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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 5, 1997
CASH AMERICA INTERNATIONAL, INC.
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STATE OF TEXAS 1-9733 75-2018239
(STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
1600 WEST 7TH STREET, FORT WORTH, TEXAS 76102
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (817) 335-1100
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ITEM 5. OTHER EVENTS.
On August 5, 1997, the Board of Directors of Cash America
International, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of the Company's common stock, $0.10 par value
(the "Common Stock"), to shareholders of record at the close of business on
August 19, 1997. Each Right entitles the registered holder to initially
purchase from the Company one share of Common Stock at a Purchase Price of
$37.00 per share, subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock upon the earlier of (i) ten (10) business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of fifteen percent (15%) or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date"), or (ii) ten (10) business days (or such
later date as the Board of Directors shall determine) following the
commencement of a tender or exchange offer that would result in a person or
group beneficially owning fifteen percent (15%) or more of such outstanding
shares of Common Stock. The date the Rights separate is referred to as the
"Distribution Date."
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
August 19, 1997, will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. Pursuant to the Rights
Agreement, the Company is not required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. Further, pursuant to the Rights Agreement,
the Company reserves the right to require, prior to the occurrence of a
Triggering Event (defined below), that, upon any exercise of Rights, a number
of Rights be exercised so that only whole shares of Common Stock would be
issued.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on August 5, 2007, unless earlier redeemed by
the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates will represent the Rights. Except in connection with shares of
Common Stock issued or sold pursuant to the exercise of stock options under any
employee plan or arrangements, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, or as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that (i) the Company is the surviving corporation in a
merger or other business combination with an Acquiring Person (or any associate
or affiliate thereof) and its Common Stock remains outstanding and unchanged,
(ii) any person shall acquire beneficial ownership of more than fifteen percent
(15%) of the outstanding shares of Common Stock (except pursuant to (A) certain
<PAGE> 3
consolidations or mergers involving the Company or sales or transfers of the
combined assets, cash flow or earning power of the Company and its subsidiaries
or (B) an offer for all outstanding shares of Common Stock at a price and upon
terms and conditions which a majority of the Disinterested Directors (as
defined below) determines to be in the best interests of the Company and its
shareholders), or (iii) there occurs a reclassification of securities, a
recapitalization of the Company or any of certain business combinations or
other transactions (other than certain consolidations and mergers involving the
Company and sales or transfers of the combined assets, cash flow or earning
power of the Company and its subsidiaries) involving the Company or any of its
subsidiaries which has the effect of increasing by more than one percent (1%)
the proportionate share of any class of the outstanding equity securities of
the Company or any of its subsidiaries beneficially owned by an Acquiring
Person (or any associate or affiliate thereof), each holder of a Right (other
than the Acquiring Person and certain related parties) will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the Purchase Price of the Right. However, Rights are not exercisable
following the occurrence of either of the events described above until such
time as the Rights are no longer redeemable by the Company as described below.
Notwithstanding any of the foregoing, following the occurrence of any of the
events described in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
For example, if the purchase price for the Common Stock associated
with a Right is $37.00, then the holder of a Right would be entitled to
purchase $37.00 worth of Common Stock for $37.00. If the Common Stock had a
market value of $18.50 per share at that time, then the holder of each Right
would be entitled to purchase four shares of Common Stock for $37.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company shall enter into a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is the surviving corporation in a consolidation, merger or similar
transaction pursuant to which all or part of the outstanding shares of Common
Stock are changed into or exchanged for stock or other securities of any other
person or cash or any other property or (iii) more than 50% of the combined
assets, cash flow or earning power of the Company and its subsidiaries is sold
or transferred (in each case other than certain consolidations with, mergers
with and into, or sales of assets, cash flow or earning power by or to
subsidiaries of the Company as specified in the Rights Agreement), each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right. The events described in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (ii) if
holders of the Common Stock are granted certain rights, options or warrants to
subscribe for Common Stock or securities convertible into Common Stock at less
than the current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness, cash
(excluding regular quarterly cash dividends), assets (other than dividends
payable
3
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in Common Stock) or subscription rights or warrants (other than those referred
to in (ii) immediately above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least one percent (1%) of
the Purchase Price. No fractional shares of Common Stock are required to be
issued) and, in lieu thereof, the Company may make an adjustment in cash based
on the market price of the Common Stock on the trading date immediately prior
to the date of exercise.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or more
of the outstanding shares of Common Stock, the Board of Directors of the
Company may, without payment of the Purchase Price by the holder, exchange the
Rights (other than Rights owned by such person or group, which will become
void), in whole or in part, for shares of Common Stock at an exchange ratio of
one-half (1/2) the number of shares of Common Stock for which a Right is
exercisable immediately prior to the time of the Company's decision to
exchange the Rights (subject to adjustment).
At any time until ten (10) business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (payable in cash, shares of Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
The term "Disinterested Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Disinterested
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of an acquiring company as set forth above or in
the event that the Rights are redeemed.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date; provided,
that any amendments after the Stock Acquisition Date must be approved by a
majority of the Disinterested Directors. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, inconsistency or defect, to make changes which do not adversely
affect the interest of holders of Rights (excluding the interest of any
Acquiring Person) or to shorten or lengthen any time period under the Rights
Agreement;
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provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable; and,
provided, that any amendments after the Stock Acquisition Date must be approved
by a majority of the Disinterested Directors.
A copy of the Rights Agreement specifying the terms of the Rights,
including, as Exhibit A to the Agreement, the form of Rights Certificate, and
the Company's press release announcing the declaration of the Rights are filed
with this Report as Exhibits and are incorporated in this Report by reference.
A copy of the Rights Agreement is also available free of charge from the
Rights Agent. The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
4 Rights Agreement, dated as of August 5, 1997, by and between Cash
America International, Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, including exhibits thereto.
99 Press Release dated August 5, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
CASH AMERICA INTERNATIONAL, INC.
August 5, 1997 By: /s/ Hugh Simpson
-------------------------------------
Hugh A. Simpson
Senior Vice President,
General Counsel and Secretary
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INDEX TO EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ -------
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4 Rights Agreement, dated as of August 5, 1997, by and between Cash
America International, Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, including exhibits thereto.
99 Press Release dated August 5, 1997
</TABLE>
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EXHIBIT 4
CASH AMERICA INTERNATIONAL, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF AUGUST 5, 1997
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TABLE OF CONTENTS
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SECTION PAGE
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Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Distribution Date; Rights Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Common Stock Certificates; Summary of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Form; Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Acquiring Person Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Registration and Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Issuance of New Rights Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . 10
(a) Exercise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Rights Agent Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) Partial Exercise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) Termination of Acquiring Person's Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(f) Surrender of Rights Certificates; Identity of Beneficial Owner. . . . . . . . . . . . . . . . . . 12
Section 8. Cancellation and Disposition of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. Reservation and Availability of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Reservation of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Registration under the Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) Covenant Regarding Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Transfer Taxes and Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 10. Common Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
(i)
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Section 11. Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Certain Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Purchase Price Adjustment -- Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Purchase Price Adjustment -- Cash, Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Purchase Price Adjustment Threshold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(f) Equivalent Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Post-Adjustment Rights Issuances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(h) Common Stock Anti-Dilution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(i) Adjustment of Number of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(j) Rights Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(k) Adjustment Below Par Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(l) Adjustment Effective as of Future Date; Exercise. . . . . . . . . . . . . . . . . . . . . . . . . 21
(m) Tax Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(n) Restriction on Certain Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(o) Restriction Against Diminishing Benefits of the Rights. . . . . . . . . . . . . . . . . . . . . . 22
(p) Common Stock Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . 22
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Flip-over Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Principal Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(c) Supplemental Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(d) Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(a) Fractional Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Fractional Shares of Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(c) Waiver of Fractional Rights and Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 17. Rights Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . 28
(a) Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) Prior Countersignatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
(ii)
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Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Legal Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(b) Certification by the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(c) Liability for Negligence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(d) Statements of Fact or Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(e) Agreement; Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(f) Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(g) Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Dealing in Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(i) Agents; Reasonable Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(j) Expenses; Repayment Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(k) Exercise of Rights; Consultation with Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Effect of Redemption; Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Right to Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) Effect of Exchange; Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(c) Common Stock Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(d) Insufficient Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(e) Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(a) Preferred Stock Transactions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(b) Other Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 29. Determinations and Actions by the Board of Directors,
Disinterested Directors, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Exhibit A Form of Rights Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Summary of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
(iv)
<PAGE> 6
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 5, 1997, between Cash America
International, Inc., a Texas corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C. (the "Rights Agent").
