the time so
designated by action of the Board of Trustees ordering the redemption of the
Rights, and the only right thereafter of the holders of the Rights shall be to
receive the Redemption Price. Within 10 days after the effective time of the
action of the Board of Trustees ordering the redemption of the Rights, the
Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each notice of redemption
will state the method by which the payment of the Redemption Price will be made.
At the option of the Board of Trustees, the Redemption Price may be paid in cash
to each Rights holder or by the issuance of Shares (and, at the Company's
election pursuant to Section 14(b) hereof, cash or depositary receipts in lieu
of fractions of Shares) having a Fair Market Value equal to such cash payment.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date,
shall propose (i) to effect any of the transactions referred to in Section
11(a)(i) or to pay any dividend to the holders of record of its Shares payable
in Shares of any class or to make any other distribution to the holders of
record of its Shares (other than a regular periodic cash dividend at a rate not
in excess of 150% of the rate of the last cash dividend theretofore paid), or
(ii) to offer to the holders of record of its Shares options, warrants, or other
rights to subscribe for or to purchase Shares (including any security
convertible into or exchangeable for Shares) or Shares of any class or any other
securities, options, warrants, convertible or exchangeable securities or other
rights, or (iii) to effect any reclassification of its Shares or any
recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Shares, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the
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record date for determining holders of record of the Shares for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date or participation therein
by the holders of record of Shares, whichever shall be the earlier. The failure
to give notice required by this Section 24 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) In case any of the transactions referred to in
either Section 11(a)(ii) or Section 13 of this Rights Agreement are proposed,
then, in any such case, the Company shall give to each holder of Rights, in
accordance with Section 25 hereof, notice of the proposal of such transaction at
least 10 days prior to consummating such transaction, which notice shall specify
the proposed event and the consequences of the event to holders of Rights under
Section 11(a)(ii) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to each
holder of Rights.
Section 25. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Pennsylvania Real Estate Investment Trust
The Bellevue
200 South Broad Street
Philadelphia, PA 19102
Attn: Executive Vice President and Chief Financial Officer
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of record
of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer and Trust Company
40 Wall Street
New York, New York l0005
Corporate Trust Department
46th Floor
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
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Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable and except as provided in the last sentence of this
Section 26, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights or the Shares. At
any time when the Rights are not then redeemable and except as provided in the
last sentence of this Section 26, the Company may, and the Rights Agent shall if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (a) to cure any ambiguity, (b) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (c) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable, provided, that no such supplement or amendment pursuant to clause (c)
above shall materially adversely affect the interests of the holders of Right
Certificates as such. 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 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this Rights
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price or the Final Expiration Date.
Section 27. Exchange.
(a) The Board of Trustees may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 7(e) hereof) for
Shares at an exchange ratio of one Share per Right, appropriately adjusted to
reflect any share split, share dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Trustees shall
not be empowered to effect such exchange at any time after any Person (other
than an Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Voting Shares then
outstanding.
(b) Immediately upon the action of the Board of
Trustees ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 27 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights (other than a holder of Rights which have become null and void
pursuant to the provisions of Section 7(e) hereof) shall be to receive that
number of Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Shares for Rights
will be effected and, in the event of any partial exchange, the number of
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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 null and void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) The Company shall not be required to issue
fractions of Shares or to distribute share certificates which evidence
fractional Shares. In lieu of such fractional Shares, the Company shall pay to
the registered holders of the Right Certificates with regard to which such
fractional Shares would otherwise be issuable an amount in cash equal to the
same fraction of the Fair Market Value of a whole Share. For the purposes of
this paragraph (c), the Fair Market Value of a whole Share shall be the closing
price of a Share (as determined pursuant to the second sentence of Section 11(d)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 27.
Section 28. Successors. All of the covenants and provisions of
this Rights 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. Benefits of this Rights Agreement. Nothing in this
Rights 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 registered holders of Shares in their
capacity as holders of Rights) any legal or equitable right, remedy or claim
under this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of record of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of Shares in their capacity as holders of Rights).
Section 30. Interpretation. Any determination or
interpretation required to be made by the Board of Trustees for purposes of
applying the definitions contained in Section 1 or in connection with any other
provision hereof shall be made by a majority of the Board of Trustees in its
good faith judgment, which determination shall be binding on the Rights Agent
and the holders of the Rights.
Section 31. Pennsylvania Contract. This Rights Agreement and
each Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the laws of such
Commonwealth applicable to contracts to be made and performed entirely within
such Commonwealth.
