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): March 17, 1999
BODDIE-NOELL PROPERTIES, INC.
(Exact name of registrant specified in its charter)
Maryland 1-9496 56-1574675
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
3850 One First Union Center, Charlotte, North Carolina 28202
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (704) 944-0100
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Item 5. Other Events.
Adoption of Rights Plan
On March 17, 1999, the Board of Directors of Boddie-Noell Properties,
Inc. (the "Company") authorized a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend is payable on March 29, 1999
(the "Record Date") to the shareholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company at a price of $36.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and First Union National
Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be represented, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate. Any person
or group owning in excess of 15% of the outstanding Common Shares as of March
29, 1999, shall only trigger the effects referred to above if such person
increases its ownership of Common Shares to in excess of the percentage of
outstanding Common Shares on such date plus 1%. Persons or groups beneficially
owning on March 29, 1999 in excess of 15% of the Common Shares outstanding on
March 29, 1999 shall not trigger any of the foregoing events unless such persons
or group acquire additional Common Shares such that the number of Common Shares
beneficially owned by such persons or groups exceeds the percentage of Common
Shares held by such persons or groups on March 29, 1999 plus 1%.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates representing Common Shares
outstanding as of the Record Date, even without such notation, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates representing the Rights ("Right
Certificates") will be mailed to holders of record of the
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Common Shares as of the close of business on the Distribution Date and such
separate Right Certificates alone will represent the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 29, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend authorized per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then-current exercise price
of the Right, that number of shares of common stock of the acquiring company
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which at the time of such transaction will have a market value of two times the
exercise price of the Right. In the event that any person or group of affiliated
or associated persons becomes an Acquiring Person, proper provision shall be
made so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a market value of
two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may cause the
Company to exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange ratio of one
Common Share, or one one-hundredth of a Preferred Share (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions that are integral multiples of one one-hundredth of a Preferred Share,
which may, at the election of the Company, be represented by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may cause the Company to
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time on such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person or group of
affiliated or associated persons (other than persons owning in excess of 15% of
the outstanding Common Shares on March 29, 1999) and (ii) 10%, except that from
and after such time as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely affect the interests
of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
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The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors since the Rights may be redeemed by the Company at the Redemption
Price prior to the time that a person or group has acquired beneficial ownership
of 15% or more of the Common Shares.
The Rights Agreement and the press release announcing the declaration
of the Rights are attached hereto as exhibits and are incorporated herein by
reference. The foregoing description of the Rights is qualified in its entirety
by reference to such exhibits.
Bylaw Amendments
On March 17, 1999, the Board of Directors amended the bylaws in order
to make it more difficult for an entity to acquire the Company without first
negotiating with the Board. The amendment provides that, effective at the 1999
annual meeting, the board of directors will be classified into three groups. The
first group will hold office for a term expiring at the 2000 annual meeting, the
second will hold office until the 2001 annual meeting and the third will hold
office until the 2002 annual meeting. At each annual meeting starting with that
held in 2000, directors will be elected for a three-year term.
The amendment also provides that a special meeting may only be called
by the shareholders upon the written request of holders representing a majority
of the shares of capital stock entitled to vote thereat. (Prior to the
amendment, the bylaws required the support of only 25% of the shareholders.) The
amended bylaws also set forth the procedures to be followed by shareholders
seeking to call a special meeting.
Finally, pursuant to the bylaw amendment, the Company opted out of the
Maryland Control Share Acquisition Statute pursuant to Section 3-702(b) of the
Maryland General Corporation Law. A copy of the amended and restated bylaws is
filed as an exhibit to this report.
Item 7. Exhibits.
3(i) Articles of Incorporation, as amended by Articles Supplementary
for Series A Junior Participating Preferred Stock
3(ii) Bylaws, as amended
4 Rights Agreement, dated as of March 18, 1999, between
Boddie-Noell Properties, Inc. and First Union National Bank,
including the form of Articles Supplementary for Series A
Junior Participating Preferred Stock as Exhibit A, form of
Right Certificate as Exhibit B and the Summary of Rights to
Purchase Preferred Shares as Exhibit C
99 Press release dated March 18, 1999
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 22, 1999
BODDIE-NOELL PROPERTIES, INC.
By: /s/ Philip S. Payne
-------------------------------
Philip S. Payne
Executive Vice President and
Chief Financial Officer
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AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BODDIE-NOELL PROPERTIES, INC.
ARTICLE I
INCORPORATOR
THE UNDERSIGNED, Jeffrey D. Miller, whose mailing address is
2800 Two Hannover Square, Raleigh, North Carolina 27601, being at least eighteen
years of age, acting as incorporator, does hereby form a corporation under the
General Laws of the State of Maryland.
ARTICLE II
NAME
The name of the corporation (the "Corporation") is
Boddie-Noell Properties, Inc.
ARTICLE III
PRINCIPAL OFFICE, REGISTERED OFFICE AND AGENT
The address of the Corporation's principal office is 3710 One
First Union Center, Charlotte, North Carolina 28202. The address of the
Corporation's principal office and registered office in the State of Maryland is
32 South Street, Baltimore, Maryland 21202. The name of its registered agent at
that office is The Corporation Trust, Incorporated.
ARTICLE IV
PURPOSES
The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the Maryland
Corporations and Associations Article as now or hereafter in force.
ARTICLE V
CAPITAL STOCK
5.1. Shares and Par Value. The total number of shares of stock of all
classes which the Corporation has authority to issue is 110,000,000 shares of
capital stock (par value $.01 per share), amounting in aggregate par value to
$1,100,000, of which 10,000,000 shares are classified as Preferred Stock (par
value $.01 per share) and 100,000,000 shares are classified as Common Stock (par
value $.01 per share).
5.2. Common Stock. The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Common
Stock of the Corporation (See also Article Sixth hereof):
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(a) Except as otherwise provided in these Articles of
Incorporation, each share of Common Stock shall have one vote, and, except as
otherwise provided in respect of any class or series of Preferred Stock
hereafter classified or reclassified, the exclusive voting power for all
purposes shall be vested in the holders of the Common Stock.
(b) Subject to the provisions of law and any preferences of
any class or series of Preferred Stock hereafter classified or reclassified,
dividends, including dividends payable in shares of another class of the
Corporation's stock, may be paid on the Common Stock of the Corporation at such
time and in such amounts as the Board of Directors may deem advisable out of
assets of the Corporation legally available therefor.
(c) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of the Common
Stock then outstanding shall be entitled, after payment or provision for payment
of the debts and other liabilities of the Corporation and the amount to which
the holders of any class or series of Preferred Stock hereafter classified or
reclassified shall be entitled, to share ratably in the remaining net assets of
the Corporation.
5.3. Preferred Stock. The Board of Directors may classify and
reclassify any unissued shares of Preferred Stock by setting or changing in any
one or more respects, from time to time before issuance of such shares, the
preferences, conversion or other rights, voting powers, restrictions (including
restrictions on transfers of shares), limitations as to dividends,
qualifications or terms or conditions of redemption of such shares of Preferred
Stock. Subject to the foregoing, the power of the Board of Directors to classify
and reclassify any of the shares of Preferred Stock shall include, without
limitation, subject to the provisions of these Articles of Incorporation,
authority to determine, fix, or alter one or more of the following:
(a) The distinctive designation of such class or series and
the number of shares to constitute such class or series; provided that, unless
otherwise prohibited by the terms of such or any other class or series, the
number of shares of any class or series may be decreased by the Board of
Directors in connection with any classification or reclassification of unissued
shares and the number of shares of such class or series may be increased by the
Board of Directors in connection with any such classification or
reclassification, and any shares of any class or series which have been
redeemed, purchased, otherwise acquired or converted into shares of Common Stock
or any other class or series shall become part of the authorized capital stock
and be subject to classification and reclassification as provided in this
sub-paragraph.
(b) Whether or not and, if so, the rates, amounts and times at
which, and the conditions under which, dividends shall be payable on shares of
such class or series, whether any such dividends shall rank senior or junior to
or on a parity with the dividends payable on any other class or series of stock,
and the status of any such dividends as cumulative, cumulative to a limited
extent or non-cumulative and as participating or non-participating.
(c) Whether or not shares of such class or series shall have
voting rights, in addition to any voting rights provided by law and, if so, the
terms of such voting rights.
(d) Whether or not shares of such class or series shall have
conversion or exchange privileges and, if so, the terms and conditions thereof,
including provision for adjustment of the conversion or exchange rate in such
events or at such times as the Board of Directors shall determine.
(e) Whether or not shares of such class or series shall be
subject to redemption and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be redeemable and the
amount per share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates; and whether or not there
shall be any sinking fund or purchase account in respect thereof, and if so, the
terms thereof.
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(f) The rights of the holders of shares of such class or
series upon the liquidation, dissolution or winding up of the affairs of, or
upon any distribution of the assets of, the Corporation, which rights may vary
depending upon whether such liquidation, dissolution or winding up is voluntary
or involuntary and, if voluntary, may vary at different dates, and whether such
rights shall rank senior or junior to or on a parity with such rights of any
other class or series of stock.
(g) Whether or not there shall be any limitations applicable,
while shares of such class or series are outstanding, upon the payment of
dividends or making of distributions on, or the acquisition of, or the use of
moneys for purchase or redemption of, any stock of the Corporation, or upon any
other action of the Corporation, including action under this sub-paragraph, and,
if so, the terms and conditions thereof.
(h) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of such class or
series, not inconsistent with law and these Articles of Incorporation.
5.4. Preemptive Rights. No holder of shares of capital stock of the
Corporation shall, as such holder, have any preemptive or other right to
purchase or subscribe for any shares of Common Stock or any class of capital
stock of the Corporation that the Corporation may issue or sell.
