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FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
HF FINANCIAL CORP.
___________________________
(Exact name of registrant as specified in its charter)
DELAWARE 46-0418532
________________________ ____________________________________
(State of incorporation) (I.R.S. Employer Identification No.)
225 South Main Street
Sioux Falls, SD 57102
_________________________
(Address of principal executive offices including zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
to be registered on which each class is
to be registered
___________________ ______________________
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On October 23, 1996, the Board of Directors of HF Financial Corp. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, $.01 par value (a "Common Share"),
of the Company. The dividend is payable to the Company's stockholders of
record on November 13, 1996 (the "Record Date"). The Rights will be issued
upon the terms and subject to the conditions set forth in a Rights Agreement
dated as of October 23, 1996 (the "Rights Agreement"), between the Company
and ChaseMellon Shareholder Services, L.L.P., as Rights Agent (the "Rights
Agent"), as the same may be amended from time to time. Each Right will
entitle the registered holder to purchase from the Company after the
Distribution Date (as described below), one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $1.00 per share (the
"Preferred Shares"), of the Company, at a price of $65 per one one-hundredth
of a Preferred Share (the "Purchase Price"), subject to adjustment.
The Rights become exercisable on the first day after the Distribution
Date, and not before. The Distribution Date is defined as the earlier to
occur of (i) ten business days after a public announcement that a person or
group of affiliated or associated persons (not including the Company, any
wholly subsidiary of the Company, any person holding Common Shares acquired
in a transaction approved in advance in writing by a majority of the
Disinterested Directors of the Board of Directors of the Company, any
employee benefit plan of the Company or its subsidiaries or any entity
holding Common Shares for or pursuant to any such plan and any person holding
10% or more of the Company's Common Shares twenty days preceding the Record
Date) has acquired beneficial ownership of 20% or more of the Common Shares
(an "Acquiring Person"), or (ii) ten business days after the commencement of,
or the first public announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in beneficial ownership
by a person or group (excluding the Company, any owned subsidiary of the
Company, any employee benefit plan of the Company or of its subsidiaries, any
entity holding Common Shares for or pursuant to any such plan, any person
holding Common Shares acquired in a transaction approved in advance in
writing by a majority of the Disinterested Directors of the Board of
Directors of the Company and any person holding 10% or more of the Company's
Common Shares twenty days preceding the Record Date) of 20% or more of the
Common Shares outstanding.
The Rights will expire on October 22, 2006 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
Until the Distribution Date, the Rights will be evidenced, with respect
to any certificate for Common Shares outstanding as of the Record Date, by
such certificate together with a copy of a Summary of Rights and, with
respect to any certificate for Common Shares issued after the Record Date and
before the Distribution Date (or earlier redemption or expiration of the
Rights), by such certificate, which will bear a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
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redemption, exchange or expiration of the Rights), (i) the Rights will be
transferred with and only with the Common Shares, and (ii) the surrender for
transfer of any certificate for Common Shares 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 such separate Right Certificates alone will
evidence the Rights.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the issuance of certain rights, options or
warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less
than the then current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above). The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares
or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring,
in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled, when, as and if declared,
to a minimum preferential quarterly dividend payment of $1 per share but will
be entitled to an aggregate dividend of 100 times a dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred
Shares will be entitled to a minimum preferential liquid payment of $100.00
per share (plus any accrued but unpaid dividends) but will be entitled to an
aggregate payment of 100 times the payment made per Common Share (subject to
certain restrictions). Each Preferred Share will have 100 votes, voting
together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
Common Share. These rights are protected by customary antidilution
provisions.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right, other than our rights beneficially
owned by the Acquiring Person (which will thereupon become void), will
thereafter have the right to receive, upon exercise of a Right at the
then-current exercise price of the Right, that number of shares of Common
Stock having a market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
before the earlier of one of the events described in a previous paragraph or
the acquisition by that person or group of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by that person
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or group, which will have become void), in whole or in part, at an exchange
ratio of one Common Share per Right (subject to adjustment).
If, after a person or group becomes an Acquiring Person, the Company is,
in effect, acquired in a merger or other business combination transaction, or
50% or more of its consolidated assets or earning power is sold, proper
provisions will be made so that each holder of a Right (other than Rights
owned by that person or group, which will have become void) will thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
As described in the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person shall become null and void.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other
than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares, or the close of business on the tenth business day
after the Shares Acquisition Date, whichever is later, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price of
$0.001 (one-tenth of one cent) per Right (the "Redemption Price"), which may
be paid in cash, with Common Shares, or other consideration deemed
appropriate by the Board of Directors of the Company. Immediately upon the
action of the Board of Directors of the Company to redeem the Rights, the
Company shall announce the redemption, the right to exercise the Rights will
terminate, and the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company pursuant to such Right, including,
without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of the
Company, in its sole and absolute discretion and without the consent of the
holders of the Rights, at any time for so long as the Rights are redeemable
to change, supplement or amend the Rights Agreement in any respect. After
the rights are no longer redeemable, the terms of the Rights may be amended
without approval of the holders of the Rights to cure ambiguities, correct or
supplement defective or inconsistent provisions, shorten or lengthen time
periods, or otherwise change, delete or supplement provisions, so long as any
such
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change, deletion or amendment does not adversely affect the interests of the
holders of the Rights (not including an Acquiring Person, in whose hands all
Rights are void).
As of June 30, 1996, the Company had 5,000,000 Common Shares and 500,000
shares of serial preferred stock authorized for issuance. As of June 30,
1996, there were 3,051,738 Common Shares outstanding. In addition, as of
June 30, 1996, there were 302,000 Common Shares reserved for issuance under
the Company's 1991 Stock Option Plan, as amended, 245,939 shares of which are
subject to outstanding options. As of June 30, 1996, there were no shares of
preferred stock issued or outstanding.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on a substantial number of Rights
being acquired or redeemed. The Rights should not interfere with any merger
or other business combination approved by the Board of Directors of the
Company since the Board of Directors may, at its option, at any time prior to
the close of business on the tenth business day after the Shares Acquisition
Date, redeem all but not less than all of the then outstanding Rights at the
Redemption Price.
A copy of the Rights Agreement has been filed as an exhibit to this
Registration Statement. 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 hereby incorporated herein by reference.
The form of Rights Agreement between the Corporation and the Rights Agent
specifying the terms of the Rights, together with Exhibit A thereto, the form
of Certificate of Designations specifying the terms of the Series A Junior
Participating Preferred Stock, Exhibit B thereto, the form of Right
Certificate, and Exhibit C thereto, the form of Summary of Rights to Purchase
Series A Junior Participating Preferred Stock, are attached hereto as
exhibits and incorporated herein by reference. The foregoing description of
the Rights is qualified by reference to those exhibits.
4
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Item 2. EXHIBITS
1. Rights Agreement dated as of October 23, 1996, between HF Financial
Corp. and ChaseMellon Shareholder Services, L.L.P., as Rights Agent,
which includes, as exhibits, the form of Certificate of Designations
of Series A Junior Participating Preferred Stock, the form of Right
Certificate, and the Summary of Rights to Purchase Series A Junior
Participating Preferred Stock.
2. Letter to HF Financial Corp. stockholders.
5
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Dated: October 23, 1996. HF FINANCIAL CORP.
