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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SEA PINES ASSOCIATES, INC.
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(Exact name of registrant as specified in its charter)
South Carolina 57-0845789
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(State of incorporation or organization) (IRS Employer
Identification No.)
32 Greenwood Drive, Hilton Head Island, South Carolina 29928
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(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
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This amendment amends the Company's registration statement on Form 8-A
(the "Form 8-A") filed with the Commission on August 30, 1993.
Item 1. Description of Securities to be Registered
Item 1 of this Form 8-A is hereby amended as follows:
On July 20, 1999, the Company amended and restated the Rights Agreement
to reflect the appointment of EquiServe Trust Company, N.A. as Rights Agent.
This amendment amends the Company's registration statement on Form 8-A
(the "Form 8-A") filed with the Commission on August 30, 1993.
A copy of the First Amended and Restated Rights Agreement, dated as of
August 23, 1993, and amended and restated as of July 20, 1999 between the
Company and the Rights Agent, specifying the terms of the Rights (which Rights
Agreement includes as exhibits the form of Amendment to the Articles of
Incorporation setting forth the terms of the Preferred Shares, the form of Right
Certificate and the Summary of Rights to Purchase Preferred Shares) is attached
hereto as an exhibit and is incorporated herein by reference. The description of
the Rights set forth in this Item 1 as hereby amended is qualified by reference
to such exhibit.
Item 2. Exhibits
Item 2 of this Form 8-A is hereby amended as follows:
1 and 2. First Amended and Restated Rights Agreement, dated as of
August 23, 1993, and amended and restated as of July 20, 1999 between Sea Pines
Associates, Inc. and EquiServe Trust Company, N.A., which includes as exhibits
the form of Amendment to the Articles of Incorporation setting forth the terms
of the newly created series of preferred shares, without par value, of Sea Pines
Associates, Inc. as Exhibit A, the form of Right Certificates as Exhibit B and
the Summary of Rights to Purchase Preferred Shares as Exhibit C.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: July 20, 1999
SEA PINES ASSOCIATES, INC.
By: /s/ Michael E. Lawrence
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Michael E. Lawrence
President and
Chief Executive Officer
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EXHIBIT INDEX
These exhibits are numbered in accordance with the exhibit numbers assigned in
Item 2 of Form 8-A.
Exhibit No. Description
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1 First Amended and Restated
Rights Agreement, dated
as of August 23, 1993, and
amended and restated as of
July 20, 1999 between
Sea Pines Associates, Inc.
and EquiServe Trust Company,
N.A., which includes as
exhibits the form of Amendment
to the Articles of
Incorporation setting
forth the terms of the
newly created series of
preferred shares, without
par value, of Sea Pines
Associates, Inc. as
Exhibit A, the form of
Right Certificates as
Exhibit B and the
Summary of Rights to
Purchase Preferred Shares
as Exhibit C.
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SEA PINES ASSOCIATES, INC.
AND
EQUISERVE TRUST COMPANY, N.A.
FIRST AMENDED AND RESTATED RIGHTS AGREEMENT
DATED AS OF AUGUST 23, 1993, AND AMENDED AND
RESTATED AS OF JULY 20, 1999
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TABLE OF CONTENTS
Page
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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.... 8
SECTION 8. Cancellation and Destruction of Right Certificates............... 9
SECTION 9. Reservation and Availability of Preferred Shares................. 9
SECTION 10. Preferred Shares Record Date.................................... 11
SECTION 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights................................................ 11
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares...... 18
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power................................................... 19
SECTION 14. Fractional Rights and Fractional Shares......................... 20
SECTION 15. Rights of Action................................................ 22
SECTION 16. Agreement of Right Holders...................................... 22
SECTION 17. Right Certificate Holder Not Deemed a Shareholder............... 23
SECTION 18. Concerning the Rights Agent..................................... 23
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SECTION 19. Merger or Consolidation or Change of Name of Rights Agent....... 23
SECTION 20. Duties of Rights Agent.......................................... 24
SECTION 21. Change of Rights Agent.......................................... 26
SECTION 22. Issuance of New Right Certificates.............................. 26
SECTION 23. Redemption...................................................... 27
SECTION 24. Exchange........................................................ 28
SECTION 25. Notice of Certain Events........................................ 29
SECTION 26. Notices......................................................... 30
SECTION 27. Supplements and Amendments...................................... 31
SECTION 28. Successors...................................................... 31
SECTION 29. Determinations and Actions by the Board of Directors, etc....... 31
SECTION 30. Benefits of this Agreement...................................... 32
SECTION 31. Severability.................................................... 32
SECTION 32. Governing Law................................................... 32
SECTION 33. Counterparts.................................................... 32
SECTION 34. Descriptive Headings............................................ 33
Exhibit A Terms of Preferred Shares
Exhibit B Form of Right Certificate
Exhibit C Summary of Rights to Purchase Preferred Shares
ii
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FIRST AMENDED AND RESTATED RIGHTS AGREEMENT
First Amended and Restated Rights Agreement, dated as of
August 23, 1993 and amended and restated as of July 20, 1999 between Sea Pines
Associates, Inc., a South Carolina corporation (the "Company"), and EquiServe
Trust Company, N.A., a national banking association, 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 as of the close
of business on September 2, 1993 (the "Record Date"), each Right representing
the right to purchase one one-thousandth of a share of Series B Junior
Cumulative Preferred Shares, without par value and liquidation preference $100
per share (the "Preferred Shares"), upon the terms and subject to the conditions
herein set forth, and has further authorized (i) 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 (as such term is defined in
Section 3), the Redemption Date and the Final Expiration Date (as such terms are
defined in Section 7) and (ii) the issuance of one Right with respect to each
Common Share that shall become outstanding between the Distribution Date and the
earlier of the Redemption Date and the Final Expiration Date by reason of the
exercise of any option, warrant or conversion privilege contained in any option,
warrant, right or convertible security issued by the Company prior to the
Distribution Date (other than the Rights) unless the Board of Directors provides
to the contrary at the time of the issuance of any such option, warrant, right
or convertible security.