ARTICLE VI
REIT PROVISIONS
6.1. Definitions. The following terms shall have the following
meanings:
(a) "Acquire" shall mean the acquisition of Beneficial
Ownership of shares of capital stock of the Corporation by any means including,
without limitation, acquisition pursuant to the exercise of any option, warrant,
pledge or other security interest or similar right to acquire shares, but shall
not include the acquisition of any such rights unless, as a result, the acquiror
would be considered a Beneficial Owner, as defined below.
(b) "Beneficial Ownership" shall mean ownership of capital
stock of the Corporation by a Person who would be treated as an owner of such
shares of capital stock either directly or indirectly under Section 542(a)(2) of
the Code, taking into account, for this purpose, constructive ownership
determined under Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code (except where expressly provided otherwise). The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have correlative
meanings.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Merger" shall mean the merger of Boddie-Noell Properties,
Inc., a Delaware corporation, into the Corporation.
(e) "Ownership Limit" shall mean 9.8% of the outstanding
capital stock of the Corporation.
(f) "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that term
is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended; but does not include an underwriter that participates in
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a public offering of the Common Stock for a period of 90 days following the
purchase by such underwriter of the Common Stock.
(g) "REIT" shall mean a Real Estate Investment Trust under
Section 856 of the Code.
(h) "Redemption Price" shall mean the lower of (i) the price
paid by the transferee from whom shares are being redeemed and (ii) the average
of the last reported sales prices on the American Stock Exchange of the class of
capital stock to be redeemed on the ten trading days immediately preceding the
date fixed for redemption by the Board of Directors, or if such capital stock is
not then traded on the American Stock Exchange, the average of the last reported
sales prices of such capital stock on the ten trading days immediately preceding
the relevant date as reported on any exchange or quotation system over which
such capital stock may be traded, or if such capital stock is not then traded
over any exchange or quotation system, then the price determined in good faith
by the Board of Directors of the Corporation as the fair market value of shares
of such capital stock on the relevant date.
(i) "Restriction Termination Date" shall mean the first day
after the date of the Merger on which the Board of Directors and the
shareholders of the Corporation determine pursuant to Section 6.10 of these
Articles of Incorporation that it is no longer in the best interests of the
Corporation to attempt to, or continue to, qualify as a REIT.
(j) "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of capital stock or the right to vote or
receive dividends on capital stock (including (i) the granting of any option or
entering into any agreement for the sale, transfer or other disposition of
capital stock or the right to vote or receive dividends on capital stock or (ii)
the sale, transfer, assignment or other disposition or grant of any securities
or rights convertible into or exchangeable for capital stock, or the right to
vote or receive dividends on capital stock), whether voluntary or involuntary,
whether of record or beneficially and whether by operation of law or otherwise.
6.2. Restrictions.
(a) Except as provided in Section 6.8, during the period
commencing on the date of the Merger and prior to the Restriction Termination
Date: (i) no Person shall Acquire any shares of capital stock if, as a result of
such acquisition, such Person shall Beneficially Own shares of capital stock in
excess of the Ownership Limit; (ii) no Person shall Acquire any shares of
capital stock if, as a result of such acquisition, the capital stock would be
directly or indirectly owned by less than 100 Persons (determined without
reference to the rules of attribution under Section 544 of the Code); and (iii)
no Person shall Acquire any shares if, as a result of such acquisition, the
Corporation would be "closely held" within the meaning of Section 856(h) of the
Code.
(b) Any Transfer that would result in a violation of the
restrictions in Section 6.2(a) shall be void ab initio as to the Transfer of
such shares of capital stock that would cause the violation of the applicable
restriction in Section 6.2(a), and the intended transferee shall acquire no
rights in such shares of capital stock.
6.3. Remedies for Breach.
(a) If the Board of Directors or a committee thereof shall at
any time determine in good faith that a Transfer has taken place that falls
within the scope of Section 6.2(b) or that a Person intends to Acquire
Beneficial Ownership of any shares of the Corporation that will result in
violation of Section 6.2(a) or Section 6.2(b) (whether or not such violation is
intended), the Board of Directors or a committee thereof shall take such action
as it or they deem advisable to refuse to give effect to or to prevent such
Transfer, including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer.
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(b) Without limitation to Section 6.2(b) and 6.3(a), any
purported transferee of shares acquired in violation of Section 6.2 shall, if it
shall be deemed to have received any shares, be deemed to have acted as agent on
behalf of the Corporation in acquiring such of the shares as result in a
violation of Section 6.2 and shall be deemed to hold such shares in trust on
behalf and for the benefit of the Corporation. The transferee shall have no
right to receive dividends or other distributions with respect to such shares,
and shall have no right to vote such shares. Such transferee shall have no
claim, cause of action, or any other recourse whatsoever against a transferor of
shares acquired in violation of Section 6.2. The transferee's sole right with
respect to such shares shall be to receive at the Corporation's sole and
absolute discretion, either (i) consideration for such shares upon the resale of
the shares as directed by the Corporation pursuant to Section 6.3(c) or (ii) the
Redemption Price pursuant to Section 6.3(c).
(c) The Board of Directors shall, within six months after
receiving notice of a Transfer that violates Section 6.2(a), either (in its sole
and absolute discretion) (i) direct the transferee of such shares to sell all
shares held in trust for the Corporation pursuant to Section 6.3(b) for cash in
such manner as the Board of Directors directs or (ii) to the extent permissible
under Maryland law, redeem such shares for the Redemption Price within such
six-month period on such date as the Board of Directors may determine. If the
Board of Directors directs the transferee to sell the shares, the transferee
shall receive such proceeds as trustee for the Corporation and pay the
Corporation out of the proceeds of such sale all expenses incurred by the
Corporation in connection with such sale plus any remaining amount of such
proceeds that exceeds the amount paid by the transferee for the shares, and the
transferee shall be entitled to retain only any proceeds in excess of such
amounts required to be paid to the Corporation.
6.4. Notice of Restricted Transfer. Any Person who acquires or attempts
or intends to acquire shares in violation of Section 6.2 shall immediately give
written notice to the Corporation of such event and shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted or intended Transfer
on the Corporation's status as a REIT.
6.5. Owners Required to Provide Information. From the date of the
Merger and prior to the Restriction Termination Date:
(a) every shareholder of record of more than 5% (or such lower
percentage as required by the Code or regulations promulgated thereunder) of the
outstanding capital stock of the Corporation shall, within 30 days after
December 31 of each year, give written notice to the Corporation stating the
name and address of such record shareholder, the number of shares Beneficially
Owned by it, and a description of how such shares are held; provided that a
shareholder of record who holds outstanding capital stock of the Corporation as
nominee for another person, which other person is required to include in gross
income the dividends received on such capital stock (an "Actual Owner"), shall
give written notice to the Corporation stating the name and address of such
Actual Owner and the number of shares of such Actual Owner with respect to which
the shareholder of record is nominee.
(b) every Actual Owner of more than 5% (or such lower
percentage as required by the Code or regulations promulgated thereunder) of the
outstanding capital stock of the Corporation who is not a shareholder of record
of the Corporation, shall within 30 days after December 31 of each year, give
written notice to the Corporation stating the name and address of such Actual
Owner, the number of shares Beneficially Owned, and a description of how such
shares are held.
(c) each Person who is a Beneficial Owner of capital stock and
each Person (including a shareholder of record) who is holding capital stock for
a Beneficial Owner shall provide to the Corporation such information as the
Corporation may request, in good faith, in order to determine the Corporation's
status as a REIT.
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6.6. Remedies Not Limited. Subject to Section 6.12 of this Article VI,
nothing contained in this Article VI shall limit the authority of the Board of
Directors to take such other action as it deems necessary or advisable to
protect the Corporation and the interests of its shareholders in preserving the
Corporation's status as a REIT.
6.7. Ambiguity. In the case of an ambiguity in the application of any
of the provisions of this Article VI, including any definition contained in
Section 6.1, the Board of Directors shall have the power to determine the
application of the provisions of this Article VI with respect to any situation
based on the facts known to it.
6.8. Exception. The Board of Directors may, upon receipt of either a
certified copy of a ruling from the Internal Revenue Service or an opinion of
counsel satisfactory to the Board of Directors, but shall in no case be required
to, exempt a Person (the "Exempted Holder") from the Ownership Limit if the
ruling or opinion concludes that no Person who is an individual as defined in
Section 542(a)(2) of the Code will, as the result of the ownership of shares by
the Exempted Holder, be considered to have Beneficial Ownership of an amount of
capital stock that will violate the Ownership Limit.
6.9. Legend. Each certificate for capital stock of the Corporation
shall bear a legend referring to the restrictions set forth in this Article VI.
6.10. Termination of REIT Status. The Corporation shall take no action
to terminate the Corporation's status as a REIT or to amend the provisions of
this Article VI until such time as (i) the Board of Directors adopts a
resolution recommending that the Corporation terminate its status as a REIT or
amend this Article VI, as the case may be, (ii) the Board of Directors presents
the resolution at an annual or special meeting of the shareholders and (iii)
such resolution is approved by holders of two-thirds of the issued and
outstanding shares of the capital stock entitled to vote thereon voting together
as a single class.
6.11. Severability. If any provision of this Article VI or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
6.12. AMEX Settlement. Nothing in this Article VI shall preclude
settlement of any transaction entered into through the facilities of the
American Stock Exchange.
ARTICLE VII
BOARD OF DIRECTORS
7.1. Function. The business and affairs of the Corporation shall be
managed by, or under the direction of, its Board of Directors. The Board of
Directors shall consist at all times of a majority of Independent Directors,
provided that upon a failure to comply with this requirement because of the
resignation, removal or death of an Independent Director, such requirement shall
not be applicable for a period of 60 days or such longer period as may
reasonably be needed to fill the vacancy with an Independent Director. An
"Independent Director" shall be a director who is not (i) an employee or officer
of the Corporation or a subsidiary or division thereof, (ii) a spouse, parent or
child of, or a relative living in the same household as, a principal executive
officer of the Corporation, or (iii) an individual member of an organization
acting as an advisor, consultant, legal counsel or acting in a similar capacity
that receives compensation on a continuing basis from the Corporation in
addition to director's fees.
