RIGHTS AGREEMENT
DATED AS OF
JULY 20, 2000
BETWEEN
CELADON GROUP, INC.
AND
FLEET NATIONAL BANK
AS RIGHTS AGENT
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INDEX
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................5
Section 3. Issue of Right Certificates.......................................5
Section 4. Form of Right Certificates........................................7
Section 5. Countersignature and Registration.................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates......................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.........................................................9
Section 8. Cancellation and Destruction of Right Certificates...............10
Section 9. Reservation and Availability of Capital Stock....................10
Section 10. Preferred Shares Record Date.....................................11
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights........................................................12
Section 12. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power....................................................20
Section 13. Certificate of Adjusted Purchase Price or Number of Shares.......22
Section 14. Fractional Rights and Fractional Shares..........................22
Section 15. Rights of Action.................................................24
Section 16. Agreement of Right Holders.......................................24
Section 17. Right Holder and Right Certificate Holder Not Deemed
a Stockholder....................................................25
Section 18. Concerning the Rights Agent. ....................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent........26
Section 20. Duties of Rights Agent...........................................26
(i)
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Section 21. Change of Rights Agent...........................................28
Section 22. Issuance of New Right Certificates...............................29
Section 23. Redemption.......................................................29
Section 24. Exchange.........................................................30
Section 25. Notice of Certain Events.........................................31
Section 26. Notices..........................................................32
Section 27. Supplements and Amendments.......................................32
Section 28. Successors.......................................................33
Section 29. Determinations and Actions by the Board of Directors.............33
Section 30. Benefits of this Agreement. .....................................33
Section 31. Severability.....................................................33
Section 32. Governing Law....................................................34
Section 33. Counterparts.....................................................34
Section 34. Descriptive Headings.............................................34
Exhibit A Form of Certificate of Designation of Series A
Junior Participating Preferred Stock............................A-1
Exhibit B Form of Rights Certificate......................................B-1
Exhibit C Summary of Rights to Purchase Preferred Stock...................C-1
(ii)
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 20, 2000 (the "AGREEMENT"), between
Celadon Group, Inc., a Delaware corporation (the "COMPANY"), and Fleet National
Bank, a national banking association (the "RIGHTS AGENT").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one preferred share purchase right (a "RIGHT") for each
Common Share (as hereinafter defined) outstanding as of the close of business
July 20, 2000 (the "RECORD DATE"), and authorized and directed the issuance of
one Right in respect of each such share of Common Shares of the Company that
shall become outstanding between the Record Date and the earlier of the
Distribution Date and the Expiration Date (as such terms are hereinafter
defined); each Right representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), or such different amount and/or kind
of securities as shall be hereinafter provided.
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 which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the then outstanding Common Shares or was such a Beneficial Owner
at any time after the Close of Business on the date hereof, whether or not such
Person continues to be the Beneficial Owner of 15% or more of the then
outstanding Common Shares but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any Benefit Plan or (iv) any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any Benefit Plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person":
(i) as a result of the acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding, increases the
proportional number of shares beneficially owned by such Person together with
all Affiliates and Associates of such Person; PROVIDED, HOWEVER, that if (A) a
Person would be or become an Acquiring Person (but for the operation of this
subparagraph (i)) as a result of the acquisition of Common Shares by the
Company, and (B) after such share acquisition by the Company, such Person, or an
Affiliate or Associate of such Person, becomes the Beneficial Owner of any
additional Common Shares, then such Person shall be deemed an Acquiring Person;
or
(ii) if the Board of Directors determines in good faith that a Person
who would otherwise be an "Acquiring Person" has become such inadvertently, and
such Person
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(A) does not attempt to exercise any control over the business affairs or
management of the Company, including by means of a proxy solicitation, and (B)
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an "Acquiring Person," then such Person shall not
be deemed an "Acquiring Person" for any purposes of this Agreement.
(b) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii).
(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 Exchange Act, as in effect on the date hereof.
(d) (i) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to "BENEFICIALLY OWN," any securities:
(A) which such Person or any of such Person's Affiliates or
Associates Beneficially Owns, directly or indirectly;
(B) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (1) the right to acquire (whether such
right is exercisable immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any agreement, arrangement or
understanding (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, (I) securities tendered pursuant to a tender
offer or exchange offer made pursuant to and in accordance with the applicable
rules and regulations promulgated under the Exchange Act 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 and (II) securities subject to
an option granted by the Company to such Person in connection with the execution
of an agreement to acquire or merge with the Company; or (2) the right to vote
pursuant to any agreement, arrangement or understanding (whether or not in
writing); PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (x) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations under the Exchange
Act and (y) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(C) which are Beneficially Owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which the Person whose
beneficial ownership is being determined (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether or not in
writing), other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
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of securities, for the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to Section 1(d)(i)(B)) or
disposing of any voting securities of the Company.
(ii) Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "THEN OUTSTANDING", when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(e) "BENEFIT PLAN" shall mean any employee benefit plan of the Company or
of any Subsidiaries of the Company.
(f) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company.
(g) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday,
Federal holiday or a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close.
(h) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(i) "COMMON SHARES," when used with respect to the Company, shall mean the
common stock, par value $.033 per share of the Company or, in the event of a
subdivision, combination, or consolidation with respect to the Common Shares,
the Common Shares resulting from such subdivision, combination or consolidation.
"Common Shares," when used with reference to any Person other than the Company,
shall mean the capital stock (or equity interests) with the greatest voting
power of such other Person, or if such other Person is a Subsidiary of another
Person, the Person or Persons that ultimately control such first-mentioned
Person.
(j) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in Section
11(a) (iii).
(k) "CURRENT MARKET PRICE" shall have the meaning set forth in Section
11(d).