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 who or that,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the Common Shares then outstanding, but shall
not include (i) the Company, (ii) any wholly-owned Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company, or (iv) 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" as the result of an acquisition of Common Shares by the
Company that, by reducing the number of Common Shares outstanding, increases the
percentage of Common Shares beneficially owned by such Person to 20% or more of
the Common Shares then outstanding; provided, however, that if and at such time
as a Person who would otherwise be an "Acquiring Person" but for the provisions
of this sentence shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be an "Acquiring Person". Notwithstanding any provision to the
contrary contained herein, 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 first sentence of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number
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of shares of Company Stock 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, solely as a result of such inadvertent acquisition,
be deemed to be an "Acquiring Person" for any purpose of this Agreement.
(b) "Adverse Person" shall mean any Person, who, with its
Affiliates and Associates, shall be the Beneficial Owner of Common Shares in
excess of an Ownership Limitation specified as to such Person, pursuant to
Section 11(a)(ii)(B).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") as such rule is in effect on the Record Date.
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" and shall be deemed to have "beneficial
ownership" of any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, owns or 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 (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than the 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 or otherwise has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, pursuant to this subparagraph (B), 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 of the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(ii) that are beneficially owned pursuant to
subparagraphs (i)(A) and (B) of this subsection (d), 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 for the purpose of
acquiring, holding, voting (except
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to the extent permitted by the proviso in subparagraph (i)(B)
of this subsection (d)) or disposing of any securities of the
Company, provided, however, that nothing in this subsection
(d) shall cause a Person engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date
of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00
P.M., Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company
shall mean the Voting Common Shares, without par value 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
Person or, if such Person is a Subsidiary of another Person, the Person or
Persons that ultimately control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3.
(i) "Final Expiration Date" shall have the meaning set forth
in Section 7.
(j) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(k) "Preferred Shares" shall mean shares of Series B Junior
Cumulative Preferred Shares, without par value and liquidation preference $100
per share, of the Company.
(l) "Redemption Date" shall have the meaning set forth in
Section 7.
(m) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company, an Acquiring Person or an Adverse Person that an Acquiring
Person or an Adverse Person has become such.
(n) "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 interests is owned, directly or indirectly, by such Person.
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(o) "Triggering Event" shall mean any event described in
Section 11(a)(ii) or any event described in Section 13.
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 (and such holders shall, in accordance with Section 3, 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, upon ten (10) days' prior written notice to
the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in
no event be liable for, the acts or omissions of any such co-Rights Agent. In
the event the Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and any Co-Rights Agents shall be as the Company
shall determine.
SECTION 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Shares Acquisition Date, and
(ii) the tenth Business Day after the date of the commencement of, or first
public announcement of the intention of any Person to commence, a tender or
exchange offer the consummation of which would result in beneficial ownership by
a Person (other than the Company, any wholly owned Subsidiary of the Company or
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 20% or more of the outstanding Common Shares (including any such date that is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of (i) and (ii) being herein referred to as the "Distribution Date") (x)
the Rights will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) 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 connection with the
transfer of Common Shares. As soon as practicable after the Distribution Date,
or, with respect to Common Shares issued on or after the Distribution Date and
prior to the earlier of the Redemption Date and the Final Expiration Date by
reason of the exercise of any option, warrant, right or convertible security
issued by the Company prior to the Distribution Date (other than the Rights),
unless otherwise provided to the contrary by the Board of Directors at the time
of the issuance of any such option, warrant, right or convertible security,
simultaneously with the issuance of such Common Shares, the Rights Agent will
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, or, with
respect to Common Shares so issued on or after the Distribution Date (unless
otherwise provided with respect thereto as aforesaid), to the record holder of
such Common Shares on the date of issuance, at the address of such holder shown
on the records of the Company, a Right Certificate, in substantially the form of
Exhibit B, evidencing one Right for each Common Share so held, subject to
adjustments as provided herein. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
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(b) As soon as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form attached hereto as Exhibit C (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 evidenced by such certificates registered in the names of the holders thereof
(together with a copy of the Summary of Rights). Until the Distribution Date (or
the earlier Redemption Date or 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 for Common Shares issued after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph (c)) 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 the First Amended and
Restated Rights Agreement between Sea Pines Associates, Inc.
(the "Company") and EquiServe Trust Company, N.A. as Rights
Agent, dated as of August 23, 1993 and amended and restated as
of July 20, 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 the
Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly following receipt
of a written request therefor.
Under certain circumstances, Rights beneficially owned by
Acquiring Persons or Adverse Persons or Associates or
Affiliates of Acquiring Persons or Adverse Persons (as such
terms are defined in the Rights Agreement) and any subsequent
holder of such Rights may become null and void.
With respect to such certificates bearing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Final Expiration Date, the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone and registered
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holders of Common Shares shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificates. In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the earlier of (i) the Distribution
Date or (ii) the Final Expiration 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 in the form of Exhibit B
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 any national securities
association on whose interdealer quotation system the Rights may from time to
time be authorized for quotation, or to conform to usage. Subject to the
provisions of Section 22, the Rights Certificates that are issued in respect of
Common Shares that were issued and outstanding as of the Record Date, shall be
dated as of the Record Date, and all Right Certificates that are issued in
respect of other Common Shares shall be dated as of the respective dates of
issuance of such Common Shares, and in either case on their face shall entitle
the holders thereof to purchase such number of Preferred Shares as shall be set
forth therein at the price per one one-thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such Preferred Shares and the
Purchase Price shall be subject to adjustment as provided herein.
Any Right Certificate issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person or an Adverse Person
or any Associate or Affiliate of an Acquiring Person or an Adverse Person and
any Right Certificate issued at any time upon the transfer of any Rights to an
Acquiring Person or an Adverse Person or any Associate or Affiliate of an
Acquiring Person or an Adverse Person or to any nominee of such Acquiring
Person, Adverse Person, Associate or Affiliate, and any Right Certificate issued
pursuant to Section 6 or Section 11 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain the following legend:
The Rights represented by this Right Certificate were issued
to a Person who was an Acquiring Person or an Adverse Person
or an Affiliate or an Associate of an Acquiring Person or an
Adverse Person. This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in Section 11(a)(ii) of the Rights Agreement.
SECTION 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either
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manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof that shall be attested by the secretary, or an assistant
secretary or treasurer, of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company 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 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 the office of the Rights Agent designated for such
purposes, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date and certificate number 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, 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 and the Final Expiration Date, any Right
Certificate or Right Certificates 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 Preferred Shares (or other
securities or other assets, as the case may be) 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 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, with the form of assignment and
certificate appropriately executed, at the office of the Rights Agent designated
for such purpose.
Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Right Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. 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
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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 countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) 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 office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one one-thousandth of a Preferred Share (or Common Shares, other
securities, cash or other assets, as the case may be) as to which the Rights are
exercised, at or prior to the earlier of (i) the close of business on August 23,
2003 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 (the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a
Preferred Share pursuant to the exercise of a Right shall initially be $50,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 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 Preferred Shares (or other
securities or other assets, as the case may be) 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 in cash, or 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 for 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-thousandths 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
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Company the amount of cash to be paid in lieu of issuance of fractional
interests in shares in accordance with Section 14, (iii) promptly 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 Certificates registered
in such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. The payment of the Purchase
Price may be made (x) in cash or by certified bank check or money order payable
to the order of the Company, or (y) by delivery of a certificate or certificates
(with appropriate stock powers executed in blank attached thereto) evidencing a
number of Common Shares equal to the then Purchase Price divided by the closing
price (as determined pursuant to Section 11(d) hereof) per Common Share on the
trading date immediately preceding the date of such exercise. In the event that
the Company is obligated to issue other securities (including Common Shares) of
the Company or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities are
available for distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of a Triggering
Event that, upon any exercise of Rights, a number of Rights be exercised so that
only whole Preferred Shares would be issued.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported transfer or exercise unless such registered holder shall have (i)
completed and signed the certificate following the form of assignment or
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such assignment or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in 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
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<PAGE> 13
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of 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 held in its treasury (or, following a Triggering Event, Common Shares
and/or other securities), the number of Preferred Shares (or, following a
Triggering Event, Common Shares and/or other securities) that will be sufficient
to permit the exercise in full of all outstanding Rights pursuant to the terms
of this Agreement.
So long as the Preferred Shares (or, following a Triggering
Event, Common Shares and/or other securities) issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
The Company shall use its best efforts to (i) file, as soon as
is practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Sections
11(a)(iii) and 13 hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Final Expiration Date. The
Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this paragraph, the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or, following a
Triggering Event, Common Shares and/or other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
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<PAGE> 14
The Company further covenants and agrees that, subject to
Sections 6 and 7(c), it will pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates or of any Preferred Shares (or, following
a Triggering Event, Common Shares and/or other securities) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax that
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 (or, following a Triggering Event, Common
Shares and/or other securities) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
(or, following a Triggering Event, Common Shares and/or other securities) 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 satisfaction that no such tax
is due.
SECTION 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares (or, following a Triggering Event,
Common Shares and/or other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares (or, following a Triggering Event, Common Shares and/or other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares (or, following a Triggering
Event, Common Shares and/or other securities) 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 (or, following a Triggering Event, Common Shares
and/or other securities) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate, as
such, shall not be entitled to any rights of a holder of Preferred Shares (or,
following a Triggering Event, Common Shares and/or other securities) 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.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) 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 capital stock in a reclassification
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<PAGE> 15
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 capital 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
capital stock that, 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. If an
event occurs that would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the
event:
(A) any Person is or becomes an Acquiring
Person or
(B) (1) the Board of Directors shall
designate a specific limitation on the percentage of Common
Shares then outstanding that a specified Person may
beneficially own, which percentage (the "Ownership
Limitation") may be less than, equal to, or more than the
percentage of then outstanding Common Shares owned by such
Person, but shall in no event be less than 10% of the Common
Shares then outstanding; and (2) at least a majority of the
Board of Directors who are not officers of the Company and who
are not representatives, nominees, Affiliates or Associates of
such Person, after reasonable inquiry and investigation,
including consultation with such persons as such directors
shall deem appropriate, shall (x) conclude that beneficial
ownership by such Person of a percentage of Common Shares
exceeding the Ownership Limitation is (or would likely be)
intended, or is (or would likely be) used to cause the Company
to repurchase the Common Shares beneficially owned by such
Person or to cause pressure on the Company to take action or
enter into a transaction or series of transactions (including
a sale of the Company or transactions leading to a change in
control of the Company) under circumstances where the Board of
Directors determines that the best long-term interests of the
Company and its shareholders would not be served by effecting
such repurchase, taking such action or entering into such
transactions or series of transactions at that time or (y)
determine that beneficial ownership by such Person of a
percentage of Common Shares exceeding the Ownership Limitation
is causing or reasonably likely to cause a material adverse
impact on the business or prospects of the Company; and (3)
such Person, together with its Affiliates and Associates,
shall (before or after the occurrence of (1) and (2) above)
beneficially own a percentage of Common Shares that exceeds
the Ownership Limitation;
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<PAGE> 16
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of Preferred Shares, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable and dividing that product by (y) 50% (in the
case of an event described in Section 11(a)(ii)(A) hereof) or that percentage
obtained by dividing 50% by a fraction, the numerator of which is 20% and the
denominator of which is the applicable Ownership Limitation (in the case of an
event described in Section 11(a)(ii)(B) hereof) of the current per share market
price of the Common Shares (determined pursuant to Section 11(d)) on the fifth
day after the date of the occurrence of any one of the events listed above in
this subparagraph (ii). Notwithstanding the foregoing, upon the occurrence of
any of the events listed above in this subparagraph (ii), any Rights that are or
were beneficially owned by an Acquiring Person or an Adverse Person (or any
Associate or Affiliate of such Acquiring Person or Adverse Person) on or after
the earlier of the Distribution Date or the Shares Acquisition Date shall become
void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement.
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued Common Shares 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 or shall substitute for
the Common Shares otherwise purchasable, upon payment of the Purchase Price, a
combination of some or all of the following that has an equal aggregate value
(where such aggregate value has been determined by the Board of Directors of the
Company after considering the advice of a nationally recognized investment
banking firm selected by the Board of Directors): (i) fractions of a Common
Share, (ii) other equity securities of the Company, (iii) debt securities of the
Company or (iv) other assets; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to this subparagraph within
thirty (30) days following the later of (x) the first occurrence of an event
described in Section 11(a)(ii) and (y) the date on which the Company's right of
redemption pursuant to Section 31 expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the difference between the value of the Common Shares
that would have been issuable upon exercise of the Right and the Purchase Price.
The value of such Common Shares shall be the aggregate of the current per share
market price (determined pursuant to Section 11(d)) for such Common Shares on
the Section 11(a)(ii) Trigger Date.
(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
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<PAGE> 17
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 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 that 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). 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. 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 or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that 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 corporation) of evidences of indebtedness, cash 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)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current per share market price of the Preferred Shares (as defined in Section
11(d)) 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 and shall be binding on the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares. 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 that would then be in effect if such record date had not been
fixed.