7.2. Number. The number of directors that will constitute the
entire Board of Directors shall be fixed by, or in the manner provided in, the
Bylaws but shall in no event be less than three nor more than fifteen. The
current number of directors is five, and the names of the directors who will
serve until
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the next annual meeting and until their successors are elected and qualify are:
B. Mayo Boddie, Nicholas B. Boddie, Donald R. Pesta, Jr., William H. Stanley and
Richard A. Urquhart, Jr.
7.3. Vacancies. The shareholders may elect a successor to fill a
vacancy on the Board of Directors that results from the removal of a director.
Newly created directorships resulting from any increase in the number of
directors may be filled by a majority of the Board of Directors, or as otherwise
provided in the Bylaws, and any vacancies on the Board of Directors resulting
from any cause other than an increase in the number of directors may be filled
by the affirmative vote of a majority of the remaining directors then in office,
even though less than a quorum of the Board of Directors, or by a sole remaining
director, or as otherwise provided in the Bylaws.
7.4. Removal. Any director may be removed from office only for cause
and only by the affirmative vote of the holders of two-thirds of the shares of
capital stock of the Corporation outstanding and entitled to vote in the
election of directors voting together as a group. For purposes of this Section
7.4, "cause" shall mean the wilful and continuous failure of a director to
substantially perform such director's duties for the Corporation (other than any
such failure resulting from temporary incapacity due to physical or mental
illness) or the wilful engaging by a director in gross misconduct materially and
demonstrably injurious to the Corporation.
7.5. Powers. The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of these Articles of Incorporation, or construed as or
deemed by inference or otherwise in any manner to exclude or limit the powers
conferred upon the Board of Directors under the Maryland Corporations and
Associations Article as now or hereafter in force.
ARTICLE VIII
LIABILITY
The liability of the directors and officers of the Corporation
to the Corporation and its shareholders for money damages is hereby limited to
the fullest extent permitted by Section 5-349 of the Courts and Judicial
Proceedings Article of the Annotated Code of Maryland (or its successor) as such
provisions may be amended from time to time. No amendment of these Articles of
Incorporation or repeal of any of its provisions shall limit or eliminate the
benefits provided to directors and officers under this provision with respect to
any act or omission that occurred prior to such amendment or repeal.
ARTICLE IX
INDEMNIFICATION
The Corporation shall indemnify directors, officers, agents
and employees as follows: (a) the Corporation shall indemnify its directors and
officers, whether serving the Corporation, any predecessor of the Corporation,
or at the Corporation's request any other entity, to the full extent required or
permitted by the Maryland Corporations and Associations Article now or hereafter
in force, including the advance of expenses under the procedures and to the full
extent permitted by law and (b) the Corporation shall indemnify other employees
and agents, whether serving the Corporation, any predecessor of the Corporation,
or at the Corporation's request any other entity, to such extent as shall be
authorized by the Board of Directors or the Corporation's Bylaws and be
permitted by law. The foregoing rights of indemnification shall not be exclusive
of any other rights to which those seeking indemnification may be entitled and
shall continue as to a person who has ceased to be a director, officer, agent or
employee and shall inure to the benefit of the heirs, executors and
administrators of such a person. The Board of Directors may take such action as
is necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such Bylaws, resolutions
or contracts implementing such provisions or such further indemnification
arrangements as may be
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permitted by law. No amendment of these Articles of Incorporation of the
Corporation shall limit or eliminate the right to indemnification provided
hereunder with respect to acts or omissions occurring prior to such amendment or
repeal.
ARTICLE X
VOTING REQUIREMENTS
Notwithstanding any provision of the General Laws of the State
of Maryland requiring action to be taken or authorized by the affirmative vote
of the holders of a designated proportion greater than a majority of the shares
of capital stock of the Corporation outstanding and entitled to vote thereupon,
such action shall, except as otherwise provided in these Articles of
Incorporation, be valid and effective if taken or authorized by the affirmative
vote of the holders of a majority of the total number of shares of capital stock
of the Corporation outstanding and entitled to vote thereupon voting together as
a single class.
ARTICLE XI
AMENDMENT
The Corporation reserves the right to amend, alter or repeal
any provision contained in these Articles of Incorporation in any manner
permitted by Maryland law, including any amendment changing the terms or
contract rights, as expressly set forth in its Charter, of any of its
outstanding stock by classification, reclassification or otherwise, upon the
vote of the holders of a majority of the shares of capital stock of the
Corporation outstanding and entitled to vote thereon voting together as a single
class; provided that any amendment to Article VI, Section 7.4 of Article VII or
to this Article XI must be adopted by the vote of the holders of two-thirds of
the shares of capital stock of the Corporation outstanding and entitled to vote
thereon voting together as a single class. All rights conferred upon
shareholders herein are subject to this reservation.
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BODDIE-NOELL PROPERTIES, INC.
ARTICLES SUPPLEMENTARY
for
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Pursuant to Sections 2-105(a)(9) and
2-208(a) of the
Maryland General Corporation Law)
BODDIE-NOELL PROPERTIES, INC., a corporation organized and
existing under the Maryland General Corporation Law (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Under a power contained in Section 5.3 of the charter
of the Corporation (the "Charter"), the Board of Directors of the Corporation as
required by Section 2-208 of the Maryland General Corporation Law at a meeting
duly called and held on March 17, 1999 classified and designated 1,000,000
shares (the "Shares") of Preferred Stock (as defined in the Charter) as shares
of Series A Junior Participating Preferred Stock, with the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption as follows, which upon any restatement of the Charter shall be made
part of Article V of the Charter, with any necessary or appropriate changes to
the enumeration or lettering of sections or subsections hereof:
Series A Junior Participating Preferred Stock
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 1,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
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Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if authorized by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), authorized on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Board of Directors or the Corporation
shall at any time authorize, declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior
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to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders
of the Corporation. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other articles
supplementary creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other stock of the Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
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(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not authorized or declared, on
shares of Series A Preferred Stock outstanding shall have been paid in
full, the Board and the Corporation shall not:
(i) authorize, declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) authorize, declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and
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restrictions on issuance set forth herein, in the Charter, or in any other
articles supplementary creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
authorized or declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Board of Directors or
the Corporation shall at any time authorize, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Board of Directors or the Corporation shall at any
time authorize, declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be
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adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of assets,
junior to all series of the Corporation's Preferred Stock.
Section 10. Amendment. The Charter shall not be amended
in any manner which would materially alter or change the preferences, voting
powers or other rights or restrictions of the Series A Preferred Stock, as set
forth herein, so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
SECOND: The Shares have been classified and designated by the
Board of Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the
Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under oath,
the undersigned President acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
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AMENDED AND RESTATED BYLAWS
OF
BODDIE-NOELL PROPERTIES, INC.
ARTICLE I
OFFICES
1.01 Registered Office. The Corporation shall maintain a registered
office in the State of Maryland as required by law.
1.02 Other Offices. The Corporation may also have offices at such other
places both within and without the State of Maryland as the Board of Directors
may from time to time determine or the business of the Corporation may require,
including, without limitation, the principal office at 3850 One First Union
Center, Charlotte, North Carolina 28202.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.01 Location. Meetings of shareholders for any purpose may be held at
such time and place, within or without the State of Maryland, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
2.02 Annual Meeting. Annual meetings of shareholders shall be held on a
date and a time as may be determined from time to time by the Board of
Directors, at which the shareholders shall elect by plurality vote a Board of
Directors, and transact such other business as may properly be brought before
the meeting in accordance with Section 2.04 herein.
2.03 Director Nominations. Only persons who are nominated in accordance
with the procedures set forth in this Section 2.03 shall be eligible for
election as directors. Prior to each annual meeting of shareholders (or special
meeting of shareholders held for the election of directors), the Board of
Directors shall nominate a slate of persons to stand for election to the Board
of Directors at the annual meeting. The notice to the shareholders of the
meeting shall set forth the names and backgrounds of the persons nominated by
the Board of Directors. Nominations of persons for election to the Board of
Directors of the Corporation may also be made at a meeting of shareholders or by
any shareholder of the Corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 2.03. Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made pursuant to timely notice in
writing to the Secretary of the Corporation. To be timely, a shareholder's
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notice shall be delivered to or mailed and received at the principal executive
offices of the Corporation not later than (i) with respect to an election to be
held at an annual meeting of shareholders, 90 days prior to the anniversary date
of the immediately preceding annual meeting, and (ii) with respect to an
election to be held at a special meeting of shareholders for the election of
directors, the close of business on the tenth day following the date on which
notice of such meeting is first given to shareholders. Such shareholder's notice
shall set forth (a) as to each person whom the shareholder proposes to nominate
for election or reelection as a director, (i) the name, age, business address
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
Corporation which are beneficially owned by such person and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including without limitation such person's written consent to being
named in C-1 the proxy statement as a nominee and to serving as a director if
elected); and (b) as to the shareholder giving the notice, (i) the name and
address, as they appear on the Corporation's books, of such shareholder and (ii)
the class and number of shares of the Corporation which are beneficially owned
by such shareholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to the nominee. The Chairman
of the meeting shall, if the facts warrant, determine and declare to the meeting
that a nomination was not made in accordance with the procedures prescribed by
the Bylaws, and if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
2.04 Notice and Business to be Conducted. Written notice of the annual
meeting shall be given to each shareholder entitled to vote thereat at least 10
but not more than 60 days before the date of the meeting.