(l) "CURRENT VALUE" shall have the meaning set forth in Section 11(a)(iii).
(m) "DISTRIBUTION DATE" shall have the meaning set forth in Section 3.
(n) "EQUIVALENT PREFERRED STOCK" shall have the meaning set forth in
Section 11(b).
(o) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
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(p) "EXCHANGE RATIO" shall have the meaning set forth in Section 24(a).
(q) "EXPIRATION DATE" shall mean the earlier of the Final Expiration Date
or the Redemption Date.
(r) "FINAL EXPIRATION DATE" shall mean July 20, 2010.
(s) "PERSON" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as amended, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
(t) "PREFERRED SHARES" shall mean shares of Series A Junior Participating
Preferred Stock, par value $1.00 per share, of the Company, having the rights,
preferences and limitations set forth in the form of Certificate of Designation
attached to this Agreement as EXHIBIT A.
(u) "PRINCIPAL PARTY" shall have the meaning set forth in Section 12(b).
(v) "PURCHASE PRICE" shall have the meaning set forth in Section 7(b).
(w) "RIGHT CERTIFICATES" shall have the meaning set forth in Section 3(a).
(x) "REDEMPTION DATE" shall have the meaning set forth in Section 23.
(y) "REDEMPTION PRICE" shall have the meaning set forth in Section 23.
(z) "SECTION 11(A)(II) EVENT" shall mean any event described in Section
11(a)(ii).
(aa) "SECTION 12(A) EVENT" shall mean any event described in clause (x),
(y) or (z) of Section 12(a).
(bb) "SECURITIES ACT" means the Securities Act of 1933, as amended and as
in effect on the date of this Agreement.
(cc) "SPREAD" shall have the meaning set forth in Section 11(a)(iii).
(dd) "STOCK ACQUISITION DATE" shall mean the earlier of the date of (i) the
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such and (ii) the
public disclosure of facts by the Company or an Acquiring Person indicating that
an Acquiring Person has become such.
(ee) "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.
(ff) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii).
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(gg) "SUMMARY OF RIGHTS" shall mean the Summary of Rights to Purchase
Preferred Stock in substantially the form of EXHIBIT C.
(hh) "TRADING DAY" shall have the meaning set forth in Section 11(d)(i).
(ii) "TRANSFER" shall mean any sale, assignment, transfer or other
disposition.
(jj) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or any
Section 12(a) Event.
(kk) "TRADING DAY" shall have the meaning set forth in Section 12(a).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company 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.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition Date
or (ii) the Close of Business on the tenth Business Day, or such later date as
may be determined by resolution of the Board of Directors, after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
Benefit Plan) of, or the first public announcement of an intention of any Person
(other than the Persons referred to in the preceding parenthetical) to make, a
tender or exchange offer the consummation of which would result in any Person
becoming an Acquiring Person (including, in the case of both (i) and (ii), any
such date which 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 Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only simultaneously
and together with the transfer of the underlying Common Shares, PROVIDED,
HOWEVER, that if a tender or exchange offer is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a
result of such tender or exchange offer. Until the Distribution Date, the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date shall also constitute the transfer of the Rights associated with
such Common Shares. As soon as is practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send), by first-class, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address
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of such holder shown on the records of the Company, one or more right
certificates, in substantially the form attached hereto as EXHIBIT B (the "RIGHT
CERTIFICATES"), evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of 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 associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares evidenced thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this Section 3(c)) after the Record Date but prior to the Expiration Date shall
be deemed also to be certificates for Rights and shall bear the following
legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Celadon
Group, Inc. and Fleet National Bank dated as of July 20, 2000, as the
same may be amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of Celadon
Group, Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Celadon Group, Inc.
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and certain related Persons, whether currently held by or
on behalf of such Person or by any subsequent holder, may become null
and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be
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evidenced by such certificates alone and registered owners of Common Shares
shall also be the registered holders of the associated Rights, and the surrender
for transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled 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.
(a) The Right Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof ) shall be substantially
in the form set forth as EXHIBIT B to this Agreement and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22, the Right
Certificates, whenever distributed, shall be dated as of the Record Date and
shall entitle the holders thereof to purchase such number of one- hundredths of
a Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein, but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
that represents Rights which are null and void pursuant to Section 11(a)(ii) of
this Agreement 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 (to the extent feasible)
the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby are null and void.
The provisions of Section 11(a)(ii) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any such Right
Certificate.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates shall
be executed on behalf of the Company by its Chairman, President or any Vice
President, either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either
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manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature,
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company whose manual or facsimile signature is affixed to the
Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company.
Any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office or offices designated as the appropriate place for surrender
of Right Certificates upon exercise or transfer, 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 the face of each of the Right Certificates, the
date of each of the Right Certificates and the Right Certificate number.
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 prior to the Expiration Date, any Right Certificate or
Right Certificates (other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) or that have been exchanged pursuant
to Section 24) may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share (or following
a Triggering Event, Common Shares, other securities, cash or other assets, as
the case may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
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 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 Certificates 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 cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
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Upon (i) receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them (a) of the loss, theft, destruction or mutilation of a
Right Certificate and, (b) in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, (ii) at the request of the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and (iii) in case of mutilation of a Right Certificate,
surrender to the Rights Agent and cancellation of such Right Certificate, the
Company will issue and deliver a new Right Certificate of like tenor to the
Rights Agent for 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) Subject to Section 11(a)(ii) hereof, 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
and the certificate on the reverse side thereof duly executed to the Rights
Agent at the office or offices of the Rights Agent designated for each purpose,
together with payment of the aggregate Purchase Price for the total number of
one one-hundredths of a Preferred Share (or other securities, as the case may
be) as to which the surrendered Rights are exercised, at or prior to the earlier
of the Close of Business on the Expiration Date and the time at which the right
to exercise the Rights terminates under Section 24 hereof.