By: /s/ Curtis L. Hage
--------------------------
Curtis L. Hage
Chief Executive Officer
6
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INDEX TO EXHIBITS
Exhibit
Number
- -------
1. Rights Agreement dated as of October 23, 1996,
between HF Financial Corp. and ChaseMellon
Shareholder Series, L.L.P., as Rights Agent, which
includes, as exhibits, the form of Certificate of
Designations of Series A Junior Participating
Preferred Stock, the form of Right Certificate,
and the Summary of Rights to Purchase Series A
Junior Participating Preferred Stock.
2. Letter to stockholders of HF Financial Corp.
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EXHIBIT 1
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_______________________________________________________________________________
RIGHTS AGREEMENT
between
HF FINANCIAL CORP.
and
ChaseMellon Shareholder Services, L.L.P.
(as Rights Agent)
Dated as of October 23, 1996
_______________________________________________________________________________
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TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . . . 7
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . . . . 7
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . 10
Section 5. Countersignature and Registration. . . . . . . . . . . . . . . . 11
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificate; Mutilated, Destroyed, Lost or Stolen Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. . 13
Section 8. Cancellation and Destruction of Right Certificate. . . . . . . . 15
Section 9. Reservation and Availability of Preferred Shares . . . . . . . . 16
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . 18
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . 35
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . . . 40
Section 15. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . 42
Section 16. Right Certificate Holder Not Deemed a Stockholder. . . . . . . . 44
Section 17. Concerning the Rights Agent. . . . . . . . . . . . . . . . . . . 44
Section 18. Merger or Consolidation or Change of Name of Rights Agent. . . . 45
Section 19. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . 46
Section 20. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . 48
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Section 21. Issuance of New Right Certificates . . . . . . . . . . . . . . . 50
Section 22. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 23. Exchange.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . 55
Section 25. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 26. Changes, Deletions, Supplements and Amendments . . . . . . . . . 57
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 28. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . 58
Section 29. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 30. Determinations and Actions by the Board of Directors . . . . . . 59
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . 60
Exhibit A Form of Certificate of Designations of Series A Junior
Participating Preferred Stock
Exhibit B Form of Right Certificate
Exhibit C Summary of Rights to Purchase Series A Junior Participating
Preferred Stock
ii
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RIGHTS AGREEMENT
Rights Agreement, dated as of October 23, 1996, between HF Financial
Corp., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.P. (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined), of the Company outstanding as of the Close of
Business on November 13, 1996 (the "Record Date"), each Right representing
the right to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock, $1.00 par value, of the Company, having the
rights and preferences set forth in the Certificate of Designation attached
hereto as EXHIBIT A, upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each Common Share of the Company that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms (in addition to those defined above) shall have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of twenty (20%) or
more of the Common Shares then outstanding, but
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shall not include: (i) the Company, (ii) any wholly owned Subsidiary (as
such term is hereinafter defined) of the Company, (iii) any Person holding
Common Shares issued to that Person by the Company in a transaction occurring
after the Record Date and approved in advance in writing by a majority of
Disinterested Directors (as such term is hereinafter defined in Section 22
hereof) of the Company's Board of Directors to the extent, and only to the
extent, of the Common Shares so held (a "Company-Approved Issuance"), (iv)
any employee benefit plan of the Company or any Subsidiary of the Company,
(v) any Person holding Common Shares for or pursuant to the terms of any such
employee benefit plan to the extent, and only to the extent, of the Common
Shares so held, or (vi) any Person who or which, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of ten percent
(10%) or more of the Common Shares outstanding on the 20th day preceding the
Record Date; PROVIDED, HOWEVER, that such Person shall be deemed to be an
Acquiring Person upon becoming the Beneficial Owner, together with all
Affiliates and Associates of such Person, of any additional Common Shares
representing an incremental increase of twenty percent (20%) or more of the
Common Shares then outstanding, which were acquired at any time after the
20th day preceding the Record Date. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" solely as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned
by such Person; PROVIDED, HOWEVER, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock, then such Person shall be
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deemed to be an "Acquiring Person" unless the consummation of the acquisition
of such additional shares of Common Stock such Person does not own 20% or
more of the shares of Common Stock then outstanding. For all purposes of
this Agreement, any calculation of the number of shares of the Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), as
an effect on the date of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities, or upon
the exercise of conversion rights, exchange rights, rights
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(other than the Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange;
(iii) which such Person or any of such Person's Affiliates or
Associates has 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 (A) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act, and (B) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iv) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the "provided, however" clause contained in Section 1(c) (iii)), or
disposing of any securities of the Company.
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Notwithstanding the foregoing, any securities that are owned or held by (i)
the Company, (ii) any Subsidiary of the Company, (iii) any Person pursuant to
a Company-Approved Issuance, or (iv) any employee benefit plan of the Company
or of any Subsidiary of the Company (and any securities that are owned or
held by any Person pursuant to the terms of any such employee benefit plan),
shall not be deemed to be beneficially owned by any other Person and no other
Person shall be deemed to be the Beneficial Owner of such securities to the
extent, and only to the extent, of the securities so held.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of South Dakota
or the State of New York are authorized or obligated by law or executive
order to close.
(e) "Close of Business" on any given date shall means 5:00 p.m.,
Sioux Falls, South Dakota time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 p.m., Sioux Falls, South Dakota
time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
(specifically or in context) shall mean the shares of common stock, par value
$.01 per share, of the Company. "Common Shares" when used with reference to
any Person other than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Company-Approved Issuance" shall have the meaning set forth
in Section 1(a) hereof.
(h) "Disinterested Director" shall have the meaning set forth in
Section 22(c) hereof.
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(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Person" shall mean any individual, firm, corporation,
incorporated or unincorporated association, limited liability company,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(l) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company
having the rights and preferences set forth in the Certificate of
Designations attached to this Rights Agreement as Exhibit A.
(m) "Purchase Price" shall have the meaning set forth in Section
7 hereof, as the same may be adjusted from time to time in accordance with
the terms of this Agreement.
(n) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
(o) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(p) "Subsidiary" of any Person shall mean any corporation,
incorporated or unincorporated association, limited liability company,
partnership or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly,
by such Person.
Certain additional terms used wholly within a subsequent Section of this
Agreement shall have the meaning given them in the relevant Section of this
Agreement for purposes of such Section.
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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.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of the close of business (i) on the tenth
Business Day after the Shares Acquisition Date, or (ii) on the tenth Business
Day after the date of the commencement by any Person (other than the Company,
any wholly owned Subsidiary of the Company, any Person holding Common Stock
acquired in a Company-Approved Issuance, any employee benefit plan of the
Company or of any wholly owned Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan to the
extent such entity is so acting with the approval or consent of the Company)
of, or of the first public announcement of the intention of any Person (other
than the Company, any Person holding Common Stock acquired in a
Company-Approved Issuance, any wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or of any wholly owned Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of
any such plan to the extent such entity is so acting with the approval or
consent of the Company or as part of its ordinary activities with respect to
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of twenty
percent (20%) or more of the Common Shares then outstanding (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
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provisions of Section 3(b) hereof) solely by the certificates for Common
Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if requested,
send), by first-class, insured, postage prepaid mail, to each record holder
of Common Shares as of the close of business on the Distribution Date (other
than any Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of EXHIBIT B hereto (a "Right
Certificate"), evidencing one Right for each Common Share of the Company so
held. 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 a Summary of Rights to Purchase Preferred Shares,
in substantially the form of EXHIBIT C hereto (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares of the Company 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 and the Final Expiration Date), the
surrender for transfer of any certificate for Common
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Shares outstanding on the Record Date, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date) shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agreement
between HF Financial Corp. and ChaseMellon Shareholder
Services, L.L.P., dated as of October 23, 1996, 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 HF Financial Corp. Under certain
circumstances, as set forth in the Rights Agreement, the
Rights described therein will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. HF Financial Corp. will mail to the holder of
this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person (as those terms are
defined in the Rights Agreement) shall become null and
void. The Rights shall not be exercisable by a holder in
any jurisdiction where the requisite qualification to the
issuance to such holder of the Rights, or the exercise by
such holder of the Rights in such jurisdiction, shall not
have been obtained or obtainable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares
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<PAGE>
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.