At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before the meeting. To be properly
brought before an annual meeting, business must be (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a shareholder. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not later than 90 days prior to
the anniversary date of the immediately preceding annual meeting. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder proposing such
business, (c) the class and number of shares of the Corporation that are
beneficially owned by the shareholder, and (d) any material interest of the
shareholder in such business. Notwithstanding anything in the Bylaws to the
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contrary, no business shall be conducted at any annual meeting except in
accordance with the procedures set forth in this Section. The Chairman of the
annual meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting in accordance with the
provisions of this Section, and if he should so determine, he shall so declare
to the meeting and any such business not properly brought before the meeting
shall not be transacted.
2.05 Stock Ledger. The officer who has charge of the stock ledger of
the Corporation shall prepare and make, at least 10 days before every election
of directors, a complete list of the shareholders entitled to vote at said
election, arranged in alphabetical order, showing the address of and the number
of shares registered in the name of each shareholder. Such list shall be open to
the examination of any shareholder, during ordinary business hours, for a period
of at least ten days prior to the election, either at a place within the city,
town or village where the election is to be held and which place shall be
specified in the notice of the meeting, or, if not specified, at the place where
said meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and subject to the
inspection of any shareholder who may be present.
2.06 Special Meetings. (a) At any time in the interval between annual
meetings, special meetings of the shareholders, unless otherwise provided by law
or by the Articles of Incorporation, may be called by the Chief Executive
Officer and shall be called by the Chief Executive Officer upon the request in
writing of a majority of the Board of Directors or a majority of the Independent
Directors (as defined in Section 3.01 hereof), or upon the written request of
the holders of shares representing a majority of the shares of capital stock of
the Corporation which would be entitled to vote thereat.
(b) In order that the Corporation may determine the shareholders
entitled to request a special meeting, the Board of Directors may fix a record
date to determine the shareholders entitled to make such a request (the "Request
Record Date"). The Request Record Date shall not precede the date upon which the
resolution fixing the Request Record Date is adopted by the Board of Directors
and shall not be more than 10 days after the date upon which the resolution
fixing the Request Record Date is adopted by the Board of Directors. Any
shareholder of record seeking to have shareholders request a special meeting
shall, by sending written notice to the Secretary of the Corporation by
certified or registered mail, return receipt requested, request the Board of
Directors to fix a Request Record Date. The Board of Directors shall within 10
days after the date on which a valid request to fix a Request Record Date is
received, adopt a resolution fixing the Request Record Date. To be valid, such
written request shall set forth the purpose or purposes for which the special
meeting is to be held, shall be signed by one or more shareholders of record (or
their duly authorized proxies or other representatives), shall bear the date of
signature of each such shareholder (or proxy or other representative) and shall
set forth all information relating to such shareholder that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
14a-11 thereunder.
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(c) In order for a shareholder or shareholders to request a special
meeting, a written request or requests for a special meeting by the holders of
record as of the Request Record Date of at least a majority of the issued and
outstanding shares of stock that would be entitled to vote at such a meeting
must be delivered to the Corporation. To be valid, each written request by a
shareholder for a special meeting shall set forth the specific purpose or
purposes for which the special meeting is to be held (which purpose or purposes
shall be limited to the purpose or purposes set forth in the written request to
set a Request Record Date received by the Corporation pursuant to paragraph (b)
of this Section 2.06), shall be signed by one or more persons who as of the
Request Record Date are shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the name and
address, as they appear in the Corporation's books, of each shareholder signing
such request and the class and number of shares of the Corporation which are
owned of record and beneficially by each such shareholder, shall be sent to the
Secretary by certified or registered mail, return receipt requested, and shall
be received by the Secretary within 60 days after the Request Record Date.
(d) The Corporation shall not be required to call a special meeting
upon shareholder request unless, in addition to the documents required by
paragraph (c) of this Section 2.06, the Secretary receives a written agreement
signed by each Soliciting Shareholder (as defined below), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the Corporation's
costs of holding the special meeting, including the costs of preparing and
mailing proxy materials for the Corporation's own solicitation, provided that if
each of the resolutions introduced by any Soliciting Shareholder at such meeting
is adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is elected,
then the Soliciting Shareholders shall not be required to pay such costs. For
purposes of this paragraph (d), the following terms shall have the meanings set
forth below:
(1) "Affiliate" of any Person (as defined herein) shall mean any Person
controlling, controlled by or under common control with such first
Person.
(2) "Participant" shall have the meaning assigned to such term in Rule
14a-11 promulgated under the Exchange
Act.
(3) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
(4) "Proxy" shall have the meaning assigned to such term in Rule 14a-1
promulgated under the Exchange Act.
(5) "Solicitation" shall have the meaning assigned to such term in Rule
14a-11 promulgated under the
Exchange Act.
(6) "Soliciting Shareholder" shall mean, with respect to any special
meeting requested by a
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shareholder or shareholders, any of the following Persons:
(i) if the number of shareholders signing the request or requests
of meeting delivered to the Corporation pursuant to paragraph
(c) of this Section 2.06 is 10 or fewer, each shareholder
signing any such request;
(ii) if the number of shareholders signing the request or requests
of meeting delivered to the Corporation pursuant to paragraph
(c) of this Section 2.06 is more than 10, each Person who
either (I) was a Participant in any Solicitation of such
request or requests or (II) at the time of the delivery to
the Corporation of the documents described in paragraph (c)
of this Section 2.06 had engaged or intended to engage in any
Solicitation of Proxies for use at such special meeting
(other than a Solicitation of Proxies on behalf of the
Corporation); or
(iii) any Affiliate of a Soliciting Shareholder, if a majority of
the directors then in office determine that such Affiliate
should be required to sign the written notice described in
paragraph (c) of this Section 3.02 and/or the written
agreement described in this paragraph (d) in order to prevent
the purposes of this Section 2.06 from being evaded.
(e) Except as provided in the following sentence, any special meeting
shall be held at such hour and day as may be designated by whichever of the
Chairman or the Secretary shall have called such meeting. In the case of any
special meeting called by the Chairman or the Secretary upon the request of
shareholders (a "Request Special Meeting"), such meeting shall be held at such
hour and day as may be designated by the Board of Directors; provided, however,
that the date of any Request Special Meeting shall be not more than 60 days
after the Meeting Record Date (as defined in paragraph (h) of this Section
2.06); and provided further that in the event that the directors then in office
fail to designate an hour and date for a Request Special Meeting within 10 days
after the date that valid written requests for such meeting by the holders of
record as of the Request Record Date of at least a majority of the issued and
outstanding shares of stock that would be entitled to vote at such meeting are
delivered to the Corporation (the "Delivery Date"), then such meeting shall be
held at 2:00 p.m. local time on the 90th day after the Delivery Date or, if such
90th day is not a Business Day (as defined below), on the first preceding
Business Day. In fixing a meeting date for any special meeting, the Chairman,
the Secretary or the Board of Directors may consider such factors as he or it
deems relevant within the good faith exercise of his or its business judgment,
including, without limitation, the nature of the action proposed to be taken,
the facts and circumstances surrounding any request of such meeting, and any
plan of the Board of Directors to call an annual meeting or a special meeting
for the conduct of related business.
(f) The Corporation may engage regionally or nationally recognized
independent inspectors of elections to act as an agent of the Corporation for
the purpose of promptly performing a ministerial review of the validity of any
purported written request or requests for a
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special meeting received by the Secretary. For the purpose of permitting the
inspectors to perform such review, no purported request shall be deemed to have
been delivered to the Corporation until the earlier of (i) 5 Business Days
following receipt by the Secretary of such purported request and (ii) such date
as the independent inspectors certify to the Corporation that the valid requests
received by the Secretary represent at least a majority of the issued and
outstanding shares of stock that would be entitled to vote at such meeting.
Nothing contained in this paragraph (f) shall in any way be construed to suggest
or imply that the Board of Directors or any shareholder shall not be entitled to
contest the validity of any request, whether during or after such 5 Business Day
period, or to take any other action (including, without limitation, the
commencement, prosecution or defense of any litigation with respect thereto, and
the seeking of injunctive relief in such litigation).
(g) For purposes of these by-laws, "Business Day" shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of North Carolina are authorized or obligated by law or executive order to
close.
(h) In the case of any Request Special Meeting, (i) the record date for
such meeting (the "Meeting Record Date") shall be not later than the 30th day
after the Delivery Date and (ii) if the Board of Directors fails to fix the
Meeting Record Date within 30 days after the Delivery Date, then the close of
business on such 30th day shall be the Meeting Record Date.
2.07 Notice of Special Meeting. Notice of the special meeting shall be
given to each shareholder in the same manner as set forth in Section 2.04
hereof.
2.08 Business at Special Meeting. Business transacted at any special
meeting of shareholders shall be limited to the purposes stated in the notice.
Unless requested by shareholders entitled to cast a majority of all the votes
entitled to be cast at the meeting, a special meeting need not be called to
consider any matter which is substantially the same as a C-2 matter voted on at
any special meeting of the shareholders held during the preceding 12 months.
2.09 Quorum. The holders of a majority of the total capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Articles of Incorporation. If, however, such quorum shall not
be present or represented at any meeting of the shareholders, the Chairman of
the meeting or the shareholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified.
2.10 Vote. When a quorum is present at any meeting, the vote of the
holders of a majority of the shares of capital stock entitled to be voted on a
question brought before such meeting whose holders are present in person or
represented by proxy shall decide such question
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unless the question is one upon which, by express provision of statute or of the
Articles of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
2.11 Proxies. At all meetings of shareholders, a shareholder may vote
in person or vote by proxy that is executed in writing by the shareholder or
that is executed by his duly authorized attorney-in-fact. Such proxy shall be
filed with the Secretary of the Corporation or other persons authorized to
tabulate votes before or at the time of the meeting. No proxy shall be valid
after 11 months from the date of its execution unless otherwise provided in the
proxy.