(b) The purchase price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $55.00 (the "PURCHASE
PRICE"), shall be subject to adjustment from time to time as provided in Section
11 and Section 12 and shall be payable in lawful money of the United States of
America in accordance with Section 7(c).
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a Preferred Share (or other securities, cash or
other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable tax or charge required to be paid by the holder
of such Right Certificate in accordance with Section 9 of this Agreement, 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 (or make available, if the Rights Agent
is the transfer agent) 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) if the Company in its sole discretion
shall have elected to deposit the Preferred Shares issuable upon exercise of the
Rights into a depository, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) requisition from the Company, when appropriate, the
amount of cash to be paid in lieu of issuance of fractional shares in
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accordance with Section 14, (iii) after receipt of such requisitioned
certificates or depositary receipts, promptly cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt of such cash, promptly deliver that cash to or upon
the order of the registered holder of such Right Certificate. In the event that
the Company is obligated to issue other securities (including Common Shares) of
the Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall exercise
fewer 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 to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14, or the Rights Agent
shall place an appropriate notation on the Right Certificate with respect to
those Rights exercised.
(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 exercise as
set forth in this Section 7 unless such registered holder shall have (i)
properly completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Right Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this 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 canceled Right Certificates
to the Company or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will, to the extent reasonably
practicable, cause to be reserved and kept available out of its authorized and
unissued Preferred Shares, or any Preferred Shares held in its treasury, the
number of Preferred Shares that will be
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sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7 hereof.
(b) So long as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares 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.
(c) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all one one-hundredths of a Preferred Share
(and, following the occurrence of a Triggering Event, Common Shares or other
securities) deliverable upon exercise of Rights shall, at the time of delivery
of the certificates for such securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable securities.
(d) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any one one-hundredths a Preferred Share (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or charge which may be payable in
respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for a
number of one one-hundredths of a Preferred Share (or Common Shares and/or other
securities, as the case may be) 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 for a number of one one-hundredth of a
Preferred Share (or Common Shares and/or other securities, as the case may be)
upon the exercise of any Rights until any such tax has 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 a number of one one-hundredths of a Preferred Share is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable taxes or charges) was made; PROVIDED, HOWEVER, that if the date of
such surrender and payment is a date upon which the transfer books of the
Company for the Preferred Shares are closed, such person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company for the Preferred Shares are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable,
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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 and kind of shares, or fractions thereof,
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) If 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 shares, or (D) issue any of its
capital stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of Preferred Shares or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of Preferred
Shares or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the transfer books
of the Company for the Preferred Shares were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or classification. If an event occurs which would
require an adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii); PROVIDED, HOWEVER, that in no event shall the consideration to be
paid upon the exercise of Rights be less than the aggregate par value of the
capital stock of the Company issuable upon exercise of such Rights.
(ii) Subject to Section 24 of this Agreement, if any Person, alone or
together with his Affiliates and Associates, shall become an Acquiring Person,
then proper provision shall be made so that each holder of a Right, except as
provided below, shall thereafter have the right to receive, upon exercise
thereof at the then-current Purchase Price in accordance with the terms of this
Agreement, in lieu of the number of one one-hundredths of a Preferred Share for
which such Right was otherwise then exercisable, 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- hundredth of a Preferred Share for which a Right
was then exercisable immediately prior to the first occurrence of such Section
11(a)(ii) Event, and (y) dividing that product by 50% of the Current Market
Price per Common Share (determined pursuant to Section 11(d) hereof) on the date
of such first occurrence (such number of shares being hereinafter referred to as
the "ADJUSTMENT SHARES").
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Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights Beneficially
Owned by (i) an Acquiring Person, or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section
11(a)(ii), shall become null and void without any further action and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. No Right Certificate
shall be issued pursuant to Section 3 that represents Rights beneficially owned
by an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof; no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof shall be canceled. The Company
shall use all reasonable efforts to insure that the provisions of this Section
11(a)(ii) and Section 4(b) are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any of their
respective Affiliates, Associates or transferees hereunder.