RECITALS
On August 5, 1997, (the "Rights Dividend Declaration Date"), the Board
of Directors of the Company authorized and declared a dividend distribution of
one Right for each share of Common Stock (as defined in Section 1 below) of the
Company outstanding at the close of business on August 19, 1997 (the "Record
Date"). It has authorized the issuance of one Right (as that number may be
adjusted pursuant to the provisions of Section 11(p) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights -- Common Stock
Adjustments) for each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date (as defined in Section 1 below), each Right
initially representing the right to purchase one share of Common Stock, upon
the terms and subject to the conditions provided in this Agreement (the
"Rights");
AGREEMENT
In consideration of the premises and the mutual agreements made in
this Agreement, the parties hereby agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" means any Person who or which,
together with all Affiliates and Associates of that Person, is the Beneficial
Owner (as that term is defined in (f) in this Section 1) of 15% or more of the
shares of Common Stock then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any
such plan, or (iv) any Person who becomes an Acquiring Person solely as a
result of a reduction in the number of shares of Common Stock outstanding due
to the repurchase of shares of Common Stock by the Company, unless and until
such Person shall purchase or otherwise become (as a result of actions taken by
such Person or its Affiliates or Associates) the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding shares
of Common Stock.
(b) "Act" means the Securities Act of 1933, as amended
and in effect from time to time.
(c) "Adjustment Shares" has the meaning specified in
Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
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<PAGE> 7
(d) "Affiliate" and "Associate" have the respective
meanings given to those terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(e) "Agreement" means this Rights Agreement as originally
executed or as it may from time to time be supplemented or amended pursuant to
the applicable provisions of this Agreement.
(f) A Person is deemed the "Beneficial Owner" of, and is
deemed to "beneficially own," any securities:
(i) which that Person or any of that Person's
Affiliates or Associates, directly or indirectly, has the right to acquire
(whether that right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a Person will not,
for purposes of this paragraph (i), be deemed the "Beneficial Owner" of or to
"beneficially own," (A) securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates or Associates
until the tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event, which Rights were acquired by
such Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) (Issuance of Rights Certificates
- -- Distribution Date; Rights Certificates) or Section 22 (Issuance of New
Rights Certificates) (the "Original Rights") or pursuant to Section 11(i)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Adjustment of Number of Rights) in connection with an adjustment made with
respect to any Original Rights;
(ii) which that Person or any of that Person's
Affiliates or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this subparagraph (ii)
as a result of an agreement, arrangement or understanding to vote such security
if that agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not also then
reportable by that Person on a Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are "beneficially owned," directly or
indirectly, by any other Person (or any Affiliate or Associate of the 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 pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this paragraph (f)) or
disposing of any voting securities of the Company;
2
<PAGE> 8
provided, however, that nothing in this paragraph (f) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of or to "beneficially own," any securities acquired through such
person's participation in good faith in a firm commitment underwriting until
the expiration of forty (40) calendar days after the date of the acquisition.
(g) "Board" means the Board of Directors of the Company.
(h) "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date means 5:00
P.M., Fort Worth, Texas time, on that date. However, if that date is not a
Business Day, it means 5:00 P.M., Fort Worth, Texas time, on the next
succeeding Business Day.
(j) "Common Stock" means the common stock, par value
$0.10 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(k) "Common Stock Equivalents" has the meaning specified
in Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares
or Number of Rights -- Certain Adjustments).
(l) "Company" means the Person named as the "Company" in
the first paragraph of this Agreement until a successor corporation becomes
such, or until a Principal Party assumes, and thereafter is liable for, all
obligations and duties of the Company under this Agreement, pursuant to its
applicable provisions. Then, "Company" means the successor corporation or
Principal Party.
(m) "Current Market Price" has the meaning specified in
Section 11(d) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Current Market Price).
(n) "Current Value" have the meaning specified in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Certain Adjustments).
(o) "Disinterested Director" means (i) any member of the
Board, while that Person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate, and who was a member of the Board prior to the date of this
Agreement, or (ii) any Person who subsequently becomes a member of the Board,
while such Person is a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative or
nominee of an Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is recommended or
approved by a majority of the Disinterested Directors.
3
<PAGE> 9
(p) "Distribution Date" has the meaning specified in
Section 3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates).
(q) "Exchange Act" means the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement.
(r) "Exchange Number" means one-half of the number of
shares of Common Stock or shares or other units of other property for which a
Right is exercisable immediately prior to the time of the action of the Board
to exchange the Rights.
(s) "Expiration Date" has the meaning specified in
Section 7(a) (Exercise of Rights; Purchase Price; Expiration Date of Rights --
Exercise).
(t) "Final Expiration Date" means the Close of Business
on August 5, 2007.
(u) "Flip-in Event" means any event described in Section
11(a)(ii) (A) or (B) (Adjustment of Purchase Price; Number and Kind of Shares
or Number of Rights -- Certain Adjustments).
(v) "Flip-in Trigger Date" has the meaning specified in
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
(w) "Flip-over Event" means any event described in
clauses (x), (y) or (z) of Section 13(a) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Flip-over Event).
(x) "Original Rights" has the meaning specified in
Section 1(f)(i) (Certain Definitions).
(y) "Person" means any individual, firm, corporation,
partnership or other entity.
(z) "Principal Party" has the meaning specified in
Section 13(b) (Consolidation, Merger or Sale or Transfer of Assets or Earning
Power -- Principal Party).
(aa) "Purchase Price" has the meaning specified in Section
4(a) (Form of Rights Certificates -- Form; Date).
(bb) "Record Date" has the meaning specified in the
Recitals at the beginning of this Agreement.
(cc) "Redemption Date" has the meaning specified in
Section 23(a) (Redemption and Termination -- Redemption).
(dd) "Redemption Price" has the meaning specified in
Section 23(a) (Redemption and Termination -- Redemption).
4
<PAGE> 10
(ee) "Rights" has the meaning specified in the Recitals at
the beginning of this Agreement.
(ff) "Rights Agent" means the Person named as the "Rights
Agent" in the first paragraph of this Agreement until a successor Rights Agent
becomes the Rights Agent pursuant to the applicable provisions of this
Agreement. Thereafter "Rights Agent" means such successor Rights Agent. If at
any time there is more than one Person appointed by the Company as Rights Agent
pursuant to the applicable provisions of this Agreement, "Rights Agent" means
and includes each such Person.
(gg) "Rights Certificates" has the meaning specified in
Section 3(a) (Issuance of Rights Certificates -- Distribution Date; Rights
Certificates).
(hh) "Rights Dividend Declaration Date" has the meaning
specified in the Recitals at the beginning of this Agreement.
(ii) "Spread" has the meaning specified in Section
11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights -- Certain Adjustments).
(jj) "Stock Acquisition Date" means the first date of
public announcement (which, for purposes of this definition, includes, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(kk) "Subsidiary" means, with reference to any Person, any
corporation or other entity of which a majority of the voting power of equity
securities or majority of the equity interest is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by that Person.
(ll) "Substitution Period" has the meaning specified in
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments).
(mm) "Trading Day" has the meaning specified in Section
11(d)(i) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights -- Current Market Price).
(nn) "Triggering Event" means any Flip-in Event or any
Flip-over Event.
Section 2. Appointment of Rights Agent. The Company appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions of this Agreement. The Rights Agent accepts the appointment. The
Company may from time to time appoint Co-Rights Agents.
Section 3. Issuance of Rights Certificates.
(a) Distribution Date; Rights Certificates. Until the
earlier of (i) the Close of Business on the tenth (10th) Business Day after the
Stock Acquisition Date (or, if the tenth Business Day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on the
5
<PAGE> 11
Record Date), or (ii) the Close of Business on the tenth (10th) Business Day
(or such later date as the Board determines prior to such time as any Person
becomes an Acquiring Person) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof that Person would be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding (the
earlier of (i) and (ii) being herein referred to in this Agreement as the
"Distribution Date"), the Rights will be evidenced and will be distributable as
provided in the next two sentences. The Rights will be evidenced (subject to
the provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates. The Rights will be transferable only
in connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company, except pursuant to the provisions of
Section 23 (Redemption and Termination)). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records of
the Company, one or more rights certificates, in substantially the form of
Exhibit A to this Agreement (the "Rights Certificates"), evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided in
this Agreement. In the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to Section 11(p) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Common Stock
Adjustments) at the time of distribution of the Rights Certificates, the
Company agrees to make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) (Fractional Rights and Fractional Shares --
Fractional Rights)) so that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional Rights. As
of and after the Distribution Date, the Rights will be evidenced solely by
Rights Certificates.
(b) Common Stock Certificates; Summary of Rights. With
respect to certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights associated with the Common Stock
represented by the certificates will be evidenced by such certificates alone
and the registered holders of such Common Stock will also be the registered
holders of the associated Rights. Until the earlier of the Distribution Date or
the Expiration Date, the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares of Common Stock. On the
Record Date, or as soon as practicable after the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Common Stock, in substantially
the form of Exhibit B to this Agreement (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of shares of Common
Stock as of the close of business of the Record Date, at the address of the
holder shown on the records of the Company.