Notwithstanding this subparagraph (c), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the rights
of any holder of the Rights.
(d) Notwithstanding anything in this Agreement to the contrary,
from and after the time any Person becomes an Acquiring Person, any Rights
that are or were acquired or beneficially owned by such Acquiring Person (or
any Associate or Affiliate of such Acquiring Person) shall be null and void
without any further action, and any holder of such Rights shall thereafter
have no rights whatsoever with respect to such Rights, whether under this
Agreement (including the right to exercise such Rights under any provision of
this Agreement) or otherwise.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed
on the reverse thereof) shall be in substantially the form of EXHIBIT B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed or
quoted, or to conform to usage. Subject to the provisions of Section 22 and
Section 23 hereof, the Right Certificate shall
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<PAGE>
entitle the holder thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one
one-hundredths of a Preferred Share set forth therein (the "Purchase Price"),
but the number of such one one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board of
Directors, its President or any Vice President, either manually or by
facsimile signature, may 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 manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders
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<PAGE>
of the Right Certificates, the number of rights evidenced on its face by each
of the Right Certificates, and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATE; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Sections 7, 11 and 14 hereof, at any time after
the Distribution Date, and at or prior to the earlier of the Redemption Date
or the Final Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become void
pursuant to Section 11(a)(iii) hereof or that have been exchanged pursuant to
Section 23 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a Preferred Share
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make
such request in writing delivered to the Rights Agent, and shall endorse and
surrender the Right Certificate or Right Certificates to be transferred,
split up, combined or exchanged at the principal office of the Rights Agent.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identify 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
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<PAGE>
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable immediately after the Distribution Date, and only after the
Distribution Date, and thereafter the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the aggregate Purchase Price (or the Alternative
Purchase Price, if applicable) with respect to the total number of one
one-hundredths of a Preferred Share (or other securities, cash or other
assets, as the case may be) as to which the Rights are exercised, at any time
which is both after the Distribution Date and prior to the earliest of (i)
the close of business on October 22, 2006 (the "Final Expiration Date"), (ii)
the time at which the
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<PAGE>
Rights are redeemed as provided in Section 22 hereof (the "Redemption Date"),
and (iii) the time at which such Rights are exchanged as provided in Section
23 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Right shall initially be $65, and shall
be subject to adjustment from time to time as provided in Sections 11 and 13
hereof (the "Purchase Price"), and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
shares to be purchased (plus an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance
with Section 9 hereof) by certified check, cashier's check or money order
payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates, cause the
same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by
such holder, and (iv) when appropriate, after receipt deliver such cash,
property or other securities to or upon the order of the registered holder of
such Right Certificate.
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<PAGE>
(d) Except as may be otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to such holder's
duly authorized assigns, subject to the provisions of Section 14 hereof.
(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 of Rights upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed a 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 CERTIFICATE. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any Right Certificate representing Rights
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
15
<PAGE>
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares or any Preferred Shares held in its treasury, the number of Preferred
Shares that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and,
following the time that any person becomes an Acquiring Person, shares of
Common Stock and other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates therefor (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(c) 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 are payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or other securities which may become
or be issuable under the terms of this Agreement) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of
certificates for the Preferred Shares (or other securities which may become
or be issuable under the terms of this Agreement) in a name other than that
of, the registered holder of the Right Certificates evidencing Rights
surrendered for transfer, delivery or exercise or to issue or to deliver any
certificates for
16
<PAGE>
Preferred Shares (or other securities which may become or be issuable under
the terms of this Agreement) upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such
Right Certificates at the time of surrender) or until it has been established
to the Company's reasonable satisfaction that no such tax is due.
(d) From and after such time as the Rights become exercisable,
the Company shall use its best efforts, if then necessary, to permit the
issuance of shares of Preferred Stock (and following the time that any Person
becomes an Acquiring Person, shares of Common Stock and other securities)
upon the exercise of Rights, to register and qualify such shares of Preferred
Stock (and, following the time that any person becomes an Acquiring Person,
shares of Common Stock and other securities) under the Securities Act of 1993
or "Blue Sky" laws (to the extent exemptions therefrom are not applicable),
cause such registration statement and qualifications to become effective as
soon as possible after such filing, and keep such registration statement and
qualifications effective (with a prospectus at all times meeting the
requirements of the Act) until no longer required to do so under the Act with
respect to securities purchasable upon exercise of the Rights. The Company
may temporarily suspend, for a period not to exceed ninety (90) days
following the Distribution Date, the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. Upon any such suspension of exercisability of Rights referred to
in this paragraph, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Rights Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and
17
<PAGE>
until a registration statement under the Securities Act of 1933 (if required)
shall have been deemed effective.
(e) Notwithstanding any provision in this Agreement to the
contrary, the Rights shall not be exercisable by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder of the Rights in such jurisdiction, shall not have
been obtained or be obtainable, or the exercise thereof shall not be
permitted under applicable law or a registration statement shall not have
been declared effective.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the
Company are open.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of Preferred Shares that the holder
of a Right Certificate is entitled to purchase on the exercise of the Rights
evidenced thereby, and the number of Rights outstanding, are subject to
adjustment from time to time as provided in this Section 11.