Section 32. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
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Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Severability. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 35. Trust Provision. This Agreement and all documents,
agreements, understandings and arrangements relating thereto have been
negotiated, executed and delivered on behalf of the Company by the trustees or
officers thereof in their representative capacity under the Trust Agreement of
December 16, 1997 and not individually, and bind only the trust estate of the
Company, and no trustee, officer, employee, agent or shareholder of the Company
shall be bound or held to any personal liability or responsibility in connection
with the agreements, obligations and undertakings of the Company thereunder, and
any person or entity dealing with the Company in connection therewith shall look
solely to the trust estate for the payment of any claim or for the performance
of any agreement, obligation or undertaking thereunder. The Rights Agent
acknowledges and agrees that each agreement and other document executed by the
Company in accordance with or in respect of this transaction shall be deemed and
treated to include in all respects and for all purposes the foregoing
exculpatory provision.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
By: /s/ Ronald Rubin
-----------------------------------
Name: Ronald Rubin
Title: Chief Executive Officer
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By: /s/ Herbert J. Lemmer
-----------------------------------
Name: Herbert J. Lemmer
Title: Vice President
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<PAGE>
EXHIBIT A
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
SUMMARY OF RIGHTS TO PURCHASE SHARES OF BENEFICIAL INTEREST
AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS
ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR
AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO OR EXERCISED BY ANY PERSON.
On April 29, 1999, the Board of Trustees of Pennsylvania Real
Estate Investment Trust (the "Company") declared a distribution of one share
purchase right (a "Right") for each outstanding Share of Beneficial Interest,
without par value, of the Company (the "Shares"). The distribution is payable as
of May 14, 1999 to shareholders of record on that date. Each Right entitles the
registered holder thereof to purchase from the Company one Share at a price of
$70.00 (the "Exercise Price"). The description and terms of the Rights are set
forth in a Rights Agreement, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and American Stock Transfer and Trust
Company, as rights agent (the "Rights Agent"). As discussed below, initially the
Rights will not be exercisable, certificates will not be sent to shareholders
and the Rights will automatically trade with the Shares. Until the day which is
the earlier of (i) the tenth day after the date of the public announcement that
a person or group of affiliated or associated persons (collectively, an
"Acquiring Person") has acquired beneficial ownership (as described in the
Rights Agreement) of 15% or more of the Company's outstanding voting shares, and
(ii) the tenth business day (or such later date as may be determined by the
Board of Trustees prior to the time that any person or group of affiliated or
associated persons becomes an Acquiring Person) after the commencement or public
announcement of a person's or group's intention to commence a tender or exchange
offer whose consummation would result in the beneficial ownership of 15% or more
of the outstanding voting shares of the Company, even if no purchases actually
occur pursuant to such offer (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any Share
certificates outstanding as of May 14, 1999, by such Share certificates
themselves together with a copy of this Summary of Rights. Notwithstanding the
foregoing, the definition of Acquiring Person shall not include (A) the Company,
(B) any Subsidiary of the Company (as that term is defined in the Rights
Agreement, (C) any employee benefit plan or employee stock plan of the Company
or of any Subsidiary of the Company or any trust or other entity organized,
appointed, established or holding Shares for or pursuant to the terms of any
such plan or (D) any person or group of affiliated or associated persons whose
beneficial ownership of 15% or more of the outstanding voting shares of the
Company results solely from (i) any action or transaction approved by the
members of the Board of Trustees who are neither affiliates nor associates of
such person, nor officers of the Company, before such person or group of
affiliated or associated persons acquires such 15% beneficial ownership, or (ii)
a reduction in the number of outstanding voting shares of
A-1
<PAGE>
the Company pursuant to a transaction or transactions approved by the Board of
Trustees (provided that any such person or group of affiliated or associated
persons that does not become an Acquiring Person by reason of clause (i) or (ii)
above shall become an Acquiring Person upon its acquisition of an additional 1%
of the Company's outstanding voting shares unless such acquisition of additional
voting shares will not result in such person or group of affiliated or
associated persons becoming an Acquiring Person by reason of such clause (i) or
(ii)).
The Rights Agreement provides that, until the Distribution
Date, the Rights will be represented by and transferred with, and only with, the
Shares. Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Share certificates issued after May 14, 1999 will contain a legend
incorporating the Rights Agreement (and the Rights represented thereby) by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any of the Share certificates
outstanding as of May 14 1999, with or without a copy of this Summary of Rights,
also will constitute the surrender or transfer, as applicable, of the Rights
associated with the Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Shares as of the close of business on the Distribution Date, and such separate
Right Certificates alone will evidence the Rights from and after the
Distribution Date. The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on March 31, 2009, unless
earlier redeemed or exchanged by the Company as described below. The number of
Shares issuable upon exercise of the Rights are subject to certain adjustments
from time to time in the event of, among other things, a Share dividend on, or a
subdivision or combination of, the Shares. The Exercise Price is subject to
adjustment in the event of, among other things, extraordinary distributions of
cash or other property to holders of Shares.