(iii) If the number of Common Shares which are authorized by the
Company's Certificate of Incorporation, as amended, and not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights, is
not sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), or should the Board of Directors so elect, the Company shall:
(A) determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price
attributable to a Right (such excess, the "SPREAD") and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Company (including, without
limitation, Preferred Shares, or units of Preferred Shares, which the Board of
Directors has determined to have the same value as Common Shares (such Preferred
Shares, "COMMON STOCK EQUIVALENTS"), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
action of the Board of Directors; PROVIDED, HOWEVER, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the first occurrence of a Section 11(a)(ii)
Event, then the
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Company shall be obligated to deliver, upon the surrender for exercise of a
Right Certificate and without requiring payment of the Purchase Price, Common
Shares (to the extent available) and, if necessary, cash, securities and/or
assets that in the aggregate are equal to the Spread. If the Board of Directors
shall determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than one hundred twenty (120) days after the first
occurrence of a Section 11(a)(ii) Event, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period as it may be extended, the "SUBSTITUTION PERIOD"). To the extent that the
Company determines as provided above that some action is to be taken pursuant to
this Section 11(a)(iii), the Company (x) shall provide, subject to Section
11(a)(ii), that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to the
first sentence of this Section 11(a)(iii) and to determine the value thereof. In
the event of any such suspension, the Company shall deliver notice to the Rights
Agent and issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as deliver notice to the Rights
Agent and issue a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the Current Market Price per Common Share (as determined
pursuant to Section 11(d)(i)) on the date of the first occurrence of the event
described in Section 11(a)(ii) and the value of any Common Stock Equivalents
shall be deemed to have the same value as the Common Shares on such date.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them for a
period expiring within 45 calendar days after such record date to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges or
preferences as Preferred Shares ("EQUIVALENT PREFERRED STOCK") or securities
convertible into Preferred Shares or Equivalent Preferred Stock) at a price per
Preferred Share or per share of Equivalent Preferred Stock (or having a
conversion or exercise price per share, if a security convertible into or
exercisable for Preferred Shares or Equivalent Preferred Stock) less than the
Current Market Price per Preferred Share (as determined pursuant to Section
11(d)(ii)) on such record date, the Purchase Price in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or Equivalent Preferred Stock 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 Stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED, HOWEVER, that
in no event shall the consideration to be paid upon the exercise of Rights be
less than the aggregate par value of the capital stock of the Company issuable
upon exercise of such Rights. In case such
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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, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding upon
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 if such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) If the Company shall fix a record date for the making of a distribution
to all holders of Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash or other assets
(other than a regular quarterly cash dividend or a dividend payable in Preferred
Shares, but including any dividend payable on stock other than Preferred Shares)
or convertible securities, 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 Market Price per Preferred Share (as determined pursuant to
Section 11(d)(ii) hereof) on such record date less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding upon
the Rights Agent), of the portion of such evidences of indebtedness, cash or
other assets or convertible securities, subscription rights or warrants
applicable to one Preferred Share, and the denominator of which shall be such
Current Market Price per Preferred Share; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of Rights be less than the
aggregate par value of the capital stock of the Company issuable upon exercise
of such Rights. Such adjustment shall be made successively whenever such a
record date is fixed; and if such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the Current Market
Price per Common Share on any date shall be deemed to be the average of the
daily closing prices per Common Share for the 30 consecutive Trading Days
immediately prior to such date; PROVIDED, HOWEVER, that if the Current Market
Price per Common Share is determined during a period following the announcement
by the issuer of such Common Shares (x) a dividend or distribution on such
Common Shares payable in Common Shares or securities convertible into such
Common Shares or (y) any subdivision, combination or reclassification of such
Common Shares and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
Current Market Price per Common Share shall be appropriately adjusted to reflect
the Current Market Price per share equivalent of such Common Shares. 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
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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 is 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 quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the Nasdaq Stock Market
("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. If on any such date no
market maker is making a market in the Common Shares, the fair value of such
shares on such date, as determined in good faith by the Board of Directors,
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, the Current Market Price per share shall mean the fair value per share
as determined in good faith by the Board of Directors, 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 Market
Price per Preferred Share shall be determined in the same manner as set forth
for the Common Shares in Section 11(d)(i) (other than the last sentence
thereof). If the Current Market Price per Preferred Share cannot be determined
in the manner provided above or if the Preferred Share is not publicly held or
listed or traded in a manner described in Section 11(d)(i), the Current Market
Price per Preferred Share shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the 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, the Current Market Price per Preferred
Share shall mean the fair value per share as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding (except the last
sentence of this Section 11(e)), no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such price; PROVIDED, HOWEVER, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other security 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
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later than the earlier of (i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 12(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Shares,
thereafter the Purchase Price and the number of such other shares so receivable
upon exercise of any Right and the number of Rights outstanding shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Section 11(a), (b) and (c) and the provisions of Sections 7, 9, 10, 12 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 one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one- hundredths of
a Preferred Share (calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment to the Purchase Price by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any adjustment of the
Purchase Price, to adjust the number of Rights, in substitution for any
adjustment in the number of 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- hundredths of Preferred
Share for which such Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i) the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date
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Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Notwithstanding any adjustment or change in the Purchase Price or the
number of Preferred Shares, or fraction thereof, issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
share which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of a
Preferred Share issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable such
number of one one-hundredths of a Preferred Share at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
Preferred Shares and any 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 (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Board
of Directors 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 (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
stock dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to the holders of its Preferred
Shares shall not be taxable to such stockholders.
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(n) The Company covenants and agrees that it shall not at any time after
the Distribution Date (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), to any other Person or
Persons (other than the Company and/or any of its Subsidiaries) in one or more
transactions each of which complies with Section 11(o)), if at the time of or
immediately after such consolidation, merger or sale there are any charter or
by-law provisions, securities outstanding (including but not limited to rights,
warrants or other instruments), agreements in effect or other actions taken
which 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 stockholders of the Person who
constitutes, or would constitute, the Principal Party (as hereinafter defined)
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 prior thereto the Corporation and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the earlier of the
Distribution Date or the time any Person becomes an Acquiring Person, it will
not, except as permitted by Section 23 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.
(p) If, 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 (x) the number of one one-hundredths of a
Preferred Share purchasable after such event upon exercise of each Right shall
be determined by multiplying the number of one one-hundredths of a Preferred
Share so purchasable immediately before 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 (y) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
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(q) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under Section 11(a)(ii) to the extent so exercised and shall not
otherwise affect the rights represented by the Rights under this Rights
Agreement, including the rights represented by Section 12.