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<PAGE>
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares, or (D) issue any shares of its capital stock in a reclassification
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 at the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less then the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
19
<PAGE>
(ii) Subject to Section 23 of this Agreement, in the event any
Person becomes an Acquiring Person (the first occurrence of such event
being referred hereinafter as the "Flip-In Event"), then (A) the Purchase
Price shall be adjusted to be the Purchase Price in effect immediately
prior to the Flip-In Event multiplied by the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable immediately
prior to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided
in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon exercise thereof at a price equal to the
Purchase Price (as so adjusted), in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock, such number of shares
of Common Stock as shall equal the result obtained by dividing the Purchase
Price (as so adjusted) by 50% of the current per share market price of the
Common Stock (determined pursuant to Section 11(d) hereof) on the date of
such Flip-In Event; PROVIDED, HOWEVER, that the Purchase Price (as so
adjusted) and the number of shares of Common Stock so receivable upon
exercise of a Right shall, following the Flip-In Event, be subject to
further adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary, however, from
and after the Flip-In Event, any Rights which are beneficially owned by (x)
any Acquiring Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who becomes a transferee after the Flip-In Event, or (z) a
transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event
pursuant to either (I) a
20
<PAGE>
transfer from the Acquiring Person to holders of its equity securities or
to any Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred rights, or (II) a transfer which
the Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions
of this paragraph, and subsequent transferees of such Persons, shall be
void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such rights under any
provisions of this Agreement. The Company shall use all reasonable efforts
to ensure that the provisions of this Section 11(a)(ii) 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 its Affiliates, Associates or transferees
hereunder. From and after the Flip-In Event, no Rights Certificate shall
be issued pursuant to Section 3 or Section 6 hereof that represents Rights
that are or have become void pursuant to the provisions of this paragraph,
and any Rights Certificate delivered to the Rights Agent that represents
Rights that are or have become void pursuant to the provisions of this
paragraph, shall be cancelled. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not
been exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and not pursuant to this
Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) such number or fractions of shares of Preferred
Stock
21
<PAGE>
having an aggregate current market value equal to the current per
share market price of a share of Common Stock. In the event that there
shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Board of Directors
shall, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party (A) determine the
excess (such excess, the "Spread") of (1) the value of the shares of Common
Stock issuable upon the exercise of a Right in accordance with the
foregoing subparagraph (ii) (the "Current Value") over (2) the initial
Purchase Price (as adjusted in accordance with the foregoing subparagraph
(ii)), and (B) with respect to each Right (other than Rights which have
become void pursuant to the foregoing subparagraph (ii)), make adequate
provision to substitute for the shares of Common Stock issuable in
accordance with the foregoing subparagraph (ii) upon exercise of the Right
and payment of the Purchase Price (as adjusted in accordance therewith),
(1) cash, (2) a reduction in such Purchase Price, (3) shares of Preferred
Stock or other equity securities of the Company (including, without
limitation, shares or fractions of shares of preferred stock which, by
virtue of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock, are deemed in good faith
by the Board of Directors to have substantially the same value as the
shares of Common Stock (such shares of Preferred Stock and the shares or
fractions of shares of preferred stock are hereinafter referred to as
"Common Stock equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having a value which, when
added to the value of the
22
<PAGE>
shares of Common Stock actually issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a nationally or
regionally recognized investment banking firm selected in good faith by
the Board of Directors; PROVIDED, HOWEVER, that if the Company shall not
make adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the Flip-In Event (the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, to the
extent permitted by applicable law and any material agreements then in
effect to which the Company is a party, upon the surrender for exercise of
a Right and without requiring payment of such Purchase Price, shares of
Common Stock (to the extent available), and then, if necessary, such number
of fractions of shares of Preferred Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If, upon the occurrence of the Flip-In Event, the
Board of Directors shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, then, if the Board of
Directors so elects, 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 Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, is
herein called the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the second and/or
third sentence of this Section 11(a)(iii),
23
<PAGE>
the Company (x) shall provide, subject to Section 11(a)(ii) hereof and the
last sentence of this Section 11(a)(iii), that such action shall apply
uniformly to all outstanding rights, and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such second
sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the shares of Common
Stock shall be the current per share market price (as determined pursuant
to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per
share or fractional value of any "Common Stock equivalent" shall be deemed
to equal the current per share market price of the Common Stock. The Board
of Directors of the Company may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common Stock upon the
exercise of the Rights, among holders of Rights pursuant to this
Section 11(a)(iii).
(iv) Notwithstanding the foregoing or anything in this Agreement
to the contrary, from and after the time any Person becomes an Acquiring
Person, any Rights that are or were acquired or beneficially owned by such
Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be null and void without any further action, and any holder of such
Rights shall thereafter have no rights
24
<PAGE>
whatsoever with respect to such Rights, whether under this Agreement
(including the right to exercise such Rights under any provision of this
Agreement) or otherwise.
(v) No Right Certificate shall be issued pursuant to Section 3
that represents Rights beneficially owned by an Acquiring Person; no Right
Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person 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 shall be
canceled.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the numerator
of which shall be the number of Preferred Shares and equivalent preferred
shares outstanding on such record date plus the number of Common Shares which
the aggregate offering price of the total number of Preferred Shares and
equivalent preferred shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or
25
<PAGE>
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 and equivalent preferred shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares and equivalent
preferred shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so 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) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular periodic cash dividend paid out
of earnings or retained earnings or a dividend payable in Preferred Shares)
or subscription rights or warrants (excluding those referred to in Section
11(b)
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hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares (determined pursuant
to Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share, and the denominator of which shall be such current per share
market price (determined pursuant to Section 11(d) hereof) of the Preferred
Shares; PROVIDED, HOWEVER, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purposes of
any computation hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any date
shall be deemed to be the average of the daily closing prices per share of
such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that
in the event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into
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such shares, or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security,
taking into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the Nasdaq National Market System or, if the Security is not listed or
admitted to trading on the Nasdaq National Market System, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last quoted
sales price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use or, if on any such date the
Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the Company. If
the Security is not publicly held or so listed or traded, and no market maker
is making, or has made during the relevant period, a market in the Security,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in
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a statement filed with the Rights Agent. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business or,
if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a Preferred Share or share of Common Stock or other share
or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment, or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the Purchase Price and the number of
such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions of this Section 11 with respect to the
Preferred Shares, and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Shares shall apply on like terms to any such other
shares.
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(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (calculated to the
nearest one ten-thousandth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price pursuant to Sections 11(a)(i), 11(b) or 11(c) hereof to
adjust the number of Rights, in substitution for any adjustment in the number
of one one-hundredths of a Preferred Share purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-hundredths of a
Preferred Shares for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number
of Rights shall become that number of Rights (calculated to the nearest
ten-thousandth)
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<PAGE>
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 may, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the
31
<PAGE>
Purchase Price and the number of one-hundredths of a Preferred Share which
were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Preferred Shares or other shares of capital stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Preferred Shares or other such
shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Agreement to the contrary notwithstanding,
in the event that at any time after the date of this Rights Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of a dividend payable in Common
32
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Stock) into a greater or lesser number of Common Stock, then in such case,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter, shall be proportionately
adjusted so that the number of Rights thereafter associated with each share
of Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
(n) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that the Company in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares,
or issuance of rights, options or warrants referred to in Section 11(b)
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(o) Unless a majority of the Disinterested Directors agree in
writing to the contrary, 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 wholly owned Subsidiary of the Company in a transaction
which complies with Section 11(i) hereof), (ii)
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<PAGE>
merge with or into any other Person (other than a wholly owned Subsidiary of
the Company in a transaction which complies with Section 11(i) hereof), (iii)
effect a share exchange with any other Person or conversion of the Company
into another entity (other than with a wholly owned Subsidiary of the Company
in a transaction which complies with Section 11(i) hereof), or (iv) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction
or series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company
and/or any of its wholly owned Subsidiaries in one or more transactions, each
of which complies with the requirements of this Section), if (x) at the time
of or immediately after such consolidation, merger, exchange, conversion or
sale, there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would materially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, or
(y) prior to, simultaneously with or immediately after such consolidation,
merger, exchange, conversion or sale, the stockholders or interest holders of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13 hereof, would have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
Nothing in this Section 11 shall be construed to limit or otherwise restrict
in any manner the rights of redemption contained in Section 22 hereof.
(p) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 22, Section 23 or Section
26 hereof, take (or permit any Subsidiary to take) any action if, at the time
such action is taken, it is reasonably
34
<PAGE>
foreseeable that such action will diminish in any material manner or
otherwise eliminate the benefits intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Preferred
Shares and the Common Shares a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 24 hereof (if so required by Section 24 hereof).