(c) Legend. Rights will be issued in respect of all
certificates for shares of Common Stock which are issued (whether originally
issued or from the Company's treasury) after the Record Date but prior to the
earliest of the (i) Distribution Date, (ii) the Expiration Date, or (iii) the
Redemption Date, or, in certain circumstances provided in Section 22 (Issuance
of New Rights
6
<PAGE> 12
Certificates) after the Distribution Date. Certificates representing such
shares of Common Stock will also be deemed to be certificates for Rights, and
will bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
TO CERTAIN RIGHTS AS SPECIFIED IN THE RIGHTS AGREEMENT DATED
AS OF AUGUST 5, 1997, BY AND BETWEEN CASH AMERICA
INTERNATIONAL, INC. (THE "COMPANY") AND CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., AS RIGHTS AGENT (THE "RIGHTS
AGREEMENT"). THE TERMS OF THE RIGHTS AGREEMENT ARE
INCORPORATED HEREIN. A COPY OF THE RIGHTS AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. UNDER CERTAIN
CIRCUMSTANCES, AS SPECIFIED IN THE RIGHTS AGREEMENT, THE
RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO
LONGER BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL
TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS
AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST FOR IT. UNDER
CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend, until the
earliest of (i) the Distribution Date, (ii) the Expiration Date, and (iii) the
Redemption Date, (x) the Rights associated with the Common Stock represented by
such certificates shall be evidenced by the certificates alone, (y) the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights, and (z) the transfer of any of such certificates shall
also constitute the transfer of the Rights associated with such shares of
Common Stock. In the event that the Company purchases, or acquires any shares
of Common Stock after the Record Date but prior to the Distribution Date, any
rights associated with such shares of Common Stock shall be deemed canceled and
retired so that the Company will not be entitled to exercise any Rights
associated with shares of Common Stock which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) Form; Date. The Rights Certificates (and the forms
of election to purchase and of assignment to be printed on the reverse of the
rights certificates ) shall each be substantially in the form specified in
Exhibit A to this Agreement. They may have such marks of identification or
designation and such legends, summaries or endorsements printed on them which
the Company may
7
<PAGE> 13
deem appropriate and which are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed or any
securities association on whose interdealer quotation system the Rights may be
from time to time authorized for quotation, or to conform to usage. Subject to
the provisions of Section 11 (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) and Section 22 (Issuance of New Rights
Certificates), the Rights Certificates, whenever distributed, shall be dated as
of the Record Date and on their face shall entitle the holders of them to
purchase the number of shares of Common Stock as shall be specified in such
Rights Certificates at the price specified in such Rights Certificates (such
exercise price being referred to in this Agreement as the "Purchase Price").
However, the amount and type of securities purchasable upon the exercise of
each Right and its Purchase Price is subject to adjustment as provided in this
Agreement.
(b) Acquiring Person Legend. Any Rights Certificate
issued pursuant to Section 3(a) (Issuance of Rights Certificates --
Distribution Date; Rights Certificates) or Section 22 (Issuance of New Rights
Certificates) that represents Rights beneficially owned by (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Disinterested Directors have determined is
part of a plan, arrangement or understanding which has as a primary purpose or
effect avoidance of Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's Rights) and any
Rights Certificate issued pursuant to Section 6 (Transfer, Split Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates), Section 11 (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights) or Section 22 (Issuance of New Rights
Certificates) upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT DATED AS OF AUGUST 5, 1997, BY AND
BETWEEN CASH AMERICA INTERNATIONAL, INC. AND CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., AS RIGHTS AGENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) (EXERCISE OF RIGHTS;
PURCHASE PRICE; EXPIRATION DATE OF RIGHTS-- TERMINATION OF ACQUIRING
PERSON'S RIGHTS) OF SUCH AGREEMENT.
8
<PAGE> 14
Section 5. Countersignature and Registration.
(a) Signatures. The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature, and may have
affixed thereto the Company's seal or a facsimile of the seal which shall be
attested to by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates 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 has signed any of the Rights Certificates ceases to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed the
Rights Certificates had not ceased to be such officer of the Company. Any
Rights Certificates may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, is a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Registration and Transfer. Following the
Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate place for surrender
of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued under this Agreement. These books
shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Procedure. Subject to the provisions of Section 4(b)
(Form of Rights Certificates -- Acquiring Person Legend), Section 7(e)
(Exercise of Rights; Purchase Price; Expiration Date of Rights -- Termination
of Acquiring Person's Rights) and Section 14 (Fractional Rights and Fractional
Shares), at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of shares of Common Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates must make such request in writing delivered
to the Rights Agent at the principal office or offices of the Rights Agent
designated for that purpose. The registered holder must also surrender at that
office the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged. Neither the Rights Agent nor the Company will be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Rights Certificate until the registered holder has completed
and signed the certificate contained in the form of assignment on the reverse
side of the Rights Certificate and provides any additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company reasonably requests. Thereupon, the Rights
Agent shall, subject to Section 4(b), Section 7(e) and
9
<PAGE> 15
Section 14, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Issuance of New Rights Certificates. Upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Rights Certificate, and, in
case of loss, theft or destruction, of indemnity or security satisfactory to
them, and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate which has been lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Exercise. Subject to Section 7(e) (Exercise of
Rights; Purchase Price; Expiration Date of Rights -- Termination of Acquiring
Person's Rights), the registered holder of any Rights Certificate may exercise
the Rights evidenced by it (except as otherwise provided in this Agreement,
including, without limitation, the restrictions on exercisability specified in
Section 9(c) (Reservation and Availability of Capital Stock -- Registration
under the Act), Section 11(a)(iii) (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights -- Certain Adjustments), Section 23(a)
(Redemption and Termination -- Redemption), and Section 24(b) (Exchange --
Effect of Exchange; Procedure)) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side of the Rights
Certificate duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for this purpose, together with payment
of the aggregate Purchase Price with respect to the total number of shares of
Common Stock (or following a Triggering Event, Common Stock, or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable and an amount equal to any applicable
transfer tax, at or prior to the earliest of (i) the Final Expiration Date,
(ii) the Redemption Date established in Section 23(a), or (iii) the expiration
of the Rights pursuant to Section 13(d) (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power -- Exceptions) (the earliest of (i), (ii)
and (iii) being referred to in this Agreement as the "Expiration Date"). The
payment of the Purchase Price and the applicable transfer tax, if any (as such
amount may be reduced pursuant to Section 11(a)(iii) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights -- Certain Adjustments)),
may be made (x) in cash, (y) by certified check, cashier's check or money order
payable to the order of the Company, or (z) by delivery of a certificate or
certificates (with appropriate stock powers executed in blank attached thereto)
evidencing a number of shares of Common Stock equal to the then Purchase Price
divided by the closing price (as determined pursuant to Section 11(d)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Current Market Price) per share of Common Stock on the Trading Day immediately
preceding the date of such exercise. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a), the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate. The
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<PAGE> 16
Company reserves the right to require prior to the occurrence of a Triggering
Event that upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Common Stock would be issued.
(b) Purchase Price. The Purchase Price for each share of
Common Stock pursuant to the exercise of a Right is initially $37.00. The
Purchase Price is subject to adjustment from time to time as provided in
Section 11 (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights) and Section 13(a) (Consolidation, Merger or Sale or Transfer of
Assets or Earning Power -- Flip-over Event). The Purchase Price is payable in
accordance with paragraph (a) of this Section 7.
(c) Rights Agent Actions. Upon receipt of a Rights
Certificate representing exercisable Rights and the compliance by the holder of
the Rights Certificate with paragraph (a) of this Section 7, the Rights Agent
shall, subject to Section 20(k) (Duties of Rights Agent -- Exercise of Rights;
Consultation with Company), promptly (i) requisition from any transfer agent of
the shares of Common Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of shares of
Common Stock to be purchased (the Company irrevocably authorizing its transfer
agent to comply with all such requests); (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 (Fractional Rights and Fractional Shares); (iii) after
receiving them, deliver the certificates to or upon the order of the registered
holder of a Rights Certificate, registered in the name or names as may be
designated by the holder; and (iv) after receiving it, deliver the cash, if
any, to or upon the order of the registered holder of the Rights Certificate.
(d) Partial Exercise. In case the registered holder of
any Rights Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to, or
upon the order of the registered holder of the Rights Certificate, registered
in the name or names as may be designated by the holder, subject to the
provisions of Section 14 (Fractional Rights and Fractional Shares).
(e) Termination of Acquiring Person's Rights.
Notwithstanding anything in this Agreement to the contrary, from and after the
first occurrence of a Flip-in Event, any Rights beneficially owned by (i) an
Acquiring Person, or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after such Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Disinterested
Directors have determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company will use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
(Form of Rights Certificates -- Acquiring
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<PAGE> 17
Person Legend) are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of its respective
Affiliates, Associates or transferees under this Agreement.