Section 12. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) If, on or following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person, and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person shall consolidate with the Company
or merge with and into the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger, other than, in the case
of any transaction described in (x) or (y), a merger or consolidation which
results in all of the securities generally entitled to vote in the election of
directors ("VOTING SECURITIES") of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into securities of the continuing or surviving entity) all of the
Voting Securities of the Company or such continuing or surviving entity
outstanding immediately after such merger or consolidation and the holders of
such securities not having changed as a result of such merger or consolidation),
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or series of
related transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)
hereof), then, and in each such case, proper provision shall be made so that (i)
each holder of a Right, except as provided in Section 11(a)(ii) hereof, 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 shares of validly authorized and issued, fully paid and non-assessable
Common Shares of the Principal Party, not subject to any liens, encumbrances,
rights of call or first refusal or other adverse claims, as shall be equal to
the result obtained by (A) multiplying the then-current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right was then
exercisable immediately prior to the first occurrence of such Section 12(a)
Event (or, if a Section 11(a)(ii) Event had occurred prior to such Section 12(a)
Event, multiplying the number of such one one-hundredth of a Preferred Share for
which a Right was exercisable immediately prior to the first occurrence of such
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product by (B) 50% of the Current
Market Price per Common Share of such Principal Party (determined pursuant to
Section 11(d)(i) on the date of consummation of such Section 12(a) Event); (ii)
the Principal Party 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 Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such Principal
Party following the first occurrence of a Section 12(a) Event; and (iv) such
Principal Party shall take such steps (including, but not
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limited to, the reservation of a sufficient number of Common Shares in
accordance with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to Common Shares thereafter
deliverable upon the exercise of the Right.
(b) "PRINCIPAL PARTY" shall mean
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 12(a), the Person that is the issuer of any securities
into which the Common Shares of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to such merger or consolidation (including, if applicable, the Company if
it is the surviving corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence of Section 12(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions; PROVIDED, HOWEVER, that in any such case, (x) if the Common
Shares of such Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person, the Common
Shares of which is and has been so registered, "Principal Party" shall refer to
such other Person; (y) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of all of which are and
have been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Shares having the greatest market value of
shares held by the public; and (z) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (x) and (y)
above shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the obligation
set forth in this Section 12 in the same ratio as their direct or indirect
interests in such Person bear the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of its
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 12 and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in Sections 12(a) and (b) and confirming that all rights of
first refusal or preemptive rights in respect of the issuance of Common Shares
of such Principal Party upon exercise of outstanding Rights have been waived and
that such transactions shall not result in a default by such Principal Party
under the Rights Agreement, and further providing that, as soon as practicable
after the date of any consolidation, merger or sale or transfer of assets or
earning power referred to in Section 12(a) hereof, such Principal Party will:
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(i) prepare and file a registration statement on an appropriate form
under the Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights; use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing; and use its best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the date of expiration of the Rights, and similarly comply
with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation on the
Nasdaq National Market;
(iii) use its best efforts to qualify or register the rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate; and
(iv) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 (or any successor form) under
the Exchange Act.
The provisions of this Section 12 shall similarly apply to successive mergers or
consolidations or sales or other transfers. The rights under this Section 12
shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereof.
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 12, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts relating to such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Common Shares
and 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 of this Agreement). Notwithstanding the foregoing sentence, the
failure of the Company to make such certificates or give such notice shall not
affect the validity or the force or effect of the requirement for such
adjustment, and, prior to the earlier to occur of the Distribution Date and the
Stock Acquisition Date, the Company may, in its discretion, satisfy the
obligation set forth in clause (c) above by including such summary in its next
regular report to stockholders. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained. Any
adjustment to be made pursuant to Section 11 or 12 shall be effective as of the
date of the event giving rise to such adjustment.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, at the
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election of the Company, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractions of 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 (selected by the Board of Directors) making a market
in the Rights. 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, shall be used, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights, or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be 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. With
respect to fractional Preferred Shares that are not integral multiples of one
one- hundredth of a Preferred Share, if the Company does not issue fractional
shares of depositary receipts in lieu thereof, the Company shall pay to the
registered holders of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth of a Preferred Share. For purposes of
this Section 14(b), the current market value of one one-hundredth of a Preferred
Share shall be one one-hundredth of the closing price of Preferred Shares (as
determined pursuant to Section 11(d)(ii)) for the Trading Day immediately prior
to the date of such exercise.
(c) The Company shall not be required to issue fractions of Common Shares
upon exercise of the Rights pursuant to Section 11(a)(ii) or 12(a) or to
distribute certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may
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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 one- hundredth of a Common Share. For the purposes
of this Section 14(c), the current market value of one Common Share shall be the
closing price of a Common Share (as determined pursuant to Section 11(d)(i)) for
the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of such Right, expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section 14.
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, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, any registered holder of 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 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 shall be entitled to specific performance
of the obligations hereunder, 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 such Right, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced by the
certificates for Common Shares registered in the name of the holders of such
shares (which certificates for Common Shares shall also constitute certificates
for Rights) and each Right will be transferable only in connection with the
transfer of 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 or
offices of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate form and
certificates fully executed;
(c) subject to Sections 6, 7(e) and 11(a)(ii) 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 certificate for Common
Shares) is registered as the absolute owner thereof
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and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated certificate for Common
Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever; 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, that prohibits or otherwise restrains the 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 HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
Preferred Shares or any other securities of the Company which may at any time be
issuable upon 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 or Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and 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 in the premises.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Preferred Shares or Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
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paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons or
otherwise upon the advice of counsel as set forth in Section 20.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person 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 Person succeeding to all or substantially
all of the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
counter signature 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 Certificate either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the counter signature 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 (which 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 of any Acquiring Person and the
determination of Current Market Price) be proved or
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established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proven and established
by a certificate signed or reasonably believed by the Rights Agent to be signed
by any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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
Certificate (except its countersignature thereof) or be required to verify the
same, and 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 authorization, execution and delivery 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 or any adjustment required under the provisions of Section 11 or 12
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustments
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of the certificate described in Section 12); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares or Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Common Shares or 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 the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in
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accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other 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 not been
completed, 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 or Preferred Shares by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or one of the States thereof, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent,
a combined capital
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and surplus of at least $50 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares or Preferred Shares, and, subsequent to the
Distribution Date, mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in this Section
21, 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 resolution of its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind of class of
shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. REDEMPTION.