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event, directly or indirectly at any time after the
Flip-In Event, (i) the Company shall consolidate with, merge with and into,
or effect a share exchange or conversion with or into any Person, (ii) any
Person shall merge with and into the Company or effect a share exchange or
conversion with or into the Company, the Company shall be the continuing or
surviving corporation in such transaction and, in connection with such
transaction, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any Person (including the Company)
or cash or any other property, or (iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons other than the
Company or one or more of its wholly owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (A) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right
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<PAGE>
to receive, upon the exercise thereof and payment of the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) in
accordance with the terms of this Agreement and in lieu of Preferred Shares
or Common Stock of the Company, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable Common Shares of the
Principal Party (as defined in Section 13(b) hereof), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as
shall equal the result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of
the then current per share market price of the Common Shares of the Principal
Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such transaction; PROVIDED HOWEVER, that the Purchase Price
(as theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the
number of shares of Common Stock of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof to reflect any events occurring in
respect of the Common Stock of such Principal Party after the occurrence of
such transaction; (B) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of such transaction, all the obligations and duties
of the Company pursuant to this Rights Agreement; (C) the term "Company," as
used in this Rights Agreement, shall thereafter be deemed to mean and refer
to such Principal Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with this Agreement) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares of the Principal Party thereafter deliverable upon the exercise
of the Rights; PROVIDED that,
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<PAGE>
upon the subsequent occurrence of any consolidation, merger, sale or transfer
of assets or other extraordinary transaction in respect of such Principal
Party, each holder of a Right shall thereupon be entitled to receive, upon
exercise of a Right and payment of the Purchase Price as provided in this
Section 13(a), such cash, shares, rights, warrants and other property which
such holder would have been entitled to receive had such holder, at the time
of such transaction, owned the Common Stock of the Principal Party receivable
upon the exercise of a Right pursuant to this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of capital stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property. The Company shall
not consummate any transaction of the type referenced in the first sentence
of this Section 13(a) unless prior thereto the Company and the Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement so providing and further providing that, immediately after the date
of any such transaction mentioned in this paragraph (a) of this Section 13,
the Principal Party at its own expense will (i) prepare and file a
registration statement under the Act with respect to the Rights and any
securities purchasable upon exercise of the Rights on an appropriate form,
will cause such registration statement to become effective as soon as
possible after such filing and will cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until no longer required under the Act with respect to any
securities purchasable upon exercise of the Rights; and (ii) qualify or
register the Rights and any securities purchasable upon exercise of the
Rights, and take all such other action as may be required or as is
appropriate, under the securities or blue sky laws of such jurisdictions as
may be necessary or appropriate. Unless a majority
37
<PAGE>
of Disinterested Directors agree in writing to the contrary, the Company
shall not enter into any transaction of the kind referred to in this Section
13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction, would eliminate
or substantially diminish the benefits intended to be afforded by the Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, exchanges, conversations, sales or other transfers.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii) of
the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the shares of Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer of the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the Person
that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives)
or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or
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<PAGE>
transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets
or earning power cannot be determined, whichever of such Persons as is the
issuer of Common Stock having the greatest aggregate market value of shares
outstanding;
PROVIDED, HOWEVER, that in any such case, (1) if the securities of such
Person are not at such time or have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the securities of
which are and have been so registered, "Principal Party" shall mean such
other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one other Person, the securities of two or more of
which are and have been so registered, "Principal Party" shall mean whichever
of such other Persons is the issuer of the securities so registered having
the greatest aggregate market value; and (3) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more other
Persons that are not owned, directly or indirectly, by a joint venture formed
by two or more other Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in (1) and (2) above shall apply to each
of the chains of ownership having an interest in such joint venture as if
such Person were a "Subsidiary" of both or all of such other Persons and the
Principal Parties in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct and indirect interests in
such Person bear to the total of such interests.
(c) Notwithstanding the foregoing or anything in this Agreement
to the contrary, from and after the time any Person becomes an Acquiring
person, any Rights that
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<PAGE>
are or were acquired or beneficially owned by such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void
without any further action, and any holder of such Rights shall thereafter
have no rights whatsoever with respect to such Rights, whether under this
Agreement (including the right to exercise such Rights under any provision of
this Agreement) or otherwise.
(d) The Company covenants and agrees that it shall not, at any
time after the Flip-In Event, enter into any transaction of the type
described in clauses (i) through (iii) of Section 13(a) hereof if (i) at the
time of or immediately after such consolidation, merger, sale, transfer or
other transaction there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the stockholders
of the Person who constitutes, or would constitute, the Principal Party for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or
(iii) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company may in the discretion of its Board of Directors,
but shall not be required to, issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Board of Directors, in its discretion, may direct the
Company to pay to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount
in cash equal
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<PAGE>
to the same fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would otherwise be
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 Nasdaq National Market
System, or, if the rights are not listed or admitted to trading on the Nasdaq
National Market System, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board of Directors of the Company shall be used to determine the
current market value of a Right for purposes of this Section 14(a).
Notwithstanding anything in this Section 14(a) to the contrary, prior to the
Distribution Date, the current market value of the Right for purposes of this
Section 14(a) shall for all purposes hereof be deemed to be zero.
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<PAGE>
(b) The Company may in the discretion of its Board of Directors,
but shall not be required to, issue fractional interests in Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or distribute certificates which
evidence fractional interests in Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred Share). In lieu
of fractional interests in Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Board of Directors may, in its
discretion, direct the Company to pay to the registered holders of Right
Certificates, at the time such Rights are exercised as herein provided, an
amount in cash equal to the same fraction of the current market value of one
Preferred Share. In fractions of Preferred Shares in integral multiples of
one one-hundredths 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 the depositary selected by it; PROVIDED, that such
agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. For purposes of this Section 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
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SECTION 15. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares of the
Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name any Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
Common Shares certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
SECTION 16. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or other distributions or be deemed for any purpose the holder of
the Preferred Shares or interests therein or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to
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any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in this Agreement), or to receive
dividends or subscription rights, or otherwise, or to exercise preemptive
rights (if any), until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
SECTION 17. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom.
The Rights Agent shall be protected and shall incur no liability for, or
in respect of, any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 19 hereof.
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SECTION 18. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 20 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned, and in case at that
time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior
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name or in its changed name; and in all such case Certificates shall have the
full forces provided in the Right Certificates and in this Agreement.
SECTION 19. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board of Directors, President, any Vice President, the
Secretary or the Treasurer of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for the Rights Agent's own gross negligence, bad faith
or willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including any Rights that become void pursuant
to Section 11(a)(iii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 3,
11, 13, 22 or 23 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice that
such change or adjustment is required); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board of Directors, President, any Vice President,
the Secretary or the Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in acting while
waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company (including,
without limitation, acting as transfer agent for the Common Shares of the
Company) or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or power hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
SECTION 20. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in
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writing mailed to the Company and to each transfer agent of the Common Shares
or Preferred Shares by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares or the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to the Rights Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation or
entity, or an affiliate of such a corporation or entity, organized and doing
business under the laws of the United States or of the States of New York or
South Dakota (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the
State of New York or the State of South Dakota), 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 and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and
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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 the
predecessor Rights Agent 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 the Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 20, 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 21. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
SECTION 22. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of
Directors of the Company at such time, on such basis and with (or without)
such conditions as the Board of Directors in its sole and absolute discretion
may establish. Notwithstanding anything contained or which may be implied in
this Agreement to the contrary, the Rights shall not
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be exercisable after any Person becomes an Acquiring Person until such time
as the Company's rights of redemption hereunder shall have finally expired.