(f) Surrender of Rights Certificates; Identity of
Beneficial Owner. 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 specified in this Section 7 unless the registered holder has (i)
completed and signed the certificate contained in the form of election to
purchase specified on the reverse side of the Rights Certificate surrendered
for the exercise, and (ii) provided additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company reasonably requests.
Section 8. Cancellation and Disposition of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or any
of its agents, 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
Rights Certificates shall be issued in lieu of them except as expressly
permitted by any of the provisions of this Agreement. The Company agrees to
deliver to the Rights Agent for cancellation, and the Rights Agent shall so
cancel, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall dispose of all
canceled Rights Certificates in accordance with its policies. Upon request,
the Rights Agent shall deliver to the Company a certificate or other written
instrument describing such disposition.
Section 9. Reservation and Availability of Capital Stock.
(a) Reservation of Capital Stock. The Company will use
its best efforts to reserve and kept available out of its authorized and
unissued shares of Common Stock (and, following the occurrence of a Triggering
Event, Common Stock, or other securities, if any) or out of its authorized and
issued shares of Common Stock (and/or other securities) held in its treasury,
the number of shares of Common Stock (and, following the occurrence of a
Triggering Event, Common Stock, or other securities) that, as provided in this
Agreement, including the rights of the Company under Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Certain Adjustments) to otherwise fulfill its obligations, will be sufficient
to permit the exercise in full of all outstanding Rights.
(b) Listing. So long as the shares of Common Stock (and,
following the occurrence of a Triggering Event, Common Stock or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange or authorized for quotation on any
interdealer quotation system of any securities association, the Company shall
use its best efforts to cause, from and after the time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange or quoted on such system upon official notice of issuance upon such
exercise.
(c) Registration under the Act. The Company will use its
best efforts to (i) file, as soon as practicable following the earliest date
after the first occurrence of a Flip-in Event on which
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<PAGE> 18
the consideration to be delivered by the Company upon exercise of the Rights
has been determined in accordance with Section 11(a)(iii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Certain
Adjustments), or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement on an appropriate form under the
Act with respect to the securities purchasable upon exercise of the Rights;
(ii) cause a required registration statement to become effective as soon as
practicable after such filing; and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) calendar days after the date
specified in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In addition, if the Company
determines that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
that jurisdiction has not been obtained, the exercise of the Rights is not
permitted under applicable law or a registration statement has not been
declared effective.
(d) Covenant Regarding Capital Stock. The Company will
take all action as may be necessary to ensure that all shares of Common Stock
(and, following the occurrence of a Triggering Event, Common Stock, or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) Transfer Taxes and Charges. The Company will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for shares of Common Stock (or other
securities, as the case may be) upon the exercise of Rights. The Company will
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or delivery of shares of Common Stock (or other
securities, as the case may be) in respect of a name other than, that of the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for shares of Common Stock (or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name
any certificate for a number of shares of Common Stock (or other securities, as
the case may be) is issued upon the exercise of Rights will for all purposes be
deemed to have become the holder of record of such share of Common Stock (or
other securities, as the case may be) represented thereby on, and such
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<PAGE> 19
certificate shall be dated as of, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made. However, if the date of the
surrender and payment is a date upon which the Common Stock (or other
securities, as the case may be) transfer books of the Company are closed, such
Person will be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Stock (or other securities, as the
case may be) transfer books of the Company are open. Prior to the exercise of
the Rights evidenced by a Rights Certificate, the holder of a Rights
Certificate will not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights are exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and will not be entitled to receive any
notice of any proceedings of the Company, except as provided in this Agreement.
Section 11. Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) Certain Adjustments.
(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the Common
Stock payable in shares of Common Stock, (B) subdivide or split the
outstanding Common Stock, (C) combine the outstanding Common Stock
into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) (Exercise
of Rights; Purchase Price; Expiration Date of Rights -- Termination of
Acquiring Person's Rights), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, split, combination or reclassification, and the number
and kind of shares of Common Stock or capital stock, as the case may
be, issuable 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 aggregate adjusted Purchase Price then in
effect necessary to exercise a Right in full, the aggregate number and
kind of shares of Common Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date
and at a time when the Common Stock (or other capital stock, as the
case may be) transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, split, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event:
(A) (1) any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, at any time
after the date of this Agreement, directly or indirectly,
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<PAGE> 20
merges into the Company or otherwise combines with the Company
and the Company is the continuing or surviving corporation of
that merger or combination and the Common Stock of the Company
remains outstanding and unchanged, or (2) subject to Section
23 (Redemption and Termination), any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall,
at any time after the Rights Dividend Declaration Date, become
an Acquiring Person, unless the event causing such Person to
become an Acquiring Person is a Flip-over Event, or is an
acquisition of shares of Common Stock pursuant to a tender
offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by a majority
of the Disinterested Directors after receiving advice from one
or more investment banking firms selected by the Disinterested
Directors, to be (a) at a price which is fair to the
stockholders of the Company (taking into account all factors
which the Disinterested Directors deem relevant including,
without limitation, prices which could reasonably be achieved
if the Company or its assets were sold on an orderly basis
designed to realize maximum value) and (b) otherwise in the
best interests of the Company and its stockholders, other than
such Acquiring Person, its Affiliates and its Associates; or
(B) during such time as there is an
Acquiring Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a transaction
or transactions to which the provisions of Section 13(a)
(Consolidation, Merger or Sale or Transfer of Assets or
Earning Power -- Flip-over Event) apply (whether or not with
or into or otherwise involving an Acquiring Person) which has
the effect, directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
subsidiaries which is directly or indirectly beneficially
owned by any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, then, promptly following the occurrence
of any such Flip-in Event (whether described in Section
11(a)(ii)(A) or (B)), proper provision shall be made so that
each holder of a Right (except as provided below and in
Section 7(e) (Exercise of Rights; Purchase Price; Expiration
Date of Rights -- Termination of Acquiring Person's Rights))
shall thereafter have the right to receive, upon exercise of
the Right at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of the number of
shares of Common Stock for which a Right was before that time
exercisable, such number of shares of Common Stock of the
Company that equals the result obtained by (x) multiplying the
then current Purchase Price by the then number of shares of
Common Stock for which a Right was exercisable immediately
prior to the first occurrence of a Flip-in Event, and (y)
dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by 50% of
the Current Market Price per share of Common Stock on the
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<PAGE> 21
date of such first occurrence (such number of shares being
referred to as the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock that are authorized by the Company's Articles of
Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is 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 agrees,
upon the first occurrence of a Flip-in Event, to: (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price
(such excess, the "Spread"), and (B) with respect to each Right,
subject to Section 7(e)(Exercise of Rights; Purchase Price; Expiration
Date of Rights -- Termination of Acquiring Person's Rights), make
adequate provision to substitute for the Adjustment Shares (1) cash,
(2) a reduction in the Purchase Price, (3) other equity securities of
the Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board has deemed to have
essentially the same value or economic rights as shares of Common
Stock (such shares of securities being referred to as "Common Stock
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 (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment
banking firm selected by the Board. However, if the Company has not
made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) calendar days following the later of (x) the first
occurrence of a Flip-in Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) (Redemption and
Termination -- Redemption) expires (the later of (x) and (y) being
referred to in this Agreement as the "Flip-in Trigger Date"), then the
Company will be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (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 determines in good faith that it is likely that
sufficient additional shares of Common Stock or other equity
securities could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) calendar day period specified above may be
extended to the extent necessary, but not more than ninety (90)
calendar days after the Flip-in Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such period, the "Substitution Period"). To the
extent that the Company determines that some action needs to be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) agrees to provide, subject to Section
7(e), that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares of Common Stock or other equity
securities 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 the Common Stock shall be the
Current Market Price per share of the Common Stock on the Flip-in
Trigger Date
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<PAGE> 22
and the value of any Common Stock Equivalent shall be deemed to have
the same value as the Common Stock on such date.
(iv) If the rules of the national securities
exchange which is registered pursuant to Section 6 of the Exchange
Act, or of the national securities association which is registered
pursuant to Section 15A of the Exchange Act, on which the Common Stock
is principally traded would prohibit such exchange or association from
listing or continuing to list, or from authorizing for or continuing
quotation and/or transaction reporting through an inter-dealer
quotation system, the Common Stock or other equity securities of the
Company if the Rights were to be exercised for shares of Common Stock
in accordance with subparagraph (ii) of this Section 11(a) because
such issuance would nullify, restrict or disparately reduce the per
share voting rights of holders of Common Stock, the Company shall: (A)
determine 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) equity securities of the Company, including,
without limitation, Common Stock Equivalents, other than securities
which would have the effect of nullifying, restricting or disparately
reducing the per share voting rights of holders of Common Stock, (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 based upon the advice of a recognized investment banking firm
selected by the Board. However, if the Company has not made adequate
provision to deliver value pursuant to clause (B) above within thirty
(30) calendar days following the Flip-in 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, cash
having an aggregate value equal to the Spread. To the extent that the
Company determines that some action needs to be taken pursuant to the
first sentence of this Section 11(a)(iv), the Company (x) shall
provide, subject to Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights -- Termination of Acquiring Person's
Rights), that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights, but not
longer than ninety (90) calendar days after the Flip-in Trigger Date,
in order to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value of the
distribution. In the event of any such suspension, the Company will
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)(iv), the value of the Common Stock
shall be the Current Market Price per share of the Common Stock on the
Flip-in Trigger Date and the value of any Common Stock Equivalent
shall be deemed to have the same value as the Common Stock on such
date.