(a) At any time prior to the earlier of (i) the time that any Person
becomes an Acquiring Person or (ii) the Final Expiration Date, the Board of
Directors may, at its option, redeem all, but not less than all, the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "REDEMPTION PRICE"). The
Company may, at its option, pay the Redemption Price either in Common Shares
(based on the Current Market Price per Common Share at the time of redemption,
as determined pursuant to Section 11(d)(i)) or cash; PROVIDED, HOWEVER, that if
the Company elects to pay the Redemption Price in Common Shares, the Company
shall not be required to issue any fractional Common Shares and the number of
Common Shares issuable to each holder of Rights shall be rounded down to the
next whole share. The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.
(b) Immediately upon the time of the effectiveness of the redemption of the
Rights pursuant to Section 23(a) or such earlier time as may be determined by
the Board of Directors in the action ordering such redemption (although not
earlier than the time of such action) (such time, the "REDEMPTION DATE") and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the
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Rights Agent and the holders of the then outstanding Rights in the manner set
forth in Section 26, PROVIDED, HOWEVER, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. 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 other than in connection with the
purchase of shares of Common Shares prior to the Distribution Date.
Section 24. EXCHANGE.
(a) Subject to Section 24 (c) and 24(d), the Board of Directors may, at any
time after the time that any Person becomes an Acquiring Person, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii))
for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "EXCHANGE RATIO").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any Benefit Plan, any entity holding Common Shares
for or pursuant to the terms of any Benefit Plan, or any trustee, administrator
or fiduciary of any Benefit Plan), together with all Affiliates and 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 in accordance with this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of 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)) held by
each holder of Rights.
(c) If the number of Common Shares which are authorized by the Company's
Certificate of Incorporation, as amended, and not outstanding or reserved for
issuance for
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purposes other than upon exercise of the Right, is not sufficient to permit any
exchange of Rights as contemplated in accordance with this Section 24, the (i)
Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exchange of the Rights, or (ii) the Board of
Directors may determine to exchange Common Shares for then outstanding and
exercisable Rights at such exchange ratio of less than one Common Share per
Right, appropriately adjusted as set forth in Section 24(a), so that all (and
not less than all) of the Common Shares issued but not outstanding or authorized
but unissued (and not reserved for issuance other than upon exercise of the
Rights) are issued in the exchange contemplated by this Section 24.
(d) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares or Common Stock Equivalents for Common
Shares exchangeable for Rights, at the initial rate of one one-hundredth of a
Preferred Share (or an appropriate number of Common Stock Equivalents) for each
Common Share, as appropriately adjusted to reflect adjustments in dividend,
liquidation and voting rights of Preferred Shares pursuant to the terms thereof,
so that of the fraction of a Preferred Share delivered in lieu of each Common
Share shall have essentially the same voting rights as one Common Share.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company proposes, at any time after the Distribution Date,
(i) to declare or pay any dividend payable in stock of any class to the holders
of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular quarterly cash dividend out of earnings
on retained earnings of the Company) or (ii) to offer to the holders of
Preferred Shares options, 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 (iii) to effect any reclassification of
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (iv) to effect any consolidation or merger
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o)), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 26, a notice of such proposed
action to the extent feasible and file a certificate with the Rights Agent to
that effect, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of record of the Preferred Shares, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of
31
<PAGE>
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 Preferred Shares,
whichever shall be the earlier. 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 upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date, a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of the securities
of the Company, including the Rights, for purposes of this Agreement and no
other notice need be given to such holders.
(c) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, notice of
the occurrence of such event, which notice shall specify the event and the
consequences thereof to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in Section 25(a) to Preferred Shares shall be deemed
thereafter to refer to Common Shares and/or, if appropriate, other securities.
Section 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any 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:
Celadon Group, Inc.
One Celadon Drive
Indianapolis, IN 46235-4207
Attention: Secretary
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:
Fleet National Bank
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 the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
32
<PAGE>
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time,
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates in order to
cure any ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any change to or delete any provision hereof or to adopt any other
provisions with respect to the Rights which the Company may deem necessary or
desirable; PROVIDED, HOWEVER, that from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be amended or supplemented
in any manner which would adversely affect the interests of the holders of
Rights (other than an Acquiring Person and its Affiliates and Associates). Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment;
PROVIDED, that any supplement or amendment that does not amend Sections 18, 19,
20 or 21 hereof in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company whether or not also executed by the
Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of 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, without limitation, a determination
to redeem or not redeem the Rights or to amend the Agreement) and whether any
proposed amendment adversely affects the interests of the holders of Right
Certificates. All such actions, calculations, interpretations and determinations
(including, for purpose of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good faith, (x)
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (y) shall not
subject the Board to any liability to the holders of the Right Certificates.
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, registered holders of 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, registered holders of the Common Shares).
33
<PAGE>
Section 31. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 32. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts to be made and performed entirely within the State of Delaware.
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.
[Remainder of Page is Intentionally Blank]
34
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first written above.
Attest: CELADON GROUP, INC.
By: /s/ JERYL SMITH By: /s/ PAUL A. WILL
----------------------------- ------------------------------
Print name: Jeryl Smith Print name: Paul A. Will
Title: Executive Assistant Title: Chief Financial Officer
Attest: FLEET NATIONAL BANK
By: /s/ CRAIG C. CARR By: /s/ TYLER HAYNES
----------------------------- ------------------------------
Print name: Craig C. Carr Print name: Tyler Haynes
Title: Account Manager Title: Managing Director
35
<PAGE>
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
CELADON GROUP, INC.