(b) The Board of Directors of the Company may, at its option and
in its sole and absolute discretion, at any time prior to the close of
business on the tenth Business Day after the Shares Acquisition Date, redeem
all, but not less than all, the then outstanding Rights at a redemption price
of $0.001 (one-tenth of one cent) per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). The redemption of the Rights may be made effective
at such time, on such basis and with (or without) such conditions as the
Board of Directors in its sole and absolute discretion may establish;
PROVIDED, HOWEVER, that with respect to any redemption of Rights under either
of the circumstances set forth in clauses (i) and (ii) below, the Rights may
be redeemed only if there are Disinterested Directors then in office and the
Board of Directors of the Company, with the concurrence of a majority of the
Disinterested Directors then in office, approve such redemption; (i) such
approval occurs at any time after any Person becomes an Acquiring Person, or
(ii) such approval occurs at any time after a change (resulting from a proxy
solicitation or from a vote of stockholders or in any other manner) in a
majority of the directors in office at the commencement of such solicitation,
or prior to such vote, if any Person who is a participant in such
solicitation or vote has stated (or, if the majority of the directors in
office at the commencement of such solicitation or prior to such vote has
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take or may consider taking, any action that would
result in such Person becoming an Acquiring Person or that would result in
the occurrence of an event described in Section
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11(a)(ii) hereof. The Company may, at its option, pay the Redemption Price
in cash, in Common Shares (based on the current per share market price of the
Common Shares at the time of redemption determined pursuant to Section 11(d)
hereof) or any other form of consideration deemed appropriate by the Board of
Directors of the Company; PROVIDED that if the Company elects to pay the
Redemption Price in Common Shares, the Company shall not be required to issue
fractional Common Shares and the number of Common Shares issuable to each
holder of Rights shall be rounded down to the next whole shares.
(c) "Disinterested Director" shall mean (i) any member of the
Board of Directors of the Company who is not an officer or employee of the
Company or any of its Subsidiaries and who is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, or (ii) any successor to a
director meeting the requirements of clause (i) of this sentence (a "Prior
Director") if such successor is a member of the Board of Directors of the
Company who is not an officer or employee of the Company or any of its
Subsidiaries and who is not an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or a nominee or representative of an Acquiring Person
or of any such Affiliate or Associate, and who was recommended for election
or elected to succeed the Prior Director by a majority of the Disinterested
Directors then on the Board of Directors of the Company.
(d) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (b) of
this Section 22, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect
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the validity of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights pursuant to
paragraph (b), the Company shall mail a notice of redemption to all the
holders of the then outstanding Rights at their addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares of the
Company. 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.
SECTION 23. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after the Flip-In Event, exchange all or any part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof) 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 of such Flip-In Event (such amount per Right being hereinafter
referred to as the "Exchange Consideration"); PROVIDED, HOWEVER, that with
respect to any such action by the Board of Directors as to such an exchange,
the Rights may be so exchanged only if (i) there are Disinterested Directors
then in office, and (ii) the Board of Directors of the Company approves such
exchange with the concurrence of a majority of the Disinterested Directors
then in office. From and after the occurrence of an event specified in
Section 13(a) hereof, any Rights that theretofore have not been exchanged
pursuant to this Section 23(a) shall thereafter be exercisable only in
accordance with Section 13 and may not be exchanged pursuant to this Section
23(a).
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(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 23 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive the Exchange Consideration. 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 shall promptly mail a
notice of any such exchange to all of the holders of such Rights at their
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder
of Rights.
(c) Notwithstanding anything in this Section 23 to the contrary,
in the event there shall not be sufficient authorized but unissued Common
Shares to permit the exchange in full of the Rights as provided in paragraph
(a) of this Section 23, then, in such case, to the extent of such
insufficiency, each Rights Certificate shall entitle the holder thereof to
exchange each Right for the number of Common Shares equal to a fraction, (i)
the numerator of which shall be the number of Common Shares authorized as of
the Distribution Date, less: (A) the number of Common Shares issued and
outstanding as of the Distribution Date, (B) the number of Common Shares
reserved for issuance pursuant to
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stock options, warrants, and other rights to purchase Common Shares from the
Company outstanding on the Distribution Date, and (C) the number of Common
Shares reserved for issuance by the Company under convertible debentures,
preferred stock, or other securities outstanding on the Distribution Date and
convertible into or exchangeable for Common Shares; and (ii) the denominator
of which shall be the number of Common Shares issued and outstanding as of
the Distribution Date, less Common Shares of which an Acquiring Person is the
Beneficial Owner.
(d) The Company may, but need not be required to, issue fractions
of Common Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the Company may pay
to the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Common Share.
For the purpose of this paragraph (d), the current market value of a whole
Common Share of the Company shall be the closing price of a Common Share of
the Company (as determined pursuant to the second and third sentences of
Section 11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 23.
SECTION 24. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred Shares (other
than a regular periodic cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights
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or options, (iii) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger into or with,
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% of more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, 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 25 hereof, a notice of such proposed action, which
shall specify the record date for purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares if any
such date is to be fixed, and such notice shall be so given in the case of
any action described by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of the Common Shares and/or Preferred
Shares for purposes of such action, and in the case of any such other action,
at least 10 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) or Section
13 shall occur, then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, in accordance with Section 25 hereof,
a notice of the occurrence of such event, which notice shall describe the
event and the consequences of the event to holders of Rights under Section
11(a)(ii) and Section 13 hereof.
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SECTION 25. 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:
HF Financial Corp.
225 South Main Street
Sioux Falls, South Dakota 57102
Attention: Chief Financial Officer
Subject to the provisions of Section 20 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.P.
Shareowner Services Department
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Manager, Administrations
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 26. CHANGES, DELETIONS, SUPPLEMENTS AND AMENDMENTS. For so long
as the Rights are then redeemable, the Company in its sole and absolute
discretion may (and the Rights Agent shall at the direction of the Company)
from time to time change, supplement
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or amend this Agreement in any respect without the approval of any holders of
Right Certificates. At any time when the Rights are no longer redeemable,
the Company may, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of
Rights Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) change, delete or supplement any of the
provisions hereof in any manner which the Company may deem necessary or
desirable (including, but without any limitation, changing (x) the percentage
of ownership of Common Shares at which a Person becomes an Acquiring Person,
(y) the definition of Distribution Date, (z) the time for or manner of
redemption of Rights or (aa) the time for, or limits on, amendment of this
Agreement); PROVIDED that no such change shall adversely affect the interests
of the holders of the Rights as such (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, in whose hands all Rights are
void).
SECTION 27. 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 28. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares of the Company) any legal or equitable
right, remedy or claim under this Agreement; and this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and
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the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares of the Company).
SECTION 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, HOWEVER, that notwithstanding the foregoing, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors of
the Company, with the concurrence of the majority of the Disinterested
Directors then in office, determines in its good faith judgment that severing
the invalid language from this Agreement would materially and adversely
affect the purpose and effect of this Agreement, the right of redemption set
forth in Section 22 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination
by the Board of Directors.