ARTICLE III
DIRECTORS
3.01 Number. The number of directors of the Corporation that shall
constitute the whole Board of Directors shall be fixed from time to time by
resolution by the Board of Directors but shall not be less than five; provided,
however, that the tenure of office of a director shall not be affected by any
decrease or increase in the number of directors so made by the Board of
Directors. At all times that the Corporation intends to be qualified as a real
estate investment trust under the Internal Revenue Code of 1986, as amended, or
any successor statute, a majority of the Board of Directors shall be Independent
Directors (as hereinafter defined). For purposes of these Bylaws, "Independent
Director" shall mean a director of the Corporation who is not (i) an employee or
officer of the Corporation or a subsidiary or division thereof, (ii) a spouse,
parent or child of, or a relative living in the same household as, a principal
executive officer of the Corporation, or (iii) an individual member of an
organization acting as an advisor, consultant, legal counsel or acting in a
similar capacity that receives compensation on a continuing basis from the
Corporation in addition to director's fees.
3.02 Election and Term. Effective with the annual meeting of
shareholders to be held in 1999, the directors standing for reelection may be
classified, with respect to the terms for which they severally hold office, into
three classes, as nearly equal in number as possible, one class to hold office
initially for a term expiring at the next succeeding annual meeting of
stockholders, another class to hold office initially for a term expiring at the
second succeeding annual meeting of stockholders, and another class to hold
office initially for a term expiring at the third succeeding annual meeting of
stockholders, with the members of each class to hold office until their
successors are duly elected and qualify. At each annual meeting of the
stockholders, the successors to the class of directors whose term expires at
such meeting shall be elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year of their
election. However, the provisions of Section 3.04 of this Article III will still
apply to the appointment of directors to fill vacancies occurring in the Board
of Directors. Furthermore, this Section 3.02 does not apply to any director
elected solely by holders of one or more classes or series of Preferred Stock.
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3.03 Powers. The business and affairs of the Corporation shall be
managed in accordance with the Articles of Incorporation and these Bylaws under
the direction of its Board of Directors and where applicable, the Independent
Directors, which may exercise all of the powers of the Corporation, except such
as are by law or by the Corporation's Articles of Incorporation or by these
Bylaws conferred upon or reserved to the shareholders.
3.04 Vacancies. Any vacancy occurring in the Board of Directors for any
cause may be filled by a majority of the remaining members of the Board of
Directors, although such majority is less than a quorum; provided, however, that
if the Corporation has sought to qualify as a real estate investment trust and
in accordance with Section 3.01 a majority of the Board of Directors are
required to be Independent Directors, then Independent Directors shall nominate
replacements for vacancies among the Independent Directors. If the shareholders
of any class or series are entitled separately to elect one or more directors, a
majority of the remaining directors elected by that class or series or the sole
remaining director elected by that class or series may fill any vacancy among
the number of directors elected by that class or series. A director elected by
the Board of Directors to fill a vacancy shall be elected to hold office until
the next annual meeting of shareholders or until his successor is elected and
qualified.
3.05 Resignations. Any director or member of a committee may resign at
any time. Such resignation shall be made in writing and shall take effect at the
time specified therein, or if no time is specified, at the time of the receipt
by the Chairman of the Board of Directors, the Chief Executive Officer or the
Secretary. The acceptance of a resignation shall not be necessary to make it
effective.
3.06 Committees of the Board of Directors. The Board of Directors may
appoint from among its members one or more committees composed of three or more
directors. A majority of the members of any committee so appointed shall be
Independent Directors (as defined in Section 3.01). The Board of Directors may
delegate to any committee any of the powers of the Board of Directors except the
power to declare dividends or distributions on stock, recommend to the
shareholders any action which requires shareholder approval, amend the Bylaws,
approve any merger or share exchange or issue stock. However, if the Board of
Directors has given general authorization for the issuance of stock, a committee
of the Board of Directors, in accordance with a general formula or method
specified by the Board of Directors by resolution or by adoption of a stock
option plan, may fix the terms of stock subject to classification or
reclassification and the terms on which any stock may be issued.
Notice of committee meetings shall be given in the same manner as
notice for special meetings of the Board of Directors.
One-third, but not less than two, of the members of any committee shall
be present in person or by telephone at any meeting of such committee in order
to constitute a quorum for the transaction of business at such meeting, and the
act of a majority of those present shall be the act of such committee. The Board
of Directors may designate a Chairman of any committee and such Chairman or any
two members of any committee may fix the time and place of its meetings unless
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the Board of Directors shall otherwise provide. In the absence or
disqualification of any member of any such committee, the members thereof
present at any meeting and not disqualified from voting, whether or not they
constitute a quorum, may unanimously appoint another director to act at the
meeting in the place of such absent or disqualified members; provided, however,
that in the event of the absence or disqualification of an Independent Director,
such appointee shall be an Independent Director.
Each committee shall keep minutes of its proceedings and shall report
the same to the Board of Directors when required, and any action taken by the
committees shall be subject to revision and alteration by the Board of
Directors, provided that no rights of third persons shall be affected by any
such revision or alteration.
Subject to the provisions hereof, the Board of Directors shall have the
power at any time to change the membership of any committee, to fill all
vacancies, to designate alternate members to replace any absent or disqualified
member, or to dissolve any committee.
3.07 Meetings of the Board of Directors. Meetings of the Board of
Directors, regular or special, may be held at any place in or out of the State
of Maryland as the Board of Directors may from time to time determine or as
shall be specified in the notice of such meeting.
The first meeting of each newly elected Board of Directors shall be
held as soon as practicable after the annual meeting of the shareholders at
which the directors were elected. The meeting may be held at such time and place
as shall be specified in a notice given as hereinafter provided for special
meetings of the Board of Directors, except that no notice shall be necessary if
such meeting is held immediately after the adjournment and at the site of the
annual meeting of the shareholders.
Regular meetings of the Board of Directors may be held with or without
notice at such time and place as shall from time to time be determined by the
Board of Directors.
Special meetings of the Board of Directors may be called at any time by
two or more directors or by the Chairman of the Board of Directors or the Chief
Executive Officer.
Notice of the place and time of every special meeting of the Board of
Directors shall be delivered to each director either personally or by telephone,
facsimile, telegram or telegraph, or by leaving the same at his residence or
usual place of business at least forty-eight hours before the time at which such
meeting is to be held, or by first-class mail, at least three days before the
day on which such meeting is to be held. If mailed, such notice shall be deemed
to be given when deposited in the United States mail addressed to the director
at his post-office address as it appears on the records of the Corporation, with
postage thereon prepaid.
3.08 Quorum and Voting. At all meetings of the Board of Directors, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the action of a majority of the directors present at
any meeting at which a quorum is present shall be the
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action of the Board of Directors unless the concurrence of a greater proportion,
or the concurrence of a majority of the Independent Directors is required for
such action by law, the Corporation's Articles of Incorporation or these Bylaws.
If a quorum shall not be present at any meeting of directors, the directors
present may, by a majority vote, adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Notwithstanding the first paragraph of this Section 3.08, any action
pertaining to a transaction involving the Corporation in which any director or
officer of the Corporation or any affiliate of any of the foregoing persons has
an interest shall specifically be approved with respect to any isolated
transactions or generally be approved with respect to any series of similar
transactions, by a majority of the members of the Board of Directors, including
a majority of the Independent Directors who are not parties to and have no
financial interest in such transaction and so are not affiliates of such
interested party, even if such directors constitute less than a quorum.
In approving any contract, joint venture or other transaction or series
of transactions between the Corporation and any director or officer of the
Corporation or any affiliate of such persons, a majority of the directors
including a majority of the Independent Directors must determine that:
(a) the contract, joint venture or other transaction as contemplated is
fair and reasonable to the Corporation and its shareholders and on terms and
conditions no less favorable to the Corporation than those available from
unaffiliated third parties;
(b) if an acquisition of property other than mortgage loans is
involved, the total consideration (determined at the time the acquisition is
approved by the Independent Directors) for the property being acquired is not in
excess of the (i) appraised value of such property as stated in an appraisal by
a qualified independent appraiser with experience in appraising assets of the
type being acquired or (ii) fair value of such property as stated in an opinion
by a qualified independent consultant, selected, approved or ratified by the
Independent Directors prior to any such acquisition, and if the price is in
excess of the cost of the asset to such seller thereof, the Independent
Directors shall determine that substantial justification for such excess exists
and that such excess is not unreasonable; and
(c) if the transaction involves the making of loans or the borrowing of
money, the transaction is fair, competitive, and commercially reasonable and no
less favorable to the Corporation than loans between unaffiliated lenders and
borrowers under the same circumstances.
3.09 Organization. The Chairman of the Board of Directors shall preside
at each meeting of the Board of Directors, or in the absence or inability of the
Chairman of the Board of Directors to preside at a meeting, another director
chosen by a majority of the directors present shall act as Chairman of the
meeting and preside thereat. The Secretary (or, in his absence or inability to
act, any person appointed by the Chairman of the meeting) shall act as Secretary
of the meeting and keep the minutes thereof.
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3.10 Meeting by Conference Telephone. Unless otherwise restricted by
the Articles of Incorporation, members of the Board of Directors may participate
in a meeting by means of a conference telephone or similar communications
equipment if all persons participating in the meeting can hear each other at the
same time. Participation in a meeting by these means constitutes presence in
person at a meeting.
3.11 Action Without Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if a written consent to such action is signed by all
members of the Board of Directors or of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the Board of
Directors or committee.
3.12 Compensation of Directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of committees of the Board of Directors may be allowed like
compensation for attending committee meetings.
3.13 Investment Policies and Restrictions. It shall be the duty of the
Board of Directors to ensure that the purchase, sale, retention and disposal of
the Corporation's assets, and the investment policies of the Corporation and the
limitations thereon or amendment thereto are at all times in compliance with the
restrictions applicable to real estate investment trusts pursuant to the
Internal Revenue Code of 1986, as amended.