-----------------------------------------------
(Pursuant to Section 151 of the General Corporation
Law of the State of Delaware)
-----------------------------------------------
Celadon Group, Inc., a Delaware corporation (the "CORPORATION"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the Delaware General
Corporation Law at a meeting duly called and held on June 28, 2000:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (the "BOARD") in accordance with the
provisions of the Certificate of Incorporation, as amended (the "CERTIFICATE OF
INCORPORATION"), of the Corporation, a series of Preferred Stock, par value
$1.00 per share (the "PREFERRED STOCK"), of the Corporation is hereby created
and the designation and number of shares, and the relative rights, preferences
and limitations thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as Series A Junior Participating Preferred Stock, par value $1.00 per
share (the "SERIES A PREFERRED STOCK"), and the number of shares constituting
such series shall be 90,000. Such number of shares may be increased or decreased
by resolution of the Board; PROVIDED, HOWEVER, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of any and all outstanding options, rights or warrants to purchase, or
A-1
<PAGE>
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of the holders of shares of any series of
Preferred Stock ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall be
entitled to receive when, as and if declared by the Board out of funds legally
available for the purpose, quarterly dividends payable in cash (except as
provided below) on the last day of January, April, July and October in each year
(each such date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT
DATE"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount (rounded to the nearest cent), subject to the provision for adjustment as
hereinafter set forth, equal to 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions, other than a dividend payable
in shares of Common Stock, par value $.033 per share (the "COMMON STOCK"), of
the Corporation or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise)
declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock. If the Corporation shall at any time declare or pay any
dividend or distribution on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
or distribution payable in shares of Common Stock).
(c) Dividends due pursuant to Section 2(a) shall begin to accrue and
be cumulative on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date immediately preceding the date of issue of such
shares of Series A Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment Date or
A-2
<PAGE>
is a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall accumulate but shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
Section 3. VOTING RIGHTS. The holders of Shares of Series A Preferred
Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment as hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes (and each one one- hundredth of a share of Series A Preferred Stock shall
entitle the holder thereof to one vote) on all matters submitted to a vote of
the stockholders of the Corporation. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(b) Except as otherwise provided in the Certificate of Incorporation,
including any other Certificate of Designation creating a series of Preferred
Stock, or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise required by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporation action.
(d) Nothing herein shall prevent the directors or stockholders from
taking any action to increase the number of authorized shares of Series A
Preferred Stock, increasing the number of authorized shares of Preferred Stock
of a different class than the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value of the Common Stock
or Preferred Stock, or issuing options, warrants, or rights to any class of
stock of
A-3
<PAGE>
the Corporation, as authorized by the Certificate of Incorporation as now in
effect or as it may hereafter be amended.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) 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 A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on or make any other distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such 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; or
(iii) 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 A
Preferred Stock, 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
(both as to dividends and upon dissolution, liquidation or winding up)
to the Series A Preferred Stock.
(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 Section 4(a), purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series, and may be reissued as part
of a new series of Preferred Stock to be created by resolution of the Board,
subject to the conditions and restrictions on issuance set forth in the
Certificate of Incorporation, including any Certificate of Designations creating
a series of Preferred Stock or any similar stock, or as otherwise required by
law.
A-4
<PAGE>
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of Common Stock plus an
amount equal to any accrued and unpaid dividends. If the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that was outstanding immediately prior to
such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, or otherwise changed, then in any
such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged. If the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that was
outstanding immediately prior to such event.
Section 8. RANK. Unless otherwise provided in the Certificate of
Incorporation, including a Certificate of Designation relating to a subsequent
series of Preferred Stock, the Series A Preferred Stock shall rank junior to all
other series of the Preferred Stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up.
A-5
<PAGE>
Section 9. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
A-6
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Designation as of this 18th day of July, 2000.
CELADON GROUP, INC.
By:--------------------------
Print name:
Title:
A-7
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. R---- ----- Rights
NOT EXERCISABLE AFTER THE EARLIER OF JULY 31, 2010 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BE NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.]1
RIGHT CERTIFICATE
CELADON GROUP, INC.
This certifies that ----------------------------, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of July 20, 2000 (the "Rights Agreement"),
between Celadon Group, Inc., a Delaware corporation (the "Company"), and Fleet
National Bank (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as defined in the Rights Agreement) and prior to
the Expiration Date, one one- hundredth of a fully paid, nonassessable share of
the Series A Junior Participating Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), of the Company at a purchase price of $55.00 per one
one-hundredth of a share of Preferred Stock (the "Purchase Price") upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
------------------------
1 If applicable, insert this portion of the legend and delete the preceding
sentence.
B-1
<PAGE>
The number of Rights evidenced by this Right Certificate (and the number
and kind of shares issuable upon exercise of each Right) set forth above and the
Purchase Price set forth above, are as of July 12, 2000, and may have been, or
in the future may be, adjusted as a result of the occurrence of certain events,
as more fully set forth in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as set forth in the
Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, concurrent with or after such transfer, became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person, such Rights shall become
null and void and no holder thereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of Rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights Agent
designated for such purpose and subject to the terms and conditions set forth in
the Rights Agreement, any Right Certificate or Certificates may be transferred
or exchanged for another Right Certificate or Certificates evidencing a like
number of Rights as the Right Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of Directors
of the Company may, at its option,
(a) at any time prior to the earlier of (i) the time that any Person
becomes an Acquiring Person or (ii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights at a redemption price of
$.01 per Right (subject to adjustment); or
(b) at any time after the time that any Person becomes an Acquiring
Person (but before such Person, together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding), exchange all or part of the then outstanding
Rights (other than Rights held by the Acquiring Person and certain related
Persons) for Common Shares at an exchange ratio of one Common Share per
Right (subject to adjustment).
B-2
<PAGE>
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one-hundredth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts); but in lieu
thereof, a cash payment will be made, as provided in the Rights Agreement.