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<PAGE> 18
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall be
deemed to be the average of the daily closing prices per share of such Common
Shares for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the "current per share market price" of Common
Shares on any date shall be deemed to be the average of the daily closing prices
per share of such Common Shares for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
current per share market price of the Common Shares is determined during a
period following the announcement by the issuer of such Common Shares of (1) a
dividend or distribution on such Common Shares payable in such Common Shares or
securities convertible into such Common Shares, or (2) any subdivision,
combination or reclassification of such Common Shares, and prior to the
expiration of 30 Trading Days, or ten (10) Trading Days, as set forth above,
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per Common Share equivalent. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Common Shares
are listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the Common Shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Shares selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Shares, the fair value of the Common Shares on such date
as determined in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day. If
the Common Shares are not publicly held or not 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 conclusive for
all purposes.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be determined
in the same manner as set forth above for Common Shares in clause (i) of this
Section 11(d). If the current market price per
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<PAGE> 19
Preferred Share cannot be determined in the manner provided above or if the
Preferred Shares are not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per Preferred
Share shall be conclusively deemed to be an amount equal to 1,000 (as such
number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares occurring
after the date of this Agreement) multiplied by the current market price per
Common Share. If neither the Common Shares nor the Preferred Shares are publicly
held or so listed or traded, "current market price" per Preferred Share 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 conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one one-thousandth of
a Preferred Share shall be equal to the "current market price" of one Preferred
Share divided by 1,000.
(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 that 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 thousandth of a
Common Share or other share or one-millionth of a Preferred Share 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 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), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital 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 shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on
like terms to any such other shares.
(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 Preferred Shares
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 Section 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-thousandths 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-thousandths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to
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<PAGE> 20
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 Preferred Shares 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-thousandths 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 ten (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 Rights
on such record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one one-thousandth of a share and the number of
shares that 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-thousandth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action that 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
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<PAGE> 21
after such record date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or other
securities that 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 subsection
(b) of this Section 11, hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it shall not, except as permitted by Section 23, Section 24
or Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) 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 Preferred Shares purchasable upon proper exercise of each Right shall
be determined by multiplying the number of shares 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 that each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(o) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected. If an event occurs that would require an
adjustment under Section 11(a)(ii) and this Section 11(o), the adjustments
provided for in this Section 11(o) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).
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<PAGE> 22
(p) The failure by the Board of Directors to take steps to
declare a Person to be an Adverse Person following such Person (alone or
together with the Affiliates and Associates of such Person) becoming the
Beneficial Owner of 10% or more of the Common Shares then outstanding shall not
limit the Board of Directors' right at any time in the future to declare such
Person to be an Adverse Person.
SECTION 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the 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 (or, if prior to the Distribution
Date, to each holder of a certificate representing Common Shares) in accordance
with Section 25. The Rights Agent shall be fully protected in relying on such
certificate and on any adjustment contained therein and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event that, directly or indirectly, (a) the
Company shall consolidate with, or merge with and into, any other Person, (b)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(n) hereof) 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 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 Person (other than the Company or one or
more of its wholly-owned Subsidiaries in one or more transactions each of which
complies with Section 11(n) hereof), then, and in each such case, proper
provision shall be made so that (i) each holder of a Right shall thereafter have
the right to receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable Common
Shares of such other Person (including the Company as successor thereto or as
the surviving corporation), not subject to any liens, encumbrances, rights of
first refusal or any other adverse claims, as shall be equal to the result
obtained by (x) multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the current per share market price of the
Common Shares of such other Person (determined pursuant to Section 11(d)) on the
date of consummation of such consolidation, merger, sale or transfer; (ii) the
issuer of such 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
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<PAGE> 23
number of its Common Shares to permit the exercise of all outstanding Rights) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its Common Shares thereafter deliverable upon the exercise of
the Rights. The Company shall not enter into any transaction of the kind listed
in this Section 13 if at the time of or immediately after such transaction there
are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements that, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or prior to, simultaneously with or
immediately after such consolidation, merger or sale, the shareholders of the
Person who constitutes, or would constitute, the "other Person" for purposes of
this Section 13 shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer unless the other
Person shall have a sufficient number of authorized Common Shares which have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior thereto the Company
and such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section 13 and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in the first paragraph of this
Section 13, the other Person will
(i) prepare and file a registration statement under
the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the other Person and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If, in the case of a transaction
referred to in clause (c) of the first sentence of this Section 13, the Person
or Persons to whom assets or earning power are sold or otherwise transferred are
individuals, then the Company shall require as a condition to such sale or
transfer that such Person or Persons pay to each holder of a Right Certificate,
upon the surrender to the Rights Agent of such Rights Certificate and in
exchange therefor (without requiring any payment by such holder) cash in the
amount obtained by multiplying (x) the then current Purchase Price by (y) the
number of one one-thousandths of a Preferred Share for which a Right is
exercisable.
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<PAGE> 24
SECTION 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(o)
hereof, or to distribute Right Certificates that evidence 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 New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices 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 that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to issue
certificates that evidence fractions of Preferred Shares (other than fractions
that are integral multiples of one one-thousandth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-thousandth of a
Preferred Share may, at the election of the Company, be evidenced 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-thousandth 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
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
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
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<PAGE> 25
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of Common Shares upon the
exercise of the Rights or to distribute certificates that evidence fractional
Common Shares. In lieu of fractional Common Shares, the Company shall pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Common Share. For purposes of this Section 14(c), the
current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares (except as provided by this Section 14) upon exercise of a Right.
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 evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(e) hereof, 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
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<PAGE> 26
thereof and of the Rights evidenced 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 best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company that may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
SECTION 18. Concerning the Rights Agent. 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 for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement 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,
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<PAGE> 27
or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper person or
persons, or otherwise upon the advice of its counsel as set forth in Section 20.
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 business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of 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 all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity or existence of any
Acquiring Person or Adverse Person and the determination of "current per share
market price") be proved or established by the Company prior to taking or
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<PAGE> 28
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
chairman of the board, the president, any vice president, the secretary, an
assistant secretary or the treasurer of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) 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 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) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23, or 24 or the ascertaining of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced 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 and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the chairman of the board, the president, 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 to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions.