The Corporation shall not:
(a) invest in mortgage loans unless an appraisal is obtained concerning
the underlying property;
(b) invest in commodity or commodity future contracts other than
interest rate futures used solely for hedging purposes;
(c) issue debt securities unless the historical debt service coverage
of the most recently completed fiscal year, as adjusted for known changes, is
sufficient to service the higher level of debt (without regard to any applicable
balloon principal payments);
(d) invest in real estate contracts for sale, unless such real estate
contracts are recordable in the chain of title; or
(e) act in any way that would disqualify the Corporation as a real
estate investment trust under the provisions of the Code.
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The Corporation does not intend to invest in the securities of other
issuers for the purposes of exercising control (other than with respect to
wholly owned subsidiaries), to engage in the trading of or to underwrite
securities for other issuers, to engage in the purchase and sale (or turnover)
of investments other than as described in the Registration Statement or to offer
securities in exchange for property unless deemed prudent by a majority of the
directors.
The Independent Directors shall review the investment policies of the
Corporation at least annually to determine that the policies then being followed
by the Corporation are in the best interests of its shareholders. Each such
determination and the basis therefore shall be set forth in the minutes of the
Board of Directors.
The directors shall review the borrowings of the Corporation quarterly
for reasonableness in relation to the Corporation's net assets. The Corporation
shall not incur indebtedness if, after giving effect to the incurrence thereof,
aggregate indebtedness, secured and unsecured, would exceed three hundred
percent (300%) of the Corporation's net assets, on a consolidated basis, unless
approved by a majority of the directors, including a majority of the Independent
Directors, and disclosed to the shareholders in the next quarterly report of the
Corporation, along with justification for such excess. For this purpose, the
term "Net Assets" means the total assets (less intangibles) of the Corporation
at cost, before deducting depreciation or other non-cash reserves, less total
liabilities, as calculated at the end of each quarter on a basis consistently
applied.
The foregoing prohibitions and restrictions set forth in this Section
3.13 shall not be changed without the approval of the shareholders of the
Corporation.
ARTICLE IV
NOTICES
4.01 Writing. Notices to directors and shareholders when in writing or
by telegram as required by provisions of statutes, or by the Articles of
Incorporation, or by these Bylaws, shall be delivered personally or mailed to
the directors or shareholders at their addresses appearing on the books of the
Corporation.
4.02 Waiver. Whenever any notice is required to be given under
provisions of the statutes or of the Articles of Incorporation or of these
Bylaws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
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ARTICLE V
OFFICERS
5.01 Principal Officers. The principal officers of the Corporation
shall be a Chief Executive Officer, a President, one or more Vice Presidents, a
Treasurer and a Secretary. The Corporation may also have such other principal
officers, including one or more Controllers, as the Board of Directors may in
its discretion appoint. One person may hold the offices and perform the duties
of any two or more of said offices, except that no one person shall hold the
offices and perform the duties of President and Secretary.
5.02 Election, Term of Office and Remuneration. The principal officers
of the Corporation shall be elected annually by the Board of Directors at the
annual meeting thereof. Each such officer shall hold office until his successor
is elected and qualified or until his earlier death, resignation or removal. The
remuneration of all officers of the Corporation shall be fixed by the Board of
Directors. Any vacancy in any office shall be filled in such manner as the Board
of Directors shall determine.
5.03 Subordinate Officers. In addition to the principal officers
enumerated in Section 5.01 of this Article V, the Corporation may have one or
more Assistant Treasurers, Assistant Secretaries and Assistant Controllers and
such other subordinate officers, agents and employees as the Board of Directors
may deem necessary, each of whom shall hold office for such period as the Board
of Directors may from time to time determine. The Board of Directors may
delegate to any principal officer the power to appoint and to remove any such
subordinate officer, agents or employees.
5.04 Removal. Except as otherwise permitted with respect to subordinate
officers, any officer may be removed, with or without cause, at any time, by
resolution adopted by the Board of Directors.
5.05 Resignations. Any officer may resign at any time by giving written
notice to the Board of Directors (or to a principal officer if the Board of
Directors has delegated to such principal officer the power to appoint and to
remove such officer). The resignation of any officer shall take effect upon
receipt of notice thereof or at such later time as shall be specified in such
notice; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
5.06 Powers and Duties. The officers of the Corporation shall have such
powers and perform such duties incident to each of their respective offices and
such other duties as may from time to time be conferred upon or assigned to them
by the Board of Directors.
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ARTICLE VI
CERTIFICATE OF STOCK
6.01 Certificates. Every holder of stock in the Corporation shall be
entitled to have a certificate, signed by, or in the name of the Corporation by,
the Chairman or Vice Chairman of the Board of Directors or the President or a
Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by him in the Corporation. Any or all of the signatures on the certificate
may be a facsimile. In case any officer or officers who have signed, or whose
facsimile signature or signatures have been used on, any such certificate or
certificates shall cease to be such officer or officers of the Corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures have been used thereon
had not ceased to be such officer or officers of the Corporation. If the
Corporation shall be authorized to issue more than one class of stock, or more
than one series of any call, the designations, preference and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarization on the face or the
back of the certificate which the Corporation shall issue to represent such
class of stock; provided, however, that in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock, a statement
that the Corporation will furnish without charge to each shareholder who so
requests, the designations, preferences and relative, participating, option or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
6.02 Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost or destroyed.
6.03 Transfer of Stock. Subject to restrictions provided in the
Articles of Incorporation, shares of stock of the Corporation shall be
transferable on the books of the Corporation only by the holder of record
thereof, in person or by duly authorized attorney, upon surrender and
cancellation of a certificate or certificates for a like number of shares, with
an assignment or power of transfer endorsed thereon or delivered therewith, duly
executed, and with
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such proof of the authenticity of the signature and of authority to transfer,
and of payment of transfer taxes, as the Corporation or its agents may require.
6.04 Setting of Record Date on Transfer Books. The Board of Directors
shall fix in advance a date, not exceeding 60 days preceding the date of any
meeting of shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining the consent of shareholders for any purpose, as a record date for the
determination of the shareholders entitled to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital stock, or to give
such consent, and in such case such shareholders and only such shareholders as
shall be shareholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, or to give such consent, as the case may be
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
6.05 Registered Shareholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Maryland.
6.06 Control Shares. Pursuant to Section 3-702(b) of the Maryland
Corporations and Associates Article, the terms of Subtitle 7 of Title 3 of such
law (the "Control Share Acquisition Statute") shall be inapplicable to any
acquisition of "control shares," as defined in the Control Share Acquisition
Statute, effective as of the close of business on March 29, 1999.
ARTICLE VII
GENERAL PROVISIONS
7.01 Dividends. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Articles of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Articles of Incorporation.
7.02 Reserves. Before payment of any dividend, there may be set aside
out of any funds of the Corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for
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such other purpose as the directors shall think conducive to the interest of the
Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
7.03 Annual Report. The officers of the Corporation shall prepare or
cause to be prepared annually a full and correct report of the affairs of the
Corporation, including financial statements for the preceding fiscal year, which
shall be prepared in accordance with generally accepted accounting principles,
audited and certified by independent certified public accountants and
distributed to shareholders within one hundred twenty (120) days after the close
of the Corporation's fiscal year and a reasonable period of time (at least 10
days) prior to the annual meeting of shareholders. Such report shall also be
submitted at the annual meeting. The annual report shall also include full
disclosure of all material terms, factors and circumstances surrounding any
transactions between the Corporation and any director, or any affiliates of such
director. The Independent Directors will comment on the fairness of such
transactions in the annual report.
The Corporation shall also publish in the annual report the ratio of
the cost of raising capital during the year to the capital raised.
7.04 Quarterly Report. The officers of the Corporation shall also
prepare or cause to be prepared quarterly for each of the first three quarters
of each fiscal year, a full and correct report of the affairs of the
Corporation, including a balance sheet and financial statement of operations for
the preceding fiscal quarter, which need not be certified by independent
certified public accountants and shall be distributed to shareholders within
forty-five (45) days after the close of the Corporation's preceding fiscal
quarter.
7.05 Books of Account and Records. The Corporation shall maintain at
its office in the City of Charlotte and State of North Carolina correct and
complete books and records of account of all the business and transactions of
the Corporation, such books and records to include, without limitation, current
names and addresses of all shareholders as well as shareholder records. Upon the
request of, and reasonable notice given by, any shareholder, there shall be made
available for inspection such books and records in accordance with the
provisions of Maryland law during regular business hours of the Corporation.
7.06 Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
7.07 Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
7.08 Seal. The Board of Directors shall provide a suitable seal,
bearing the name of the Corporation, which shall be in the charge of the
Secretary. The Board of Directors may authorize one or more duplicate seals and
provide for the custody thereof. If the Corporation is required to place its
corporate seal to a document, it is sufficient to meet the requirement of any
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law, rule or regulation relating to a corporate seal to place the word "Seal"
adjacent to the signature of the person authorized to sign the document on
behalf of the Corporation.
ARTICLE VIII
SECURITIES HELD BY CORPORATION
8.01 Transfer of Securities Owned by the Corporation. All endorsements,
assignments, transfers, share powers or other instruments of transfer of
securities standing in the name of the Corporation shall be executed for and in
the name of the Corporation by the President or by the Executive Vice President,
or by any additional person or persons as may be thereunto authorized by the
Board of Directors.
8.02 Voting Securities Held by the Corporation. The President or the
Executive Vice President, or any other person thereunto authorized by the Board
of Directors, in person or by proxy or proxies appointed by such person or
persons, shall have full power and authority on behalf of the Corporation to
vote, act and execute consents, waivers and releases with respect to any
securities that the Corporation may own and that are issued by other
corporations, partnerships, limited liability companies or other entities.
8.03 Acting on Behalf of Entities that the Corporation Controls. The
President or the Executive Vice President, or any other person thereunto
authorized by the Board of Directors, in person or by proxy or proxies appointed
by such person or persons, shall have full power and authority to sign on behalf
of the Corporation, as general partner, manager, member or security holder of
any entity that the Corporation controls, any instrument or document which has
been authorized to be signed in accordance with the preceding section 8.02.