(b) Purchase Price Adjustment -- Capital Stock. In case
the Company fixes a record date for the issuance of rights, options or warrants
to all holders of Common Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such record date)
Common Stock, Common Stock Equivalents, or securities convertible into Common
Stock, or Common Stock Equivalents, at a price per share of Common Stock (or
having a conversion price per share, if a security convertible into Common
Stock, or Common Stock Equivalents) less than the Current Market Price per
share of Common Stock on such record date, the
17
<PAGE> 23
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to that record date
by a fraction, the numerator of which will be the number of shares of Common
Stock outstanding on such record date, plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares of
Common Stock (and/or Common Stock Equivalents) so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date, plus the number of additional shares of Common Stock and/or Common Stock
Equivalents to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid by delivery of consideration part or all of
which may be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Shares of Common Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) Purchase Price Adjustment -- Cash, Assets, etc. In
case the Company shall fix a record date for a distribution to all holders of
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights Purchase Price Adjustment -- Capital Stock)), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Common Stock and the denominator of
which shall be such Current Market Price per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) Current Market Price. For the purpose of any
computation under this Agreement, other than computations made pursuant to
Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments) the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of the Common Stock for the thirty (30) consecutive Trading
Days immediately prior to such date. For purposes of computations made
pursuant to Section 11(a)(iii) the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the ten (10) consecutive Trading Days
immediately
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<PAGE> 24
following such date. However, in the event that the Current Market Price per
share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights), or (B) any subdivision, combination or reclassification of such Common
Stock and the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification shall not have
occurred prior to the commencement of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as specified above, then, and in each such case,
the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each Trading Day shall be the last
sale price, regular way, or, in case no such sale takes place on such Trading
Day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the- counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or such other system
then in use, or, if on any such date the shares of Common Stock are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board. If on any such date no market maker is making a market
in the Common Stock, the fair value of such shares on such date as determined
in good faith by the Board shall be used. The term "Trading Day" means a day on
which the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, Current Market Price per share shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Purchase Price Adjustment Threshold. Anything herein
to the contrary notwithstanding, no adjustment in the Purchase Price will be
required unless the adjustment would require an increase or decrease of at
least one percent (1%) in the Purchase Price; provided however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights) shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 will be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) Equivalent Adjustments. If as a result of an
adjustment made pursuant to Section 11(a)(ii) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Certain Adjustments) or
Section 13(a) (Consolidation Merger or Sale or Transfer of Assets or Earning
Power -- Flip-over Event) the holder of any Right thereafter exercised shall
become entitled
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<PAGE> 25
to receive any shares of capital stock other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Common Stock shall apply on like terms to any such other
shares.
(g) Post-Adjustment Rights Issuances. All Rights
originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of shares of Common Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Common Stock Anti-Dilution. Unless the Company shall
have exercised its election as provided in Section 11(i) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Adjustment of
Number of Rights), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights -- Purchase Price Adjustment -- Capital
Stock) and Section 11(c) (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights -- Purchase Price Adjustment -- Cash, Assets, etc.),
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of shares of Common Stock (calculated to the nearest one ten-thousandth)
obtained by (i) multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) Adjustment of Number of Rights. The Company may
elect on or after the date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the number of shares of
Common Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be exercisable
for the number of shares of Common Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company agrees to make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day after
that day, but, if the Rights Certificates have been issued, shall be at least
ten (10) calendar days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 (Fractional Rights and Fractional Shares) the additional Rights to
which such holders shall be entitled as a result of such adjustment. In the
alternative, at the option of the Company, the Company shall cause to be
distributed to such holders of record in substitution and replacement for the
Rights
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<PAGE> 26
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after the
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for in this Agreement (and may bear,
at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Rights Certificates. Irrespective of any adjustment
or change in the Purchase Price or the number of shares of Common Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per share and
the number of shares which were expressed in the initial Rights Certificates
issued hereunder.
(k) Adjustment Below Par Value. Before taking any action
that would cause an adjustment reducing the Purchase Price below the then par
or stated value, if any, of the number of shares of Common Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which is or
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of shares of
Common Stock at such adjusted Purchase Price.
(l) Adjustment Effective as of Future Date; Exercise. In
any case in which this Section 11 (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights) requires that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number of shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Tax Adjustments. Anything in this Section 11
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights)
to the contrary notwithstanding, the Company is entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in its good faith
judgment the Board determines to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance wholly for cash
of any shares of Common Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Common Stock or securities which by their
terms are convertible into or exchangeable for shares of Common Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Common Stock
shall not be taxable to such shareholders.
(n) Restriction on Certain Transactions. The Company
agrees that it will not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Restriction Against
Diminishing Benefits of the
21
<PAGE> 27
Rights)), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)), (iii) enter
into a statutory share exchange or similar transaction with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), or (iv) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets,
cash flow or earning power aggregating more than 50% of the assets, cash flow
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger, statutory share
exchange or similar transaction, or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, statutory share exchange or similar
transaction, or sale, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) (Consolidation,
Merger or Sale or Transfer of Assets or Earning Power -- Flip-over Event) shall
have received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates.
(o) Restriction Against Diminishing Benefits of the
Rights. The Company agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 (Redemption and Termination) or Section 27
(Supplements and Amendments) take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits intended
to be afforded by the Rights.
(p) Common Stock Adjustments. Anything in this Agreement
to the contrary notwithstanding, in the event that the Company at any time
after the Rights Dividend Declaration Date and prior to the Distribution Date
(i) declares a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivides or splits the outstanding shares of
Common Stock, or (iii) combines the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. The
adjustments provided for in this Section 11(p) will be made successively
whenever such a dividend is declared or paid or such subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 (Adjustment
of Purchase Price; Number and Kind of Shares or Number of Rights) and Section
13 (Consolidation, Merger or Sale or Transfer of Assets or Earning Power) the
Company agrees to (a) promptly prepare a certificate specifying the adjustment
and a brief statement of the facts accounting for the adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Common Stock,
a copy of such certificate, and (c) mail or cause the Rights Agent to mail a
brief summary of the adjustment to each holder of a Rights
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<PAGE> 28
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26
(Notices). The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) Flip-over Event. In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the Company consolidates
with, or merges with and into, or enters into a statutory stock exchange or
similar transaction with, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)(Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights -- Restriction
Against Diminishing Benefits of the Rights)), and the Company is not the
continuing or surviving corporation of such consolidation, merger or statutory
share exchange or similar transaction, (y) any Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)) consolidates
with, or merges with or into, or enters into a statutory stock exchange or
similar transaction with, the Company, and the Company is the continuing or
surviving corporation of such consolidation, merger or statutory share exchange
or similar transaction and, in connection with such consolidation, merger or
statutory share exchange or similar transaction, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the
Company sells or otherwise transfers (or one or more of its Subsidiaries sells
or otherwise transfers), in one transaction or a series of related
transactions, assets, cash flow or earning power aggregating more than 50% of
the assets, cash flow or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o)), then, and in each such case (except as may be contemplated
by Section 13(d) (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power -- Exceptions)), (i) proper provision shall be made so that:
each holder of a Right, except as provided in Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Termination of Acquiring Person's
Rights) shall thereafter have the right to receive, upon the exercise of the
Right at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable shares of Common Stock of the Principal
Party (as that term is defined in (b) below), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (A) multiplying the then current Purchase Price
by the number of shares of Common Stock for which a Right is exercisable
immediately prior to the first occurrence of a Flip-over Event (or, if a
Flip-in Event has occurred prior to the first occurrence of a Flip-over Event,
multiplying the number of such shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a Flip-in Event by the
Purchase Price in effect immediately prior to such first occurrence), and (B)
dividing that product (which, following the first occurrence of a Flip-over
Event, shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price per share of
the Common Stock of such Principal Party on the date of consummation of such
Flip-over Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Flip-over Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights) shall apply only to such
Principal Party following the first occurrence of a Flip-over Event; (iv) such
Principal Party
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<PAGE> 29
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) 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 of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) (Adjustment
of Purchase Price; Number and Kind of Shares or Number of Rights -- Certain
Adjustments) hereof shall be of no effect following the first occurrence of any
Flip-over Event.