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<PAGE> 29
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not 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, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
SECTION 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and 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 and
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 holder of record of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation or trust company organized and doing business under the
laws of the United States or any state of the United States so long as such
corporation is authorized to do business as a banking institution, is in good
standing, is authorized under such laws to exercise corporate trust powers, and
is subject to supervision or examination by federal or state authority. 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
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<PAGE> 30
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 with the predecessor Rights Agent and
each transfer agent of the Common Shares and Preferred Shares, and mail a notice
thereof in writing to the holders of record 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 option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price 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. In
addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
to the Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments shall otherwise have been made in lieu of the issuance thereof.
SECTION 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the occurrence of a Triggering Event, by the vote of not
less than a majority of the members of the Board of Directors, 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"); provided, however, that if
such redemption occurs on or after the date of a change (resulting from a proxy
or consent solicitation) in a majority of the directors in office at the
commencement of such solicitation, and any Person who is or was a participant in
such solicitation has stated (or, if upon the commencement of such solicitation,
a majority of the Board of Directors of the Company has determined in good
faith) that such Person (or any of its Affiliates or Associates) has taken or
intends to take, or may consider taking, any action that would result in such
Person becoming an Acquiring Person or an Adverse Person or that would cause the
occurrence of a Triggering Event (the existence of the circumstances described
in this proviso being referred to herein as an "Adverse Change of Control"),
then the Rights may be so redeemed only if there are Continuing Directors (as
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<PAGE> 31
hereinafter defined) in office and such redemption is authorized by a majority
of such Continuing Directors. Notwithstanding the foregoing, in the event
payment of the Redemption Price to a holder of Rights would result in the
payment of an amount not equal to $.01 or an integral multiple of $.01, the
amount to be paid shall be rounded upward to the next $.01. "Continuing
Director" shall mean (i) any member of the Board of Directors of the Company
who, while such person is a member of the Board, is not an Acquiring Person or
Adverse Person, or an Affiliate or Associate of an Acquiring Person or Adverse
Person, or a representative of an Acquiring Person or Adverse Person or of any
such Affiliate or Associate, and was a member of the Board prior to the Record
Date, or (ii) any Person who subsequently becomes a member of the Board who,
while such Person is a member of the Board, is not an Acquiring Person or
Adverse Person, or an Affiliate or Associate of an Acquiring Person or Adverse
Person, or a representative of an Acquiring Person or Adverse Person or of any
such Affiliate or Associate, if such Person's nomination for election or
election to the Board is recommended or approved by a majority of the Continuing
Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. Any notice that 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 and 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,
at any time after any Person becomes an Acquiring Person or an Adverse Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares, each Right being exchangeable for one-half
of that number of Common Shares as would then be issuable upon the exercise of
such Right pursuant to Section 11(a) (such number of Common Shares issuable in
exchange for one Right being referred to herein as the "Exchange Shares").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than (i) the Company,
(ii) any wholly-owned Subsidiary of the Company, (iii) any employee benefit plan
of the Company or any Subsidiary, or (iv) any entity holding Common Shares for
or pursuant to the terms of any such plan), together with all Affiliates and
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<PAGE> 32
Associates of 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 subsection (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 the Exchange Shares. 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 that 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 any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares or equivalent preference shares,
as provided in Section 11(b) hereof, for Common Shares exchangeable for Rights,
at the initial rate of one one-thousandth of a Preferred Share or equivalent
preference share for each Common Share, as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction with respect to the Common
Shares after the date hereof.
(d) In the event that there shall not be sufficient Common
Shares or Preferred 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 or Preferred Shares for issuance upon exchange of the
Rights or shall take such other action specified in Section 11(a)(iii) hereof.
(e) 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 subsection (e), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second and third sentences 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. In case the Company
shall propose (a) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make
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<PAGE> 33
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend) or (b) 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, or (c) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(n) hereof), 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 (other than
the Company and/or any of its Subsidiaries in one or more transactions, each of
which complies with Section 11(n) hereof), or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action that 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 (a) or (b) above at least 20 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 20 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.
In case a Triggering Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate, in accordance with Section 26, a notice of the occurrence
of such event, which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) or Section 13.
The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote on any such action.
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:
Sea Pines Associates, Inc.
32 Greenwood Drive
Post Office Box 7000
Hilton Head Island, SC 29938
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<PAGE> 34
Attention: Michael E. Lawrence
President and Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
EquiServe Trust Company, N.A.
c/o EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares) 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 earliest
of (i) the Distribution Date, (ii) the occurrence of a Triggering Event and
(iii) an Adverse Change of Control, and subject to the last sentence of this
Section 27, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement (including
supplements or amendments that may be deemed to affect the interests of the
holders of Right Certificates adversely) without the approval of any holders of
certificates representing Common Shares and Rights. From and after the earliest
of (i) the Distribution Date, (ii) the occurrence of a Triggering Event and
(iii) an Adverse Change of Control, and subject to the last sentence of this
Section 27, the Company and the Rights Agent shall, if the Company so directs
(upon approval of a majority of the Continuing Directors then in office),
supplement or amend this Agreement without the approval of any holders of Rights
Certificates (x) in any manner that will not adversely affect the interests of
the holders of Rights Certificates (other than an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Acquiring Person or Adverse
Person or (y) in order to cure any ambiguity or to correct or supplement any
provision contained herein which, in the good faith determination of a majority
of the Continuing Directors then in office, may be defective or inconsistent
with the other provisions contained herein). Upon the delivery of a certificate
from an officer of the Company that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made that
decreases the Redemption Price, accelerates the Final Expiration Date, increases
the Purchase Price, or
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<PAGE> 35
decreases the number of one one-thousandths of a Preferred Share for which a
Right is exercisable.
SECTION 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares of which any person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company (with,
where specifically provided for herein, the concurrence of the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the Continuing Directors)
or to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Agreement or as to whether an Acquiring Person or Adverse Person exists or as to
whether a Triggering Event has occurred). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence of the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties and
(y) not subject the Board or the Continuing Directors to any liability to the
holders of the Rights.
SECTION 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person 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
registered holders of the Common Shares).
SECTION 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith
- 32 -
<PAGE> 36
judgment that severing the invalid language of this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the tenth day following the date of such determination by
the Board of Directors.
SECTION 32. 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 South Carolina 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 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
- 33 -
<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Sea Pines Associates, Inc.