ARTICLE IX
AMENDMENTS
9.01 Amendments. These Bylaws may be altered or repealed or new bylaws
may be made by the shareholders entitled to vote thereon at any annual or
special meeting thereof or by the Board of Directors.-
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RIGHTS AGREEMENT
BODDIE-NOELL PROPERTIES, INC.
and
FIRST UNION NATIONAL BANK,
as Rights Agent
----------------
Dated as of March 18, 1999
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions....................................... 1
Section 2. Appointment of Rights Agent............................... 4
Section 3. Issue of Right Certificates............................... 4
Section 4. Form of Right Certificates................................ 6
Section 5. Countersignature and Registration......................... 6
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates............................... 7
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............................... 7
Section 8. Cancellation and Destruction of
Right Certificates...................................... 8
Section 9. Availability of Preferred Shares.......................... 9
Section 10. Preferred Shares Record Date.............................. 9
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights.............................. 9
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares..................................... 15
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.............................. 16
Section 14. Fractional Rights and Fractional Shares................... 17
Section 15. Rights of Action.......................................... 18
Section 16. Agreement of Right Holders................................ 18
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Section 17. Right Certificate Holder Not Deemed a
Stockholder............................................. 19
Section 18. Concerning the Rights Agent............................... 19
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.................................... 20
Section 20. Duties of Rights Agent.................................... 20
Section 21. Change of Rights Agent.................................... 23
Section 22. Issuance of New Right Certificates........................ 23
Section 23. Redemption................................................ 24
Section 24. Exchange.................................................. 24
Section 25. Notice of Certain Events.................................. 25
Section 26. Notices................................................... 26
Section 27. Supplements and Amendments................................ 27
Section 28. Successors................................................ 28
Section 29. Benefits of this Agreement................................ 28
Section 30. Severability.............................................. 28
Section 31. Governing Law............................................. 28
Section 32. Counterparts.............................................. 28
Section 33. Descriptive Headings...................................... 28
Signatures............................................................ 29
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Exhibit A - Form of Articles Supplementary
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred
Shares
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Agreement, dated as of March 18, 1999, between Boddie-Noell Properties,
Inc., a Maryland corporation (the "Company"), and First Union National Bank, as
Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding on March 29, 1999 (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Shares
of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
solely by virtue of its beneficial ownership, on the date hereof, of 15% or more
of the Common Shares of the Company outstanding as of the date hereof; provided,
however, that if any Person that, on the date hereof, beneficially owns 15% or
more of the Common Shares of the Company outstanding as of the date hereof
shall, after the date hereof, acquire any additional Common Shares of the
Company such that such Person's beneficial ownership of Common Shares of the
Company, expressed as a percentage of the total number of Common Shares of the
Company then outstanding, shall be 1% or more greater than the beneficial
ownership of Common Shares of the Company of such Person on the date hereof
(expressed as a percentage of the total number of Common Shares of the Company
outstanding on the date hereof), then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional
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Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person". Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person", as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on 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 with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
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Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder; provided, however, that no Common
Shares of which may be issuable to any Original Partner, in accordance with the
Operating Partnership Agreement, in exchange for units of limited partnership
interest in the Operating Partnership (or in any other limited partnership in
which the Company or an Affiliate of the Company acts as general partner) shall
be considered to be Beneficially Owned by an Original Partner who owns such
units until such Original Partner actually receives Common Shares of the Company
in exchange therefor.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in North Carolina or the state in which
the principal office of the Rights Agent is located are authorized or obligated
by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Charlotte, North Carolina time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Charlotte, North Carolina
time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $.01 per share, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in Section
7 hereof.
(i) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company having
the rights and preferences set forth in the Form of Articles Supplementary
attached to this Agreement as Exhibit A.
(k) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
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(l) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(m) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
(n) "Operating Partnership" shall mean Boddie-Noell Properties Limited
Partnership, a North Carolina limited partnership, and any successor thereof,
and "Operating Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of Boddie-Noell Properties Limited Partnership,
dated as of October 1, 1997, as amended.
(o) "Original Partner" means a person who or which was a limited
partner of the Operating Partnership as of the date hereof and any legatee or
devisee who becomes a limited partner of the Operating Partnership as a result
of the death of such person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement 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 entity holding Common Shares for or pursuant to the terms of any
such plan) of, or of the first public announcement of the intention of 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 entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then outstanding Common Shares, or, in the case of any Person who on
the date hereof beneficially owns 15% or more of the outstanding Common Shares
outstanding as of the date hereof, would result in such person becoming an
Acquiring Person (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and not by separate
Right Certificates, and (y) the right to receive Right Certificates will be
transferable only in
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connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), representing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be represented solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights will
be represented by such certificates registered in the names of the holders
thereof together with a copy of the Summary of Rights attached thereto. Until
the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates, representing Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Boddie-Noell
Properties, Inc. and First Union National Bank, dated as of March 18,
1999 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Boddie-Noell Properties, Inc. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Boddie-Noell Properties, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) may become null and void.
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With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of such
one one-hundredths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President, any of its Vice Presidents, either manually or by facsimile
signature, shall have affixed thereto the Company's seal or a facsimile thereof,
and shall be attested by the Secretary or an Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
an authorized signatory of the Rights Agent and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by an
authorized signatory of the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of
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the Right Certificates, the number of Rights represented on its face by each of
the Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right 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 Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on March 29, 2009 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
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(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $36.00, and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares certificates representing the number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights represented thereby, a new Right Certificate
representing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
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Section 9. Availability of Preferred Shares. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares the number of
Preferred Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7. The Company covenants and
agrees that it will take all such action as may be necessary to ensure that all
Preferred Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
The Company further covenants and agrees that it 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 Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate representing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts representing Preferred Shares
upon the exercise of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate representing Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate representing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares transfer books of the Company are open. Prior to
the exercise of the Rights represented thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred Shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred 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.
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(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) authorize or declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its stock in a reclassification of the
Preferred Shares (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), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
stock which, if such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence shall be cancelled.
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(iii) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights, and the Company may, in
the discretion of the Board of Directors of the Company, and shall, in the event
the Company shall be unable to take all such action as may be necessary to
authorize such additional Common Shares, substitute, for each Common Share that
would otherwise be issuable upon exercise of a Right, a number of Preferred
Shares or fraction thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of stock of the Company issuable upon exercise
of one Right. In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Preferred Shares owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so is-
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sued, 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) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), 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 then current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the American Stock Exchange or,
if the Security is not listed or admitted to trading on the American 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
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Security is listed or admitted to trading or, if the Security is 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 Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is 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 Security selected by the Board
of Directors of the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
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(g) 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 one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-hundredths of a
share 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) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates representing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates representing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other stock
or securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) authorize, declare or pay
any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one-hundredths of a Preferred Share
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so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event
and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is authorized, declared or paid or
such a 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 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such
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Common Shares shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates representing fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole Right.
For the 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 for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the American Stock Exchange or, if the Rights
are not listed or admitted to trading on the American 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 in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. 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 of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
representing fractional
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Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the
Company, be represented by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Preferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights represented by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
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(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights represented thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; 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
commercially reasonable efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares 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 Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights represented by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent, its directors,
officers, employees and agents for, and to hold each of them harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent or such other indemnified
party, for anything done or omitted by the Rights Agent or such other
indemnified party in connection with the acceptance and administration of this
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Agreement or the exercise or performance of its duties hereunder, including the
costs and expenses of defending against any claim of liability in the premises.
The Rights Agent shall be fully protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement or the exercise or performance of its
duties hereunder in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document reasonably 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 set forth in Section 20 hereof.
The indemnity provided in this Section 18 shall survive the expiration
of the Rights and the termination of this Agreement.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
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 stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case, at
the time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by
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all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the written advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
written advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of any provision of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in this Agreement, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights represented by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further
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and other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action not be taken or omitted, as the case may be.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any 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) 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, as long as the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and obligations
imposed on it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent.
(k) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits).
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(l) 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.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of North Carolina (or of any other state of the United States so
long as such corporation is authorized to do business as a banking institution
in the State of North Carolina), in good standing, having an office in the State
of North Carolina, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million. 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 Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its
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option, issue new Right Certificates representing Rights in such form as may be
approved by its Board of Directors 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 Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the Company may,
at its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, 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. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights, the Company shall mail a notice of redemption to
all 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 Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem, acquire
or purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, by resolution adopted at any time after any Person becomes an
Acquiring Person, provide that the Company shall exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of
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such Person, becomes the Beneficial Owner of 50% or more of the Common Shares
then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights, and the Company may, in the discretion
of the Board of Directors of the Company, and shall, in the event the Company
shall be unable to take all such action as may be necessary to authorize such
additional Common Shares, substitute, for each Common Share that would otherwise
be issuable upon exchange of a Right, a number of Preferred Shares or fraction
thereof such that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such Preferred Shares or
fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares
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or to make any other distribution to the holders of its Preferred Shares (other
than a regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to authorize,
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action and,
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Boddie-Noell Properties, Inc.