(b) Principal Party. "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a)
(Consolidation, Merger or Sale or Transfer of Assets or Earning Power
-- Flip-over Event), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in such
consolidation, merger or statutory share exchange or similar
transaction, and if no securities are so issued, the Person that is
the other party to such consolidation, merger or statutory share
exchange or similar transaction, and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) (Consolidation,
Merger or Sale or Transfer of Assets or Earning Power -- Flip-over
Event), the Person that is the party receiving the greatest portion of
the assets, cash flow or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the total outstanding Common Stock having the
greatest aggregate market value.
(c) Supplemental Agreement. The Company shall not
consummate a Flip-over Event unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 (Consolidation, Merger or Sale or Transfer of
Assets or Earning Power) and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms specified in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of such Flip-over Event, 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, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
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<PAGE> 30
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each of
its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 (Consolidation, Merger or Sale or Transfer of
Assets or Earning Power) shall similarly apply to successive consolidation,
mergers or statutory share exchanges or similar transactions or sales or other
transfers. In the event that a Flip-over Event shall occur at any time after
the occurrence of a Flip-in Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning
Power -- Flip-over Event).
(d) Exceptions. Notwithstanding anything in this
Agreement to the contrary, Section 13 (Consolidation, Merger or Sale or
Transfer of Assets or Earning Power) shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) (Consolidation, Merger
or Sale or Transfer of Assets or Earning Power -- Flip-over Event) if (i) such
transaction is consummated with a Person or Persons who acquired shares of
Common Stock pursuant to a tender offer or exchange offer for all outstanding
shares of Common Stock which complies with the provisions of Section
11(a)(ii)(B) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Certain Adjustments) (or a wholly-owned subsidiary of any
such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such tender or exchange offer and (iii) the form of consideration being offered
in such transaction is the same as the form of consideration paid to all
holders of shares of Common Stock whose shares were purchased pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) Fractional Rights. The Company is not required to
issue fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Common Stock Adjustments), or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any Trading Day
shall be the last sale price, regular way, or, in case no such sale takes place
on such Trading Day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices
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<PAGE> 31
in the over-the-counter market as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other system then
in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the Board
shall be used.
(b) Fractional Shares of Common Stock. The Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one (1) share of Common Stock. For purposes of
this Section 14(c), the current market value of one share of Common Stock shall
be the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights -- Current Market Price) for the Trading Day immediately prior
to the date of such exercise.
(c) Waiver of Fractional Rights and Shares. The holder
of a Right by the acceptance of the Right expressly waives his or her right to
receive any fractional Rights or any fractional shares upon exercise of a
Right, except as permitted by this Section 14 (Fractional Rights and Fractional
Shares).
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), may, in his or her own behalf and
for his or her own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, his or her right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office or offices of the Rights Agent
26
<PAGE> 32
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates fully
executed;
(c) subject to Section 6(a) (Transfer, Split Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates -- Procedure) and Section 7(f) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Surrender of Rights Certificates;
Identity of Beneficial Owner), the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of Rights -- Termination of Acquiring Person's
Rights), shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
shares of Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in Section 25
(Notice of Certain Events)), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) Compensation. The Company shall 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
reasonable counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense, incurred without 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
27
<PAGE> 33
the acceptance and administration of this Agreement, including the costs and
expenses of defending against or investigating any claim of liability in the
premises. In no case will the Rights Agent be liable for special, indirect,
incidental or consequential loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has been advised of
the possibility of such damages.
(b) Reliance. The Rights Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted to be taken by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as specified in Section 20 (Duties of Rights Agent).
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Successor. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 (Change of Rights Agent). In case at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) Prior Countersignatures. In case at any time the
name of the Rights Agent shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) Legal Counsel. 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
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authorization and protection to the Rights Agent as to any action taken or
omitted to be taken by it in good faith and in accordance with such opinion.
(b) Certification by the Company. Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of Current Market
Price) be proved or established by the Company prior to taking 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 President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) Liability for Negligence, etc. The Rights Agent
shall be liable hereunder only for its own negligence, bad faith or willful
misconduct.
(d) Statements of Fact or Recitals. The Rights Agent
shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates or be
required to verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) Agreement; Adjustments. The Rights Agent shall not
be under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 (Adjustment of Purchase Price; Number and
Kind of Shares or Number of Rights) or Section 13 (Consolidation, Merger or
Sale or Transfer of Assets or Earning Power) or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice of any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock will, when so issued,
be validly authorized and issued, fully paid and nonassessable.
(f) Further Assurances. The Company will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) Instructions. The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company
and to apply to such persons for advice or instructions in connection with its
duties, and
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it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with the instructions of any such person.
(h) Dealing in Rights. The Rights Agent and any
shareholder, director, officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) Agents; Reasonable Care. 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,
however, reasonable care was exercised in the selection and continued
employment thereof.
(j) Expenses; Repayment Assurances. No provision of this
Agreement shall require the Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) Exercise of Rights; Consultation with Company. If,
with respect to any Rights Certificate surrendered to the Rights Agent for
exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) calendar days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) calendar days' notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of
the Common Stock, by registered or certified mail or by certified overnight
means, and to the holders of the Rights Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30)
calendar days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then the
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
of any State of the United States, in good standing, which is
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authorized under such laws to exercise stock transfer or corporate trust
powers, is subject to supervision or examination by federal or state authority
and has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an Affiliate of a corporation described
in clause (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 Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21 (Change of Rights Agent), or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereafter issued by the
Company, in either case outstanding as of the Distribution Date, and (b) may,
in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material, adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) Redemption. The Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth Business
Day following the Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the Close of Business on the
tenth Business Day following the Record Date), or (ii) the Final Expiration
Date, redeem (the date of such redemption being referred to herein as the
"Redemption Date") all but not less than all of the then outstanding Rights at
a redemption price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that any redemption
after the Stock Acquisition Date must be authorized by a majority of the
Disinterested Directors; provided further, however, that if, following the
occurrence of a Stock Acquisition Date and following the expiration of the
right of redemption hereunder but prior to any Triggering Event, (i) a Person
who is an Acquiring Person shall have transferred or
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otherwise disposed of a number of shares of Common Stock in one transaction or
series of transactions, not directly or indirectly involving the Company or any
of its Subsidiaries, which did not result in the occurrence of a Triggering
Event such that such Person is thereafter a Beneficial Owner of 10% or less of
the outstanding shares of Common Stock, and (ii) there are not other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, then the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23. Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Flip-in Event until such time as
the Company's right of redemption hereunder has expired. The redemption of the
Rights by the Company may be made effective at such time, on such basis and
with such conditions as the Board in its sole discretion or the Disinterested
Directors in their sole discretion, as applicable, may establish. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by Board or
the Disinterested Directors, as applicable.
(b) Effect of Redemption; Procedure. Immediately upon
the action of the Company ordering the redemption of the Rights and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held. Promptly after the
Redemption Date, the Company shall (i) give notice of the redemption to the
Rights Agent, (ii) give public notice of such redemption; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of the redemption, and (iii) mail notice of the redemption to the
holders of the then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent for the Common Stock. Any notice
which is mailed in the manner in this Agreement provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made. Amounts payable shall be rounded down to the nearest $0.01. Any notice
that is mailed in the manner provided in this Agreement will be deemed to be
given whether or not the holder receives the notice. In any case, the failure
to give such notice by mail, or any defect in the notice, to any particular
holder shall not affect the sufficiency of the notice to the other holders of
the Rights and the validity of the proceedings.
Section 24. Exchange.
(a) Right to Exchange. The Company may, at its option,
at any time and from time to time after the first occurrence of a Flip-in
Event, exchange all or part of the then outstanding and exercisable Rights
(other than Rights which have become void as provided in Section 7(e) (Exercise
of Rights; Purchase Price; Expiration Date of Rights -- Termination of
Acquiring Person's Rights)) for the Exchange Number of shares of Common Stock,
shares or units of capital stock or other equity securities (if authorized to
be issued by the Articles of Incorporation) which the Board has determined to
be a Common Stock Equivalent, units of other property or any combination
thereof as determined by the Board. Notwithstanding the foregoing, the Company
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary or any entity holding shares of
Common Stock for or pursuant to any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the shares of Common Stock then
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outstanding. The exchange of the Rights by the Company may be made effective
at such time, on such basis and with such conditions as the Board in its sole
discretion may establish.
(b) Effect of Exchange; Procedure. Immediately upon the
action of the Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24, evidence of which shall have been filed with the Rights
Agent and without any further action and without any notice, the right to
exercise such Rights will terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock,
Common Stock Equivalents or units of other property equal to the number of such
Rights held by such holder multiplied by the Exchange Number. Promptly after
the action of the Company ordering the exchange of the Rights, the Company
shall (i) file evidence of such action with the Rights Agent, (ii) give public
notice of such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange, and
(iii) mail notice of such exchange to 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 will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void as provided in Section 7(e) (Exercise
of Rights; Purchase Price; Expiration Date of Rights -- Termination of
Acquiring Person's Rights)) held by each holder of Rights.