By: Michael E. Lawrence
-------------------------------------
Michael E. Lawrence
President and Chief Executive Officer
Attest:
By: Steven P. Birdwell EquiServe Trust Company, N.A.
------------------
By: James J. Robinson
-------------------------------------
James J. Robinson
Vice President
Attest:
By: Jeff Seiders
---------------
Jeff Seiders
Account Manager
- 34 -
<PAGE> 38
Exhibit A
AMENDMENT TO THE ARTICLES OF INCORPORATION
OF SEA PINES ASSOCIATES, INC.
--------------------------
The Articles of Incorporation of Sea Pines Associates, Inc.
are amended as follows: Paragraph 4(a) of the Articles of Incorporation is
amended by adding thereto subparagraph (3) as set forth below:
(3) Series B Junior Cumulative Preferred Shares.
(i) Designation and Amount. The shares of such series
shall be designated as "Series B Junior Cumulative Preferred Shares" and the
number of shares constituting such series shall be 3,000.
(ii) Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Shares (including without limitation,
holders of shares of Series A Cumulative Preferred Shares) ranking prior and
superior to the shares of Series B Junior Cumulative Preferred Shares with
respect to dividends, the holders of shares of Series B Junior Cumulative
Preferred Shares, in preference to the holders of Voting Common Shares, without
par value (the "Common Shares"), of the Corporation, and of any other junior
stock (including, without limitation, Non Voting Common Shares, without par
value, and Special Common Shares, without par value), shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on August 23,
November 23, February 23 and May 23 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 B Junior Cumulative Preferred Shares, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $0.25 or (b) the
Antidilution Number (as hereafter defined) times the aggregate per share amount
of all cash dividends and the Antidilution Number times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in Common Shares or a subdivision of the outstanding
Common Shares (by reclassification or otherwise) declared on the Common Shares
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 B Junior Cumulative Preferred
Shares. The "Antidilution Number" shall initially be 1,000. In the event the
Corporation shall at any time after August 23, 1993 (the "Rights Declaration
Date") (i) declare any dividend on Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, or (iii) combine the outstanding Common
Shares into a smaller number of shares, then in each such case the Antidilution
Number in effect immediately prior to such event shall be adjusted by
multiplying the Antidilution Number by a fraction the numerator of which is the
number of Common Shares
<PAGE> 39
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series B Junior Cumulative Preferred Shares as provided in subparagraph
(3)(ii)(A) of this Paragraph 4(a) immediately after it declares a dividend or
distribution on the Common Shares (other than a dividend payable in Common
Shares); provided that, in the event no dividend or distribution shall have been
declared on the Common Shares during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $0.25 per share on the Series B Junior Cumulative Preferred Shares 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 B Junior Cumulative Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
B Junior Cumulative Preferred Shares, unless the issue date of such shares is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Junior Cumulative Preferred
Shares 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
B Junior Cumulative Preferred Shares 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 B Junior Cumulative Preferred Shares entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.
(iii) Voting Rights. The holders of shares of Series B Junior
Cumulative Preferred Shares shall have the following voting rights:
(A) Each share of Series B Junior Cumulative Preferred Shares
shall entitle the holder thereof to the number of votes equal to the
Antidilution Number on all matters submitted to a vote of the shareholders of
the Corporation.
(B) Except as otherwise provided herein, by law or in these
Articles of Incorporation, the holders of shares of Series B Junior Cumulative
Preferred Shares and the holders of Common Shares shall vote together as one
class on all matters submitted to a vote of shareholders of the Corporation.
(C) (v) If at any time dividends on any Series B Junior
Cumulative Preferred Shares shall be in arrears in an amount equal to six (6)
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
A-2
<PAGE> 40
periods and for the current quarterly dividend period on all shares of Series B
Junior Cumulative Preferred Shares then outstanding shall have been declared and
paid or set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series B Junior Cumulative Preferred
Shares) with dividends in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, irrespective of series, shall have the
right to elect two (2) Directors.
(w) During any default period, such voting right of
the holders of Series B Junior Cumulative Preferred Shares may be exercised
initially at a special meeting called pursuant to subparagraph (3)(iii)(C)(x) of
this Paragraph 4(a) or at any other annual or special meeting of shareholders,
and thereafter at annual meetings of shareholders, provided that such voting
right to increase, in certain cases, the authorized number of Directors shall
not be exercised unless the holders of ten percent (10%) in number of shares of
Series B Junior Cumulative Preferred Shares outstanding shall be present in
person or by proxy. The absence of a quorum of the holders of Common Shares
shall not affect the exercise by the holders of Series B Cumulative Preferred
Shares of such voting right. At any meeting at which the holders of Series B
Junior Cumulative Preferred Shares shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a class,
to elect Directors to fill such vacancies, if any, in the Board of Directors as
may then exist up to two (2) Directors or, if such right is exercised at an
annual meeting, to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Preferred Shares shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Series B Junior Cumulative
Preferred Shares shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Series B Junior Cumulative Preferred Shares as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari passu with the
Series B Junior Cumulative Preferred Shares.
(x) Unless the holders of Series B Junior Cumulative
Preferred Shares shall, during an existing default period, have previously
exercised their right to elect Directors, the Board of Directors may order, or
any shareholder or shareholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Series B Junior Cumulative
Preferred Shares outstanding, may request, the calling of a special meeting of
the holders of Series B Junior Cumulative Preferred Shares, which meeting shall
thereupon be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Series B Junior Cumulative Preferred Shares are entitled to vote pursuant to
this subparagraph (3)(iii)(C)(x) shall be given to each holder of record of
Series B Junior Cumulative Preferred Shares by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any shareholder or shareholders owning in the aggregate not
less than
A-3
<PAGE> 41
ten percent (10%) of the total number of shares of Series B Junior Cumulative
Preferred Shares outstanding. Notwithstanding the provisions of this paragraph
(3)(iii)(C)(x), no such special meeting shall be called during the period within
60 days immediately preceding the date fixed for the next annual meeting of the
shareholders.
(y) In any default period, the holders of Common
Shares, and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until the holders
of Series B Junior Cumulative Preferred Shares shall have exercised their right
to elect two (2) Directors voting as a class, after the exercise of which right
(i) the Directors so elected by the holders of Series B Junior Cumulative
Preferred Shares shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (ii)
any vacancy in the Board of Directors may (except as provided in subparagraph
(3)(iii)(C)(w) of this Paragraph 4(a)) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of a particular class of
stock which elected the Director whose office shall have become vacant.