3710 One First Union Center
Charlotte, North Carolina 28202
Attention: Philip S. Payne
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail,
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postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
First Union National Bank
1525 West W.T. Harris Boulevard
Charlotte, NC 28288-1153
Attention: Shareholder Services Group
Kristin N. Knapp
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate 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,
the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement as the Company may deem
necessary or desirable without the approval of any holders of certificates
representing Common Shares of the Company. Without limiting the foregoing, the
Company may at any time prior to such time as any Person becomes an Acquiring
Person amend this Agreement to lower the thresholds set forth in Sections 1(a)
and 3(a) to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than any Person that, on the date
hereof, beneficially owns 15% or more of the Common Shares of the Company
outstanding as of the date hereof and other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan) and (ii) 10%. From and after the Distribution Date, the Company may
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holder of Right 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 hereof in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or any Affiliate
or Associate of an Acquiring Person); provided, however, that from and after the
Distribution Date this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this 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 the benefits to, the
holders of Rights (other than an Acquiring Person or any Affiliate or Associate
of an Acquiring Person). Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares of the Company. Upon the delivery of a certificate from an
appropriate officer of the Company or, so long as any person is an Acquiring
Person hereunder, from the majority of the Company's Board of Directors, which
states that the
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proposed supplement or amendment is in compliance with the terms of this
Section, the Rights Agent shall execute such supplement or amendment. Anything
contained in this Agreement to the contrary notwithstanding, no supplement or
amendment that changes the rights and duties of the Rights Agent under this
Agreement shall be effective without the consent of the Rights Agent.
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. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Maryland and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. 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 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
BODDIE-NOELL PROPERTIES, INC.
Attest:
By: /s/ Andrea D. Teague By: /s/ Philip S. Payne
Name: Andrea D. Teague Name: Philip S. Payne
Title: Director of Investor Title: Executive Vice President
Relations and Chief Financial Officer
Attest: FIRST UNION NATIONAL BANK
By: /s/ Holly Drummond By: /s/ Kristin N. Knapp
Name: Holly Drummond Name: Kristin N. Knapp
Title: Corporate Trust Officer Title: Asst. Vice President
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EXHIBIT A
BODDIE-NOELL PROPERTIES, INC.
ARTICLES SUPPLEMENTARY
for
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Pursuant to Sections 2-105(a)(9) and
2-208(a) of the
Maryland General Corporation Law)
BODDIE-NOELL PROPERTIES, INC., a corporation organized and
existing under the Maryland General Corporation Law (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Under a power contained in Section 5.3 of the charter
of the Corporation (the "Charter"), the Board of Directors of the Corporation as
required by Section 2-208 of the Maryland General Corporation Law at a meeting
duly called and held on March 17, 1999 classified and designated 1,000,000
shares (the "Shares") of Preferred Stock (as defined in the Charter) as shares
of Series A Junior Participating Preferred Stock, with the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption as follows, which upon any restatement of the Charter shall be made
part of Article V of the Charter, with any necessary or appropriate changes to
the enumeration or lettering of sections or subsections hereof:
Series A Junior Participating Preferred Stock
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 1,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
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Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $.01 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if authorized by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), authorized on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Board of Directors or the Corporation
shall at any time authorize, declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior
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to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other articles
supplementary creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock and any other stock of the
Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
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(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not authorized or declared, on
shares of Series A Preferred Stock outstanding shall have been paid in
full, the Board and the Corporation shall not:
(i) authorize, declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock;
(ii) authorize, declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and
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restrictions on issuance set forth herein, in the Charter, or in any other
articles supplementary creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
authorized or declared, to the date of such payment, provided that the holders
of shares of Series A Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Board of Directors or
the Corporation shall at any time authorize, declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Board of Directors or the Corporation shall at any
time authorize, declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be
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adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall
rank, with respect to the payment of dividends and the distribution of assets,
junior to all series of the Corporation's Preferred Stock.
Section 10. Amendment. The Charter shall not be amended
in any manner which would materially alter or change the preferences, voting
powers or other rights or restrictions of the Series A Preferred Stock, as set
forth herein, so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
SECOND: The Shares have been classified and designated by the
Board of Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the
Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under oath,
the undersigned President acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
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Exhibit B
Form of Right Certificate
Certificate No. R- _____
______ Rights
NOT EXERCISABLE AFTER MARCH 29, 2009 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT.
Right Certificate
BODDIE-NOELL PROPERTIES, INC.
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of March 18, 1999 (the "Rights Agreement"), between
Boddie-Noell Properties, Inc., a Maryland corporation (the "Company"), and First
Union National Bank, as rights agent ("Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., Charlotte, North Carolina time, on
March 29, 2009 at the principal office of the Rights Agent, or at the office of
its successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.01 per share
(the "Preferred Shares"), of the Company, at a purchase price of $36.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights represented by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of March 29, 1999, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights represented by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is
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hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
represented by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for Preferred Shares or shares of the Company's Common Stock, par value $.01 per
share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights represented hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be represented by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights represented by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of , ____.
ATTEST: BODDIE-NOELL PROPERTIES, INC.
______________________________ By ________________________________
Authorized Signature
Countersigned:
FIRST UNION NATIONAL BANK
By ________________________________
Authorized Signature
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<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby
sells, assigns and transfers
unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ______________________, ____
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
- ------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_________________________________
Signature
- ------------------------------------------------------------
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Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: BODDIE-NOELL PROPERTIES, INC.
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
- ------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------
If such number of Rights shall not be all the Rights represented by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- ------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------
Dated: _____________, ____
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or
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<PAGE>
a commercial bank or trust company having an office or correspondent in the
United States.
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------
The undersigned hereby certifies that the Rights represented by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_______________________________
Signature
- -------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights represented by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On March 17, 1999 the Board of Directors of Boddie-Noell Properties,
Inc. (the "Company") authorized a dividend of one preferred share purchase right
(a "Right") for each outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend is payable on March 29, 1999
(the "Record Date") to the stockholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company at a price of $36.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and First Union National
Bank, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be represented, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached thereto. Any person or group owning in excess
of 15% of the outstanding Common Shares as of March 29, 1999, shall only trigger
the effects referred to above if such person increases its ownership of Common
Shares to in excess of the percentage of outstanding Common Shares on such date
plus 1%.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates representing Common Shares
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate. As
soon as practicable follow-
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<PAGE>
ing the Distribution Date, separate certificates representing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will represent the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 29, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend authorized per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are
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<PAGE>
sold after a person or group has become an Acquiring Person, proper provision
will be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right. In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision shall be made
so that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise that number of Common Shares having a market value of
two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may cause the
Company to exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange ratio of one
Common Share, or one one-hundredth of a Preferred Share (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be represented by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may cause the Company to
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time on such basis with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person or group of
affiliated or associated
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persons (other than persons owning in excess of 15% of the outstanding Common
Shares on March 29, 1999) and (ii) 10%, except that from and after such time as
any person or group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders of
the Rights. Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
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BODDIE-NOELL PROPERTIES, INC.
3850 One First Union Center
Charlotte, North Carolina 28202
Contact: Philip S. Payne
Executive Vice President & CFO
Tel: (704) 944-2020
Fax: (704) 944-2039
PRESS RELEASE
FOR IMMEDIATE RELEASE
BODDIE-NOELL PROPERTIES, INC. DECLARES DIVIDEND
DISTRIBUTION OF PREFERRED SHARE PURCHASE RIGHTS
Charlotte, North Carolina
March 18, 1999
The Board of Directors of Boddie-Noell Properties, Inc. (AMEX:BNP) has
declared a dividend distribution of one Preferred Share Purchase Right on each
outstanding share of Boddie-Noell common stock.
B. Mayo Boddie, Chairman of the Board of Boddie-Noell stated: "The
Rights are designed to assure that all of our shareholders receive fair and
equal treatment in the event of any proposed takeover of the Company and to
guard against partial tender offers, squeeze-outs, open market accumulations and
other abusive tactics to gain control of Boddie-Noell without paying all
shareholders a control premium."
The Rights will be exercisable only if a person or group acquires 15%
or more of Boddie-Noell common stock or announces a tender offer the
consummation of which would result in ownership by a person or group of 15% or
more of the common stock. Each Right will entitle shareholders to buy one
one-hundredth of a share of a new series of junior participating preferred stock
at an exercise price of $36.
If Boddie-Noell is acquired in a merger or other business combination
transaction after a person has acquired 15% or more of the Company's outstanding
common stock, each Right will entitle its holder to purchase, at the Right's
then-current exercise price, a number of the acquiring company's common shares
having a market value of twice such price. In addition, if a person or group
acquires 15% or more of Boddie-Noell's outstanding common stock, each Right will
entitle its holder (other than such person or members of such group) to
purchase, at the Right's then-current exercise price, a number of Boddie-Noell's
common shares having a market value of twice such price.
Following the acquisition by a person or group of beneficial ownership
of 15% or more of the Company's common stock and prior to an acquisition of 50%
or more of the common
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stock, the Board of Directors may exchange the Rights (other than Rights owned
by such person or group), in whole or in part, at an exchange ratio of one share
of common stock (or one one-hundredth of a share of the new series of junior
participating preferred stock) per Right.
Prior to the acquisition by a person or group of beneficial ownership
of 15% or more of the Company's common stock, the Rights are redeemable for one
cent per Right at the option of the Board of Directors.
The Board of Directors is also authorized to reduce the 15% thresholds
referred to above to not less than 10%.
The Rights are intended to enable all Boddie-Noell shareholders to
realize the long-term value of their investment in the Company. They will not
prevent a takeover, but should encourage anyone seeking to acquire the Company
to negotiate with the Board prior to attempting a takeover.
The dividend distribution will be made on March 29, 1999, payable to
shareholders of record on that date. The Rights will expire on March 29, 2009.
The Rights distribution is not taxable to shareholders.
Boddie-Noell Properties, Inc. is a real estate investment trust focused
on owning and operating apartment communities. We own and operate fifteen
apartment communities containing a total of 3,440 apartments. We also have the
right to acquire an additional apartment community containing 108 units, which
is currently under construction. BNP Management, Inc., an unconsolidated
subsidiary, provides third-party management services for four apartment
communities, containing a total of 891 apartments, and one shopping center. In
addition to our apartment properties, we own 47 restaurant properties, which are
leased on a triple net basis to a restaurant operator. We, along with our
management subsidiary, operate in the states of North Carolina and Virginia.
You may e-mail information requests to our investor relations department at
investor.relations @bnproperties.com or visit our website at
www.bnproperties.com.
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