(c) Common Stock Equivalents. In any exchange pursuant
to this Section 24, the Company, at its option, may substitute Common Stock
Equivalents for Common Stock exchangeable for Rights, at the initial rate of
one share of Common Stock Equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of the
Common Stock pursuant to the Company's Articles of Incorporation, so that the
share of Common Stock Equivalent delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.
(d) Insufficient Common Stock. In the event that the
number of shares of Common Stock which are authorized by the Company's Articles
of Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit any exchange
of Rights in accordance with this Section 24, or other equity securities are
not authorized by the Articles of Incorporation, the Company may, at its
option, take all such action as may be necessary to authorize additional shares
of Common Stock or other equity securities for issuance upon such exchange.
(e) Fractional Shares. Upon the action of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24, the Company shall not be required to issue fractions of shares or to
distribute certificates which evidence fractional shares. In lieu of such
fractional shares, the Company may pay to the registered holders of the Rights
Certificates with regard to which such fractional shares would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of one share of Common Stock. For purposes of this Section 24, the
current market value of one share of Common Stock shall be the closing price of
one share of Common Stock (as determined pursuant to Section 11(d)(i)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights --
Current Market Price)) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24, and the value of any Common
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Stock Equivalent shall be deemed to have the same current market value as the
Common Stock on such date.
Section 25. Notice of Certain Events.
(a) Common Stock Transactions, etc. In case the Company
shall propose, at any time after the Distribution Date, (i) to declare or pay
any dividend on the shares of Common Stock payable in Common Stock or to effect
a subdivision, combination or consolidation of the shares of Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock);
(ii) to offer to the holders of Common Stock rights or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock of
any class or any other securities, rights or options; (iii) to effect any
consolidation with, merger into or with, or statutory share exchange or similar
transaction with, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights -- Restriction against
Diminishing Benefits of the Rights)), 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 transaction or a series of related transactions, of more than
50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)); or (iv) to effect the liquidation,
dissolution or winding up of the Company, or then, in each such case, the
Company shall give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26 (Notices), a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, statutory share exchange or similar
transaction, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the shares of
Common Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least
twenty (20) calendar days prior to the record date for determining holders of
the shares of Common Stock for purposes of such action, and in the case of any
such other action, at least twenty (20) calendar days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock, whichever shall be the earlier.
(b) Other Transactions. In case any of the events
specified in Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind
of Shares or Number of Rights -- Certain Adjustments) shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 (Notices), a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 11(a)(ii), and (ii) all references in the preceding paragraph to Common
Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by telecopier (with receipt confirmed) or by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
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Cash America International, Inc.
1600 West 7th Street, 9th Floor
Fort Worth, Texas 76102
Attention: Hugh Simpson
Telecopier: (817) 335-1119
Subject to the provisions of Section 21 (Change of Rights Agent), any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by telecopier (with receipt confirmed) or by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
2323 Bryan Street, Suite 2300
Dallas, Texas 75201
Attention: Margaret Grubb
Telecopier: (214) 965-2233
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) 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.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company 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
certificates representing shares of Common Stock; provided, however, that any
supplement or amendment of this Agreement after the Stock Acquisition Date must
be approved by a majority of the Disinterested Directors. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company 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 (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder
or (iv) to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of any such Person). This
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of the immediately preceding sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable,
or (B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Any supplement or amendment of this Agreement after the
Stock Acquisition Date must be approved by a majority of the Disinterested
Directors. 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 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final
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Expiration Date, the Purchase Price, or the number of shares of Common Stock
for which a right is exercisable; provided, however, that at any time prior to
(i) the existence of an Acquiring Person or (ii) the date that a tender or
exchange offer by any person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, the Board may amend this Agreement to increase the Purchase Price
or extend the Final Expiration Date. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors,
Disinterested Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board (with, where specifically provided for herein, the concurrence
or approval of the Disinterested Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically provided for
herein, the concurrence or approval of the Disinterested Directors) or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (with, where specifically provided for
herein, the concurrence or approval of the Disinterested Directors) in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject the
Board or the Disinterested Directors to any liability to the holders of the
Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that
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notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption
specified in Section 23 (Redemption and Termination) shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day
following the date of such determination by the Board. Without limiting the
foregoing, if any provision requiring a majority of the Board to be
Disinterested Directors to act is held by any court of competent jurisdiction
or other authority to be invalid, void or unenforceable, such determination
shall then be made by the Board in accordance with applicable law and the
Company's Articles of Incorporation and By-Laws.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Texas and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
* * * * *
37
<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CASH AMERICA INTERNATIONAL, INC.
By: /s/ HUGH A. SIMPSON
--------------------------------------
Hugh A. Simpson
Senior Vice President,
General Counsel and Secretary
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ MARGARET W. GRUBB
--------------------------------------
Margaret W. Grubb
Assistant Vice President
38
<PAGE> 44
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. R____ ______ Rights
NOT EXERCISABLE AFTER THE EARLIER OF AUGUST 5, 2007, OR SUCH DATE AS THE RIGHTS
REPRESENTED HEREBY ARE REDEEMED BY CASH AMERICA INTERNATIONAL, INC. (THE
"CORPORATION"). THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT DATED AS OF AUGUST 5, 1997, BY AND
BETWEEN THE CORPORATION AND CHASEMELLON SHAREHOLDER SERVICES, L.L.C. AS RIGHTS
AGENT (THE "RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) (EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS --
TERMINATION OF ACQUIRING PERSON'S RIGHTS) OF SUCH AGREEMENT.](1)
RIGHTS CERTIFICATE
CASH AMERICA INTERNATIONAL, INC.
This certifies that
_______________________________________________________, or its, his or her
registered assigns, is the registered owner of the number of rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of August 5, 1997
(the "Rights Agreement"), between Cash America International, Inc., a Texas
corporation (the "Corporation"), and ChaseMellon Shareholder Services, L.L.C.
(the "Rights Agent"), to
- ------------------------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
<PAGE> 45
purchase from the Corporation at any time prior to 5:00 P.M. (Fort Worth, Texas
time) on August 5, 2007 at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one fully paid,
nonassessable share of Common Stock (the "Common Stock") of the Corporation, at
a purchase price of $37.00 per share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of August 5, 1997, based on the Common Stock
as constituted at such date. The Corporation reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Common Stock would be issued.
Upon the occurrence of a Flip-in Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate or
any such Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of an Acquiring Person or its Associate or Affiliate who becomes a
transferee after such Acquiring Person or its Associate or Affiliate becomes
such, or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of an Acquiring Person or its Associate or Affiliate who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such,
such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Flip-in
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Common Stock or other securities, which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
A-2
<PAGE> 46
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one share of Common Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights for which this Rights Certificate is not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Corporation at its
option at a redemption price of $0.01 per Right at any time prior to the
earlier of (a) the Close of Business (as such term is defined in the Rights
Agreement) on the tenth (10th) Business Day (as such term is defined in the
Rights Agreement) following the Stock Acquisition Date (as such term is defined
in the Rights Agreement) (as such time period may be extended pursuant to the
Rights Agreement) or (b) the Final Expiration Date (as such term is defined in
the Rights Agreement) and (ii) may be exchanged in whole or in part for Common
Stock, shares of the Corporation's Common Stock, par value $0.10 per share,
other property or any combination thereof.
In addition, the Rights may be exchanged, in whole or in part, for
shares of the Common Stock, or shares of common stock equivalents of the
Corporation having essentially the same value or economic rights as such
shares. Immediately upon the action of the Board of Directors of the
Corporation authorizing any such exchange, and without any further action or
any notice, the Rights (other than Rights which are not subject to such
exchange) will terminate and the Rights will only enable holders to receive the
shares issuable upon such exchange.
No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but a cash payment will be made in
lieu thereof, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or of any other securities of the Corporation which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders of the
Corporation 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 of the Corporation (except as provided in the Rights Agreement),
or to
A-3
<PAGE> 47
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal.
Dated as of
----------------------
ATTEST: CASH AMERICA INTERNATIONAL, INC.
By:
- ---------------------------------- --------------------------------
Secretary Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:
-------------------------
Authorized Signature
A-4
<PAGE> 48
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED,___________________________________________
hereby sells, assigns and transfers to _________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT NAME AND ADDRESS OF TRANSFEREE)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
attorney, to transfer the within Rights Certificate on the books of the
within-named Corporation, with full power of substitution. The undersigned
acknowledges that this Assignment is voidable by the Corporation if it contains
any material misstatements of fact by the transferor.