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 Preferred Stock or
of any other securities of the Company which may at any time be issuable upon
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors upon any matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Right Certificate have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of
Attest: CELADON GROUP, INC.
By:----------------------------- By:-----------------------------
Secretary Print name:
Print name: Title:
Countersigned:
FLEET NATIONAL BANK
as Rights Agent
By:-----------------------------
Print name:
Title:
B-3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED -------------------- hereby sells, assigns and transfers
unto --------------------------- this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint -----------------, Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated:------------
--------------------------------
(Signature)
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan institution or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
--------------------------------
(Signature)
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<PAGE>
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Right
Certificate.)
To: CELADON GROUP, INC.
The undersigned hereby irrevocably elects to exercise ------------ Rights
represented by this Right Certificate to purchase the one one-hundredth of a
share of Preferred Stock (or such other number or kind of securities of the
Company or of any other person which may be issuable upon the exercise of such
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security or other identifying number
(Please print name and address)
If the number of Rights being exercised hereunder are not all the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
(Please print name and address)
Dated:-------- Signature:
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan institution or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
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<PAGE>
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
--------------------------------
Signature
-------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
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<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On June 28, 2000, the Board of Directors of Celadon Group, Inc. (the
"Company") declared a dividend distribution of one preferred stock purchase
right (a "Right") for each outstanding share of Common Stock, $.033 par value,
of the Company (the "Common Shares"), payable to the stockholders of record on
July 20, 2000 (the "Record Date"). The Board of Directors also authorized and
directed the issuance of one Right with respect to each Common Share issued
thereafter until the Distribution Date (as defined below) (or the earlier
redemption or expiration of the Rights).
Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock, $1.00 par value (the "Preferred
Shares"), at a price of $55.00, subject to adjustment (the "Purchase Price").
The description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Fleet National Bank, as Rights Agent
(the "Rights Agent"), dated as of July 20, 2000.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earliest
to occur of (i) the tenth day after public disclosure that a person or entity (a
"Person") or group of affiliated or associated Persons (a "Group") has acquired
beneficial ownership of 15% or more of the outstanding Common Shares; or (ii) 10
business days (or such later date as the Board of Directors may determine)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in a Person or
Group becoming an Acquiring Person (as hereinafter defined) (the earliest of
such dates being called the "Distribution Date"). A Person or Group whose
acquisition of Common Shares causes a Distribution Date pursuant to clause (i)
above is an "Acquiring Person." The date that a Person or Group becomes an
Acquiring Person is the "Stock Acquisition Date."
The Preferred Shares purchasable upon exercise of the Rights will be
entitled, when, as and if declared, to receive a minimum preferential quarterly
dividend payment of the greater of (1) $1.00 per share and (b) an amount equal
to 100 times the dividend declared per Common Share. In the event of
liquidation, dissolution or winding up of the Company, the holders of the
Preferred Shares will be entitled to receive a minimum liquidation payment of
the greater of (a) $100 per share and (b) an amount equal to 100 times the
payment made per Common Share. Each Preferred Share will have 100 votes, voting
together with the Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount and type of consideration
received per Common Share. The rights of the Preferred Shares as to dividends
and liquidation, and in the event of mergers and consolidation, are protected by
customary anti-dilution
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<PAGE>
provisions. Because of the nature of the Preferred Share dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon the transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date (and
to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date, and will expire
at the close of business on July 20, 2010, unless earlier redeemed by the
Company as described below.
In the event that any person becomes an Acquiring Person, each holder of
Rights (other than Rights that have become null and void as described below)
will thereafter have the right (the "Flip-In Right") to receive, upon exercise
of such Rights, the number of Common Shares (or, in certain circumstances, other
securities of the Company) having a value (immediately prior to such triggering
event) equal to two times the aggregate exercise price of such Rights. For
example, if a Person became an Acquiring Person at a time when the current per
share market price of the Company's Common Shares is $20 and the Purchase Price
was $100, each holder of a Right (other than a Right which has become null and
void as described herein) would have the right to receive ten Common Shares upon
exercise of the Right and payment of the Purchase Price of $100. Following the
occurrence of the event described above, all Rights that are or (under certain
circumstances specified in the Rights Agreement) were beneficially owned by any
Acquiring Person or any affiliate or associate thereof or certain transferees
thereof will be null and void.
The Board, at its option, may at any time after any Person becomes an
Acquiring Person exchange all or part of the then issued and outstanding Rights
(other than those that have become null and void as described above) for Common
Shares at an exchange ratio of one Common Share per Right in lieu of the Flip-In
Right, provided no Person is the beneficial owner of 50% or more of the Common
Shares at the time of such exchange.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction in
which the holders of all of the
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<PAGE>
outstanding Common Shares immediately prior to the consummation of the
transaction are not the holders of all of the surviving corporation's voting
power, or (ii) more than 50% of the Company's assets or earning power is sold or
transferred, then each holder of Rights (except Rights which previously have
been voided as discussed above) shall thereafter have the right (the "Flip-Over
Right") to receive, upon exercise of such Rights, common shares of the acquiring
company (or in certain circumstances, its parent) having a value equal to two
times the aggregate exercise price of the Rights. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of Common Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Shares, (ii) upon
the grant to holders of the Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the then current market
price of the Common Shares, or (iii) upon the distribution to holders of the
Common Shares of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective at such time, on such
basis and with such conditions as the Board of Directors may establish in its
sole discretion. The Company may, at its option, pay the Redemption Price in
Common Shares.
All of the provisions of the Rights Agreement may be amended by the Board
of Directors prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board of Directors in
order to cure any ambiguity, defect or inconsistency, or to make changes which
do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders of the Company, stockholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
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<PAGE>
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
C-4