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. For
all purposes of this Agreement, Common Shares shall be deemed outstanding
when and as actually issued by the Company, but shall not include Common
Shares reacquired by the Company in any manner, whether held as treasury
shares or canceled. The calculation for the purpose of determining the
particular percentage of the outstanding Common Shares of which any Person is
the Beneficial Owner shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board of Directors of the Company (with, where specifically
provided for herein, the concurrence of the Disinterested Directors) shall
have the exclusive power and authority to administer
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this Agreement and to exercise all rights and powers specifically granted to
the Board of Directors (with, where specifically provided for herein, the
concurrence of the Disinterested Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing)
that are done or made by the Board of Directors (with, where specifically
provided for herein, the concurrence of the Disinterested Directors) in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other Persons, and (y) not subject
the Board of Directors or the Disinterested Directors to any liability to the
holders of the Rights.
SECTION 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State without giving effect to the conflicts
of law provisions thereof.
SECTION 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but
one and the same instrument.
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SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
[This space intentionally left blank]
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Attest: HF FINANCIAL CORP.
By illegible By /s/ Curtis L. Hage
--------------------------- --------------------------------
Name: Curtis L. Hage
Title: Chief Executive Officer
Attest: CHASEMELLON SHAREHOLDER SERVICES, L.L.P.
By illegible By /s/ Thomas Watt
--------------------------- --------------------------------
Name: Its: Vice President
Title: --------------------------------
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EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
HF FINANCIAL CORP.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
________
HF Financial Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called 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 October
23, 1996:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Restated
Certificate of Incorporation, as amended, the Board of Directors hereby
creates a series of 50,000 shares of Preferred Stock, designated as "Series A
Junior Participating Preferred Stock," par value $1.00 per share, of the
Corporation and hereby states the designation and number of shares, and the
relative rights, preferences, and limitations thereof (in addition to any
provisions set forth in the Restated Certificate of Incorporation of the
Corporation, which are applicable to the Preferred Stock of all classes and
series) shall be in substantially the form of the Certificate of Designations
of Series A Junior Participating Preferred Stock in the form attached (as
follows):
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. DESIGNATION AND AMOUNT. There shall be a series of Preferred Stock
that shall be designated as "Series A Junior Participating Preferred Stock"
(the "Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 50,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; PROVIDED,
that no decrease shall reduce the number of shares of Series A Preferred
Stock to a number less than the number of shares then issued and outstanding
plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series A
Preferred Stock. Shares of Series A Preferred shall
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have a stated value of $1.00 per share. Until when, as and if issued and
outstanding, no shares of Series A Preferred shall have any rights or
preferences of any kind.
2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock or any similar stock ranking prior
and superior to the Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock, in preference to the holders
of shares of any class or series of stock of the Corporation ranking junior
to the Series A Preferred Stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of March,
June, October and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1, or (b) the
Adjustment Number (as defined below) times the aggregate per share amount
of all cash dividends, and the Adjustment Number times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), 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. The "Adjustment Number" shall
initially be 100. In the event the Corporation shall at any time after
October 23, 1996 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 Adjustment Number in effect immediately
preceding such event shall be adjusted by multiplying such Adjustment
Number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock).
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case
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dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than
30 days prior to the date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
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:
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(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4 purchase or otherwise acquire such shares at such
time and in such manner.
5. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. The Corporation
shall cause all such shares upon their cancellation to become authorized but
unissued shares of Preferred Stock which may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Restated Certificate of Incorporation, in any other
Certificate of Designation establishing a series of Preferred Stock or any
similar stock or as otherwise required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made
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to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Series A Junior Participating Preferred Stock shall have received $100.00 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by (ii) the
Adjustment Number. Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of (1) Series A Junior Participating Preferred Stock and
(2) Common Stock, respectively, (a) holders of Series A Junior Participating
Preferred Stock and (b) holders of shares of Common Stock shall, subject to
the prior rights of all other series of Preferred Stock, if any, ranking
prior thereto, receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with
respect to (x) the Series A Junior Participating Preferred Stock and (y) the
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if
any, that rank on a parity with the Series A Junior Participating Preferred
Stock, then such remaining assets shall be distributed ratably to the holders
of such party shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this
Section 6.
7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
8. NO REDEMPTION. The shares of Series A Preferred Stock shall not be
redeemable after issuance.
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9. RANK. The Series A Preferred Stock shall rank junior with respect to
the payment of dividends and the distribution of assets to all series of the
Corporation's Preferred Stock or any similar stock that specifically provide
that they shall rank prior to the Series A Preferred Stock. Nothing herein
shall preclude the Board from creating any series of Preferred Stock or any
similar stock ranking on a parity with or prior to the Series A Preferred
Stock as to the payment of dividends or the distribution of assets.
10. AMENDMENT. The Restated Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single series.
11. FRACTIONAL SHARES. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that 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 Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed in its name by the undersigned, thereunto duly authorized, this 23rd
day of October, 1996.
HF FINANCIAL CORP.
By: _______________________________
Its: ______________________________
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EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R. _________________ _________ Rights
NOT EXERCISABLE AFTER OCTOBER 22, 2006, OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $ 0.001 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
HF FINANCIAL CORP.
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 October 23,
1996, (the "Rights Agreement"), between HF Financial Corp., a Delaware
corporation (the "Company"), and ChaseMellon Shareholder Services, L.L.P.
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to the close of business (as defined in the Rights Agreement) on October 22,
2006, at the principal offices of the Rights Agent, or at the offices of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, $1.00 par value (the
"Preferred Shares") of the Company, at a purchase price of $65 (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
As described in the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person shall become null and void.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor.
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This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificate of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
interests in Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $0.001 (one-tenth of one cent) per Right payable in cash, in Common Shares
or other consideration, or (ii) may be exchanged in whole or in part for
Common Shares.
Fractional interests in Preferred Shares may, but need not, be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof a cash payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate actions, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ____________, _____.
ATTEST: HF FINANCIAL CORP.
____________________________________
Countersigned: By __________________________
Its _________________________
CHASEMELLON SHAREHOLDER
SERVICES, L.L.P.
By __________________________
Its _________________________
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<PAGE>
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________ hereby sells,
assigns and transfers unto __________________________________________________
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 Guarantee:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
________________________________________________________________________________
(To be completed)
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) and that after due
inquiry and to the best of the knowledge of the undersigned, it did not acquire
the Rights evidenced by this Rights Certificate for any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of such
Person.
___________________________________
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: HF Financial Corp.
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
securities or property) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or such other securities) be issued
in the name of:
_____________________________________________
_____________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
______________________________________________
______________________________________________
(Please print name and address)
Please provide Social Security or other tax identification number:
____________________
Dated:_______________, _____.
____________________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guarantee:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States acceptable to the Rights Agent and the Company.
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<PAGE>
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE -- CONTINUED
________________________________________________________________________________
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) and that after due
inquiry and to the best of the knowledge of the undersigned, it did not acquire
the Rights evidenced by this Rights Certificate for any Person who is, was or
subsequently became an Acquiring Person or Affiliate or Associate of such
Person.
___________________________________
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 alternation or enlargement or any change whatsoever.