Dated:
---------------------------- ----------------------------------------
Signature
*Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are defined
in 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 Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated:
---------------------------- ----------------------------------------
Signature
* Signature Guaranteed:
* Participant is a recognized Signature Medallion Program.
A-5
<PAGE> 49
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: CASH AMERICA INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Corporation or of any other person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the
name of and delivered to:
Please insert social security or
other identifying number
- --------------------------------------------------------------------------------
(PLEASE PRINT NAME AND ADDRESS)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or
other identifying number
- --------------------------------------------------------------------------------
(PLEASE PRINT NAME AND ADDRESS)
- --------------------------------------------------------------------------------
Dated:
---------------------------- ----------------------------------------
Signature
*Signature Guaranteed:
A-6
<PAGE> 50
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being acquired or exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in 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 Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:
---------------------------- ----------------------------------------
Signature
*Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
A-7
<PAGE> 51
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On August 5, 1997, the Board of Directors of Cash America
International, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of the Company's common stock, $0.10 par value
(the "Common Stock"), to shareholders of record at the close of business on
August 19, 1997. Each Right entitles the registered holder to initially
purchase from the Company one share of Common Stock at a Purchase Price of
$37.00 per share, subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock upon the earlier of (i) ten (10) business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of fifteen percent (15%) or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date"), or (ii) ten (10) business days (or such
later date as the Board of Directors shall determine) following the
commencement of a tender or exchange offer that would result in a person or
group beneficially owning fifteen percent (15%) or more of such outstanding
shares of Common Stock. The date the Rights separate is referred to as the
"Distribution Date."
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
August 19, 1997, will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates. Pursuant to the Rights
Agreement, the Company is not required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. Further, pursuant to the Rights Agreement,
the Company reserves the right to require prior to the occurrence of a
Triggering Event (defined below) that upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Common Stock would be issued.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on August 5, 2007, unless earlier redeemed by
the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates will represent the Rights. Except in connection with shares of
Common Stock issued or sold pursuant to the exercise of stock options under any
employee plan or arrangements, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, or as otherwise determined by the
Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
B-1
<PAGE> 52
In the event that (i) the Company is the surviving corporation in a
merger or other business combination with an Acquiring Person (or any associate
or affiliate thereof) and its Common Stock remains outstanding and unchanged,
(ii) any person shall acquire beneficial ownership of more than fifteen percent
(15%) of the outstanding shares of Common Stock (except pursuant to (A) certain
consolidations or mergers involving the Company or sales or transfers of the
combined assets, cash flow or earning power of the Company and its subsidiaries
or (B) an offer for all outstanding shares of Common Stock at a price and upon
terms and conditions which a majority of the Disinterested Directors (as
defined below) determines to be in the best interests of the Company and its
shareholders), or (iii) there occurs a reclassification of securities, a
recapitalization of the Company or any of certain business combinations or
other transactions (other than certain consolidations and mergers involving the
Company and sales or transfers of the combined assets, cash flow or earning
power of the Company and its subsidiaries) involving the Company or any of its
subsidiaries which has the effect of increasing by more than one percent (1%)
the proportionate share of any class of the outstanding equity securities of
the Company or any of its subsidiaries beneficially owned by an Acquiring
Person (or any associate or affiliate thereof), each holder of a Right (other
than the Acquiring Person and certain related parties) will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the Purchase Price of the Right. However, Rights are not exercisable
following the occurrence of either of the events described above until such
time as the Rights are no longer redeemable by the Company as described below.
Notwithstanding any of the foregoing, following the occurrence of any of the
events described in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
For example, if the purchase price for the Common Stock associated
with a Right is $37.00, then the holder of a Right would be entitled to
purchase $74.00 worth of Common Stock for $37.00. If the Common Stock had a
market value of $18.50 per share at that time, then the holder of each Right
would be entitled to purchase four shares of Common Stock for $37.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company shall enter into a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is the surviving corporation in a consolidation, merger or similar
transaction pursuant to which all or part of the outstanding shares of Common
Stock are changed into or exchanged for stock or other securities of any other
person or cash or any other property or (iii) more than 50% of the combined
assets, cash flow or earning power of the Company and its subsidiaries is sold
or transferred (in each case other than certain consolidations with, mergers
with and into, or sales of assets, cash flow or earning power by or to
subsidiaries of the Company as specified in the Rights Agreement), each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right. The events described in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the
B-2
<PAGE> 53
Common Stock, (ii) if holders of the Common Stock are granted certain rights,
options or warrants to subscribe for Common Stock or securities convertible
into Common Stock at less than the current market price of the Common Stock, or
(iii) upon the distribution to holders of the Common Stock of evidences of
indebtedness, cash (excluding regular quarterly cash dividends), assets (other
than dividends payable in Common Stock) or subscription rights or warrants
(other than those referred to in (ii) immediately above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least one percent (1%) of
the Purchase Price. No fractional shares of Common Stock are required to be
issued) and, in lieu thereof, the Company may make an adjustment in cash based
on the market price of the Common Stock on the trading date immediately prior
to the date of exercise.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of fifty percent (50%) or more
of the outstanding shares of Common Stock, the Board of Directors of the
Company may, without payment of the Purchase Price by the holder, exchange the
Rights (other than Rights owned by such person or group, which will become
void), in whole or in part, for shares of Common Stock at an exchange ratio of
one-half (1/2) the number of shares of Common Stock for which a Right is
exercisable immediately prior to the time of the Company's decision to
exchange the Rights (subject to adjustment).
At any time until ten (10) business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (payable in cash, shares of Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
The term "Disinterested Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Disinterested
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of an acquiring company as set forth above or in
the event that the Rights are redeemed.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date; provided,
that any amendments after the Stock Acquisition Date must be approved by a
majority of the Disinterested Directors. After the
B-3
<PAGE> 54
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, inconsistency or defect, to make changes
which do not adversely affect the interest of holders of Rights (excluding the
interest of any Acquiring Person) or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable; and, provided, that any amendments after the Stock Acquisition
Date must be approved by a majority of the Disinterested Directors.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Current Report on Form 8-K
dated on August 5, 1997. A copy of the Rights Agreement is available free of
charge from the Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
B-4
<PAGE> 1
EXHIBIT 99
CONTACT: Daniel R. Feehan
Thomas A. Bessant, Jr. FOR IMMEDIATE RELEASE
(817) 335-1100
- --------------------------------------------------------------------------------
CASH AMERICA ANNOUNCES ITS BOARD'S ADOPTION OF A
SHAREHOLDER RIGHTS PLAN
- --------------------------------------------------------------------------------
(Fort Worth, Texas - August 5, 1997) Cash America International, Inc. (NYSE:
PWN) announced that, at a special meeting held today, its Board of Directors
adopted a Shareholder Rights Plan in which common stock purchase rights will be
distributed as a dividend at the rate of one Right for each share of common
stock, par value $0.10 per share, of the Company, held by shareholders of
record as of the close of business on August 19, 1997.
The Rights are designed to provide additional protection against abusive
takeover tactics such as partial tender offers and offers for all of the shares
of the Company at less than full value or at an inappropriate time. The Rights
are intended to assure that the Board of Directors has the ability to protect
shareholders and the Company if efforts are made to gain control of the Company
in a manner that is not in the best interests of the Company and all of its
shareholders,
The Rights will be exercisable only if a person or group acquires 15% or more
of the Company's common stock or announces a tender offer, the consummation of
which would result in ownership by a person or group of 15% of the common
stock. If any person becomes a 15% or more shareholder of the Company, each
Right (subject to certain limits) will entitle its holder (if not the acquiring
party) to purchase for $37.00 shares of the Company's common stock having a
market value equal to twice that amount. The Rights will expire on August 5,
2007. Distribution of the Rights is not taxable to shareholders. Details of the
Rights distribution are contained in a letter that will be mailed to all
Company shareholders.
Jack Daugherty, Chairman and Chief Executive Officer, said, "The Rights are
designed to permit shareholders to benefit from the long-term value of the
Company and to aid in assuring that all shareholders receive fair and equal
treatment in the event of a proposed takeover of the Company."
The Shareholder Rights Plan is not being adopted at this time in response to
any specific effort to acquire control of Company, and the Board of Directors
is not aware of any such effort. The issuance of the Rights does not in any way
diminish the financial strength of the Company or affect its business plans.
Also, the issuance of the Rights has no dilutive effect, will not impact
reported earnings per share, and will not change tile way the Company's common
stock is traded.
Cash America International, Inc, is a diversified provider of specialty
financial services to individuals in the United States, Great Britain and
Sweden. As of June 30, 1997, Cash America operates 395 locations offering
secured non-recourse loans to individuals, commonly referred to as pawn loans.
In addition, the Company provides check cashing services through its
wholly-owned subsidiary, Mr. Payroll Corporation and rental purchase services
through its ownership interest in Express Rent A Tire, Ltd.
***