References in this subparagraph (3)(iii)(C) to Directors elected by the holders
of a particular class of stock shall include Directors elected by such Directors
to fill vacancies provided in clause (i) of the foregoing sentence.
(z) Immediately upon the expiration of a default
period, (i) the right of the holders of Series B Junior Cumulative Preferred
Shares as a class to elect Directors shall cease, (ii) the term of any Directors
elected by the holders of Series B Junior Cumulative Preferred Shares as a class
shall terminate, and (iii) the number of Directors shall be such number as may
be provided for in these Articles of Incorporation or in the by-laws
irrespective of any increase made pursuant to the provisions of subparagraph
(3)(iii)(C)(w) of this Paragraph 4(a) (such number being subject, however, to
change thereafter in any manner provided by law or in the Articles of
Incorporation or by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (ii) and (iii) in the preceding sentence may be filled
by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series B Junior
Cumulative Preferred Shares 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 Shares as set forth herein) for taking any corporate
action.
(iv) Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Cumulative Preferred Shares as
provided in subparagraph (3)(ii) of this Paragraph 4(a) are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Junior Cumulative Preferred Shares
outstanding shall have been paid in full, the Corporation shall not
A-4
<PAGE> 42
(w) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Junior Cumulative Preferred Shares;
(x) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Junior Cumulative Preferred
Shares, except dividends paid ratably on the Series B Junior
Cumulative Preferred Shares 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;
(y) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series B Junior Cumulative Preferred Shares,
provided that the corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity 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 B Junior Cumulative
Preferred Shares; or
(z) purchase or otherwise acquire for consideration
any shares of Series B Junior Cumulative Preferred Shares, or
any shares of stock ranking on a parity with the Series B
Junior Cumulative Preferred Shares, 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 subparagraph
(3)(iv)(A) of this Paragraph 4(a), purchase or otherwise acquire such shares at
such time and in such manner.
(v) Reacquired Shares. Any shares of Series B Junior
Cumulative Preferred Shares 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 Shares and may be reissued as part
of a new series of Preferred Shares to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
A-5
<PAGE> 43
(vi) Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Cumulative Preferred Shares
unless, prior thereto, the holders of Series B Junior Cumulative Preferred
Shares shall have received $100 per share, plus an amount equal to accrued and
unpaid dividends and distribution thereon, whether or not declared, to the date
of such payment (the "Series B Liquidation Preference"). Following the payment
of the full amount of the Series B Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series B Junior
Cumulative Preferred Shares unless, prior thereto, the holders of Common Shares
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing the Series B Liquidation Preference by the
Antidilution Number. Following the payment of the full amount of the Series B
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series B Junior Cumulative Preferred Shares and Common Shares,
respectively, holders of Series B Junior Cumulative Preferred Shares and holders
of Common Shares shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Antidilution Number to
one with respect to such Series B Junior Cumulative Preferred Shares and Common
Shares, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series of preference
stock, if any, which rank on a parity with the Series B Junior Cumulative
Preferred Shares, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Shares.
(vii) Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the Common Shares are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series B Junior Cumulative Preferred Shares shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to the Antidilution Number 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 Common Share is
changed or exchanged.
(viii) No Redemption. The Series B Junior Cumulative Preferred
Shares shall not be redeemable.
A-6
<PAGE> 44
(ix) Ranking. The Series B Junior Cumulative Preferred Shares
shall rank junior to all other series of the Corporation's Preferred Shares as
to the payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.
(x) Fractional Shares. Series B Junior Cumulative Preferred
Shares may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders of fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series B Junior Cumulative Preferred Shares.
A-7
<PAGE> 45
Exhibit B
[Form of Right Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER AUGUST 23, 2003 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN
ACQUIRING PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON. THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 11(a)(ii) OF
THE RIGHTS AGREEMENT.]*
RIGHT CERTIFICATE
SEA PINES ASSOCIATES, 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 First Amended and Restated Rights Agreement dated as of August
23, 1993 and amended and restated as of June ___, 1999 (the "Rights Agreement")
between Sea Pines Associates, Inc., a South Carolina corporation (the
"Company"), and Equiserve Trust Company, N.A. (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (South Carolina time) on
August 23, 2003 at the office of the Rights Agent designated for such purpose,
or at the office of its successors as Rights Agent, one one-thousandth of a
fully paid and nonassessable share of Series B Junior Cumulative Preferred
Shares, without par value and liquidation preference $100 per share (the
"Preferred Shares"), of the Company, at a purchase price of $50 per one
one-thousandth 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 portion of the legend shall be modified to apply to an Acquiring
Person or an Adverse Person as applicable, and shall replace the
preceding sentence.
<PAGE> 46
The number of Rights evidenced by this Right Certificate (and
the number of Preferred Shares which may be purchased upon exercise thereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of August 23, 1993 based on the Preferred Shares as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and
the number of Preferred Shares or other securities that may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
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 office of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing 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
evidenced by this Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $.01 per Right.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractional shares
that are integral multiples of one one-thousandth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company that may at any
time be issuable on the exercise hereof, nor shall
B-2
<PAGE> 47
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been 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.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of
Sea Pines Associates, Inc.
By: _________________________
Attest:
By: __________________________________
Countersigned:
Equiserve Trust Company, N.A.
By: ___________________________________
B-3
<PAGE> 48
[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 Certificates.)
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:_______________, 19__
_______________________________
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.
________________________________________________________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Acquiring
Person or Adverse Person (as such terms are defined in the Rights Agreement);
and
B-4
<PAGE> 49
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Acquiring Person or
Adverse Person.
Dated: ________________________, 19___
_______________________________
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.
_____________________________________________________________________
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE> 50
================================================================================
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: ______________________
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 (or such
other securities of the Company or of any other person which may be issuable
upon exercise of the Rights) and requests that certificates for such securities
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 evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: ______________________, 19
_______________________________
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.
B-6
<PAGE> 51
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) Rights evidenced by this Rights Certificate are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Acquiring
Person or Adverse Person (as such terms are defined in the Rights Agreement);
and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Acquiring Person or
Adverse Person.
Dated:_____________________, 19__
_______________________________
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.