Unless the Rights are earlier redeemed or exchanged, in the
event that a person or group of affiliated or associated persons becomes an
Acquiring Person, the Rights Agreement provides that each holder of record of a
Right, other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Exercise Price, that number of Shares having a market value at the time of the
transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed or
exchanged, in the event that, after the time that a person or group of
affiliated or associated persons becomes an Acquiring Person, the Company were
to be acquired in a merger or other business combination (in which any Shares
are changed into or exchanged for other securities or assets) or more than 50%
of the assets or earning power of the Company and its subsidiaries (taken as a
whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right, other than the Acquiring Person (whose
Rights will thereupon become null and void), will thereafter have the right to
receive, upon payment of the Exercise Price, that number of shares of common
stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price.
A-2
<PAGE>
The Rights Agreement provides that, notwithstanding any
provision of the Rights Agreement to the contrary, no Right will be exercisable
for a number of Shares that would cause the ownership limit set forth in the
Company's Amended and Restated Trust Agreement (or any amendment or successor
document thereto) to be exceeded. At any time after any person or group of
affiliated or associated persons becomes an Acquiring Person and prior to the
acquisition by such Acquiring Person of 50% or more of the Company's outstanding
voting shares, the Board of Trustees of the Company may exchange the Rights
(other than Rights owned by the Acquiring Person which will have become null and
void), in whole or in part, at an exchange ratio of one Share per Right (subject
to adjustment).
Fractions of Shares which would otherwise be issued upon
exercise or redemption of the Rights may, at the election of the Company, be
evidenced by depositary receipts. The Rights Agreement also provides that the
Company may pay cash in lieu of fractional Shares.
At any time on or prior to the close of business on the tenth
day after a public announcement that a person or group of affiliated or
associated persons has become an Acquiring Person (or such later date as may be
authorized by the Board of Trustees), the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price"),
payable at the election of the Company in cash or Shares. Following the
effective time of the redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
For as long as the Rights are then redeemable, the Company
may, except with respect to the Redemption Price or date of expiration of the
Rights, amend the Rights in any manner, including an amendment to extend the
time period in which the Rights may be redeemed. At any time when the Rights are
not then redeemable, the Company may amend the Rights in any manner that does
not materially adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as a
shareholder of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated May 3, 1999.
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 the same may be amended from time to time, which is incorporated in this
summary description by reference.
A-3
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER March 31, 2009 OR EARLIER AFTER REDEMPTION OR EXCHANGE. AT
THE OPTION OF THE COMPANY, THE RIGHTS ARE SUBJECT TO REDEMPTION, AT $.005 PER
RIGHT, OR EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE EXERCISED BY OR TRANSFERRED TO
ANY PERSON.
Right Certificate
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
This certifies that _____________, or registered assigns, is
the registered owner of the number of rights set forth above (the "Rights"),
each of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of April 30, 1999, as the same may
be amended from time to time (the "Rights Agreement") between Pennsylvania Real
Estate Investment Trust, a Pennsylvania business trust (the "Company"), and
American Stock Transfer and Trust Company (the "Rights Agent") to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M. (New York time) on March 31, 2009
at the principal office of the Rights Agent, or its successors as Rights Agent,
in New York New York, one Share of Beneficial Interest, without par value, of
the Company (the "Shares") at an exercise price of $70.00 (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of Shares (or fraction of a Share) which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events and, upon the
happening of certain events, securities other than Shares, or other property,
may be acquired upon exercise of the Rights evidenced by this Right Certificate,
as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by 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 of the Rights
Agent, the Company and the holders of record of the Right Certificates. Copies
of the Rights Agreement are on file at the principal executive office of the
Company.
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This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record thereof to purchase a like
aggregate number of Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.001 per Right (payable in cash or in Shares). The Rights
Agreement further provides that the Company may, at any time after a Person
becomes an Acquiring Person but before such Person becomes the Beneficial Owner
of 50% or more of the Voting Shares then outstanding (as such terms are defined
in the Rights Agreement), exchange all or part of the then outstanding and
exercisable Rights for Shares at an exchange ratio of one Share per Right
(subject to adjustment).
No fractional Shares are required to be issued upon the
exercise or redemption of any Right or Rights evidenced hereby, and in lieu
thereof the Company may cause depositary receipts to be issued and/or a cash
payment to be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of trustees or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been duly and properly 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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WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of
ATTEST: PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
_________________________________ By: ____________________________
Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By:_______________________________
Authorized Signature
3
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
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(To be executed by the registered holder if such holder desires
to transfer the Right Certificates.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto______________________________________
(Please print name and address of transferee)
Rights evidenced by 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:
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Signature
Signature Guaranteed:
Certificate
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The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined pursuant
to the Rights Agreement).
Dated: _______________________________
Signature
NOTICE
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The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
The undersigned hereby irrevocably elects to exercise
______________________ Rights represented by this Right Certificate to purchase
the Shares of Beneficial Interest issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
Please insert social security or other identifying number:____________________
______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:____________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated:
_____________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the fact of this
Right Certificate)
Signature Guaranteed
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