In the event the certificate 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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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On October 23, 1996, the Board of Directors of HF Financial Corp. (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of Common Stock, par value $ .01 per share (the
"Common Shares"), of the Company. The dividend is payable to the stockholders
of record on November 13, 1996 (the "Record Date"). Each Right will entitle the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, $1.00 stated value (the
"Preferred Shares") at a price of $65 per one one-hundredth of a Preferred Share
(the "Purchase Price"), subject to adjustment. The complete terms of the Rights
are set forth in a Rights Agreement, as may be amended from time to time (the
"Rights Agreement") between the Company and ChaseMellon Shareholder Services,
L.L.P., as Rights Agent (the "Rights Agent").
The Rights become exercisable on the first date after the Distribution
Date, and not before. Until the Distribution Date, the Rights will be
evidenced, with respect to any Common Share certificate outstanding as of the
Record Date, by such Common Share certificate together with a copy of this
Summary of Rights attached thereto.
The Distribution Date is defined as the earlier to occur of (i) ten
business days following a public announcement that a person or group of
affiliated or associated persons (not including the Company, any subsidiary of
the Company, any Person holding Common Shares acquired in a transaction approved
in advance in writing by a majority of the Disinterested Directors of the Board
of Directors of the Company, any employee benefit plan of the Company or its
subsidiaries or any entity holding Common Shares for or pursuant to any such
plan, and any person who beneficially owns 10% or more of the Common Shares
outstanding on the 20th day preceding the Record Date, to the extent of such
ownership) has acquired beneficial ownership of 20% or more of the outstanding
Common Shares (an "Acquiring Person"), or (ii) ten business days following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group (not including the Company, any subsidiary of the
Company, any Person holding Common Shares acquired in a transaction approved in
advance in writing by a majority of the Disinterested Directors of the Board of
Directors of the Company, any employee benefit plan of the Company or its
subsidiaries or any entity holding Common Shares for or pursuant to any such
plan, and any person who beneficially owns 10% or more of the Common Shares
outstanding on the 20th day preceding the Record Date, to the extent of such
ownership) of 20% or more of such outstanding Common Shares.
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, exchange or expiration of the Rights),
new Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a
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notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or 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 such separate Right Certificates alone will
evidence the Rights.
The Rights will expire on October 22, 2006 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the issuance of certain rights, options or warrants to
subscribe for or purchase Preferred Shares at a price, or securities convertible
into Preferred Shares, with a conversion price less than the then current market
price of the Preferred Shares, or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Preferred Shares) or of subscription rights or warrants (other than
those referred to above). The number of outstanding Rights is also subject to
adjustment in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 100 times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
Preferred Stock will be entitled to a minimum preferential liquidation payment
of $100 per share (plus any accrued but unpaid dividends) but will be entitled
to an aggregate payment of 100 times the payment made per share of Common Stock
(subject to certain restrictions). Each share of Preferred Stock will have 100
votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
converted or exchanged, each share of Preferred Stock will be entitled to
receive 100 times the amount received per share of Common Stock. These rights
are protected by customary antidilution provisions.
In the event any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the
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Acquiring Person (which will thereupon become void), will thereafter have the
right to receive upon exercise of a Right at the then-current exercise price
of the Right, that number of shares of Common Stock having a market value of
two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise thereof at the then-
current exercise price of the Right, that number of shares of common stock of
the person with whom the Company has engaged in the foregoing transaction (or
its parent), which number of shares at the time of such transaction will have a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the earlier of one of the events described in the previous paragraph or the
acquisition by such person or group of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, for shares of Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depository
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the close of business on the tenth business day after
a Share Acquisition Date, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $0.001 per right (the
"Redemption Price") which may be paid in cash or with Common Shares or other
consideration deemed appropriate by the Board of Directors of the Company.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
For so long as the Rights are then redeemable, the Company may, except with
respect to the redemption price, amend the Rights in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
redemption price, amend the Rights in any manner that does not adversely affect
the interests of holders of the Rights.
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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.
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 hereby
incorporated herein by reference.
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EXHIBIT 2
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[HF FINANCIAL CORP. LETTERHEAD]
_______ __, 1996
To Our Stockholders:
Today your Board of Directors adopted a Shareholder Rights Plan. Copies of the
press release and detailed summary of the Rights Plan are enclosed.
The Plan is designed to protect our stockholders against certain coercive,
unfair or inadequate takeover attempts. The Rights Plan is not intended to
prevent an acquisition of HF Financial Corp. in which all of our stockholders
are offered a fair price for all of their shares. In this connection, at this
time we have no indication that any third party is interested in acquiring HF
Financial Corp.
The Rights are being issued to stockholders of record at the close of business
on November 13, 1996, and they expire on October 22, 2006. Because the Rights
are not immediately exercisable, it is not necessary to send you a separate
certificate for the Rights. The Rights will automatically trade with HF
Financial Corp.'s Common Stock. However, ten business days after a public
announcement that a person has acquired 20% or more of HF Financial Corp.'s
Common Stock or ten business days following commencement of, or announcement of
an intention to make, a tender offer that would result in the acquisition by a
person or group of 20% or more of HF Financial Corp.'s Common Stock, the Rights
will become exercisable and separate certificates representing the Rights will
be distributed to HF Financial Corp.'s stockholders.
The Rights do not interfere with HF Financial Corp.'s business plans or affect
its financial position. The issuance of the Rights has no dilutive effect, will
not affect earnings per share, is not taxable to you or HF Financial Corp., and
will not change the way in which HF Financial Corp.'s Common Stock is traded on
the Nasdaq National Market System. Depending on individual circumstances,
stockholders may recognize taxable income, but only when (and if) the Rights
become exercisable or upon the occurrence of certain events thereafter.
In adopting the Plan, your Board of Directors has expressed its confidence in
the future and its determination that you, our stockholders, be given every
opportunity to participate fully in the future of HF Financial Corp.
Sincerely,
Curtis L. Hage
Chief Executive Officer
Enclosures
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HF FINANCIAL CORP.
FOR
IMMEDIATE RELEASE CONTACT: DONALD F. BERTSCH
CHIEF FINANCIAL OFFICER
(605) 333-7556
HF FINANCIAL CORP. ADOPTS
SHAREHOLDER RIGHTS PLAN
SIOUX FALLS, SOUTH DAKOTA - October 23, 1996.
The board of directors of HF Financial Corp. (Nasdaq: HFFC) has adopted a
Shareholder Rights Plan (the "Plan"). The Plan is designed to enable HF
Financial Corp. and its board of directors to develop and preserve long term
values for stockholders and to protect stockholders in the event an attempt is
made to acquire control of HF Financial Corp. through certain coercive or unfair
tactics or without an offer of fair value to all stockholders.
The Plan provides for a distribution of a purchase right to each
shareholder of record of the Company's Common Stock on November 13, 1996. Under
this Plan, these rights to purchase preferred shares will be exercisable if a
person or group acquires or announces an intention to acquire 20% or more of the
Company's Common Stock. Each right entitles the holder, after the rights become
exercisable, to receive Company common stock having a market value of the two
times the exercise price of the Right or securities of the acquiring entity at
one-half their market value at that time.
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HF Financial Corp. reported $554 million in total assets as of September
30, 1996. HF Financial Corp. is the holding company for the Sioux Falls, South
Dakota-based Home Federal Savings Bank and the Omaha, Nebraska-based HF Mortgage
Corp.
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