- --------------------------------------------------------------------------------
NOTICE
The signatures in the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
================================================================================
WARNING
In the event the Certificate set forth above in the Assignment
and Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person, an Adverse Person or an Affiliate or Associate of such Acquiring Person
or Adverse Person (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
B-7
<PAGE> 52
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
The Board of Directors of Sea Pines Associates, Inc. (the
"Company") has declared a dividend distribution of one Right (the "Rights") for
each outstanding Voting Common Share ("Common Shares") of the Company, without
par value, to shareholders of record at the close of business on September 2,
1993 (the "Record Date"). Each Right entitles the registered holder to purchase
from the Company a unit consisting of one one-thousandth of a share (a "Unit")
of Series B Junior Cumulative Preferred Shares, without par value and
liquidation preference $100 per share (the "Preferred Shares"), at a purchase
price (the "Purchase Price") of $50 per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and the Rights Agent. Capitalized terms
used but not otherwise defined herein shall have the meaning given such terms in
the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding, and no separate Rights Certificates
will be distributed. The Rights will become exercisable and will separate from
the Common Shares upon the earlier of (i) a public announcement that (A) a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the outstanding Common Shares or
(B) a person or group of affiliated or associated persons has become an Adverse
Person (as hereinafter defined) (the earlier of (A) or (B) being the "Shares
Acquisition Date") or (ii) ten business days after the commencement of, or first
public announcement of an intention to commence, a tender offer or exchange
offer that would result in a person or group beneficially owning 20% or more of
the outstanding Common Shares (the earliest of such dates being called the
"Distribution Date").
A person shall be an "Adverse Person" if all of the following
shall occur: (1) the Board of Directors shall designate a specific limitation on
the percentage of Common Shares then outstanding that a specified Person may
beneficially own, which percentage (the "Ownership Limitation") may be less
than, equal to, or more than the percentage of then outstanding Common Shares
owned by such Person, but shall in no event be less than 10% of the Common
Shares then outstanding; and (2) at least a majority of the Board of Directors
who are not officers of the Company and who are not representatives, nominees,
Affiliates or Associates of such Person, after reasonable inquiry and
investigation, including consultation with such persons as such directors shall
deem appropriate, shall (x) conclude that beneficial ownership by such Person of
a percentage of Common Shares exceeding the Ownership Limitation is (or would
likely be) intended, or is (or would likely be) used to cause the Company to
repurchase the Common Shares beneficially owned by such Person or to cause
pressure on the Company to take action or enter into a transaction or series of
transactions (including a sale of the Company or transactions leading to a
change in control of the Company) under circumstances where the Board of
Directors determines that the best long-term interests of the Company and its
shareholders would not be served by effecting such repurchase, taking such
action or entering into such transactions or series of transactions at that time
or (y) determine that beneficial ownership by such Person of a percentage of
Common Shares exceeding the Ownership Limitation is causing or is reasonably
likely to cause a material adverse impact on the business or prospects of the
Company; and (3)
<PAGE> 53
such Person, together with its Affiliates and Associates, shall (before or after
the occurrence of (1) and (2) above) beneficially own a percentage of Common
Shares that exceeds the Ownership Limitation.
Until the Distribution Date, (i) the Rights will be evidenced
by the Common Share certificates and will be transferred with and only with such
Common Share certificates, (ii) new Common Share certificates issued after the
Record Date will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on August 23, 2003, unless earlier redeemed
or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only Common Shares
issued prior to the Distribution Date will be issued with Rights. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
In the event that a person becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive, upon exercise,
Common Shares (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. In the event that a person becomes an Adverse Person, each holder of a
Right will have the right to receive, upon exercise, Common Shares having a
value equal to two times the exercise price of the Right multiplied by a
fraction the numerator of which is 20% and the denominator of which is the
Ownership Limitation applicable to such Adverse Person. Notwithstanding any of
the foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or any
Adverse Person will be null and void.
In the event that (i) the Company is acquired in a merger or
other business combination transaction in which the Company is not the surviving
corporation or in which the Company is the surviving corporation but its stock
is changed or exchanged or (ii) 50% or more of the Company's assets or earning
power is sold or transferred, proper provision will be made so that each holder
of a Right shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and the preceding
paragraph are referred to as the "Triggering Events."
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<PAGE> 54
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
customary adjustments from time to time to prevent dilution in the event of
certain changes in the shares of the Company. With Certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. The Company may determine not to
issue fractional Rights or shares and, in lieu thereof, an adjustment in cash
will be made based on the market value of the Rights or shares on the last
trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, at any time before the occurrence of
a Triggering Event; provided, however, that if there has been a change in a
majority of the Board of Directors of the Company as a result of a proxy or
consent solicitation and a person who was a participant in such solicitation has
stated that he or it has taken or intends to take or may take actions that would
cause the occurrence of a Triggering Event (an "Adverse Change of Control"),
then the redemption of the Rights will require the approval of a majority of the
Continuing Directors. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the redemption price.
"Continuing Director" means (i) any member of the Board of
Directors of the Company, while such person is a member of the Board, who is not
an Acquiring Person or an Adverse Person, or an Affiliate or Associate of an
Acquiring Person or an Adverse Person, or a representative of an Acquiring
Person or an Adverse Person or of any such Affiliate or Associate, and was a
member of the Board prior to August 23, 1993, or (ii) any Person who
subsequently becomes a member of the Board, while such Person is a member of the
Board, who is not an Acquiring Person or an Adverse Person, or an Affiliate or
Associate of an Acquiring Person or an Adverse Person, or a representative of an
Acquiring Person or an Adverse Person or of any such Affiliate or Associate, if
such Person's nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
At any time after any Person becomes an Acquiring Person or an
Adverse Person and prior to the acquisition by such Person of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the then outstanding and exercisable Rights (other than Rights owned by such
Person, which will have become void), in whole or in part, for Common Shares,
each Right being exchangeable for one-half of the number of Common Shares as
would then be issuable upon exercise of such Right.
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.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the
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<PAGE> 55
Company prior to the first to occur of (i) the Distribution Date, (ii) a
Triggering Event and (iii) an Adverse Change of Control. After the first to
occur of such events, the provisions of the Rights Agreement may be amended with
the approval of a majority of the Continuing Directors in order (x) to make
changes that do not adversely affect the interests of holders of Rights (other
than the interests of any Acquiring Person or any Adverse Person), or (y) to
cure any ambiguity or defect contained in the Rights Agreement.
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. Once the Rights are issued, a copy of the Rights Agreement will be
available to registered holders of the Rights upon written request free of
charge from the Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
C-4
