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
ANCHOR BANCORP WISCONSIN INC.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1726871
- ---------------------------------------- ---------------------------------
(State of incorporation or organization) (IRS Employer Identification No.)
25 WEST MAIN STREET, MADISON, WISCONSIN 53703
---------------------------------------------
(Address of principal executive offices)
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ] [Added in Release No. 34-34922 (P.85,450), effective
December 7, 1994, 59 F.R. 55342.]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ] [Added in Release
No.34-34922 (P. 85,450), effective December 7, 1994, 59 F.R. 55342.]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
None N/A
Securities to be registered pursuant to Section 12(g) of the Act:
SERIES A PREFERRED STOCK PURCHASE RIGHTS
----------------------------------------
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered
-------------------------------------------------------
On July 22, 1997, the Board of Directors of Anchor BanCorp Wisconsin
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, par value $0.10 per share (a "Common Share"),
of the Company to stockholders of record at the close of business on August 1,
1997 (the "Record Date"). Except as set forth below, each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Preferred Stock, par value $0.10 per share ("Series A Shares"), at a
price of $200.00 (the "Purchase Price"), subject to adjustment. The Purchase
Price shall be paid in cash. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company and
Firstar Trust Co., as Rights Agent.
Initially, no separate Right Certificates will be distributed. Until
the earlier to occur of (a) 10 business days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding Common Shares or (b) 15 business days following
the commencement of a tender offer or exchange offer if, upon consummation
thereof, a person or group would be the beneficial owner of 20% or more of such
outstanding Common Shares (the earlier of such dates, subject to extension as
provided in the Rights Agreement, being called the "Separation Date"), the
Rights will be evidenced, with respect to any Common Shares outstanding as of
the Record Date, by the certificates representing such Common Shares. The Rights
Agreement provides that, until the Separation Date, the Rights will be
transferred with, and only with, Common Share certificates. From as soon as
practicable after the Record Date and until the Separation Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Separation Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificates. As soon as practicable
following the Separation 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 Separation Date and, thereafter, such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Separation Date and will
expire on July 22, 2007, unless earlier redeemed by the Company as described
below.
In the event that, at any time following the Separation Date, (a)
the Company is the surviving corporation in a merger with an Acquiring Person
and the Company's Common Shares are not changed or exchanged, (b) a person
(other than
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3
the Company and its affiliates) becomes the beneficial owner of 25% or more of
the then outstanding Common Shares, (c) an Acquiring Person engages in one or
more "self-dealing" transactions as set forth in the Rights Agreement or (d)
during such time as there is an Acquiring Person, an event occurs that results
in such Acquiring Person's ownership interest being increased by more than one
percent (e.g., a reverse stock split), the Rights Agreement provides that proper
provision shall be made so that each holder of a Right will thereafter be
entitled to receive, upon exercise, Common Shares (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right.
In the event that, at any time following the first date of public
announcement by the Company or an Acquiring Person indicating that an Acquiring
Person has become such (the "SHARES ACQUISITION DATE"), (a) the Company engages
in a merger or other business combination transaction in which the Company is
not the surviving corporation, (b) the Company engages in a merger or other
business combination transaction with another person in which the Company is the
surviving corporation, but in which its Common Shares are changed or exchanged
or (c) 50% or more of the Company's assets or earning power is sold or
transferred, the Rights Agreement provides that proper provision shall be made
so that each holder of a Right shall thereafter have the right to receive, upon
the exercise thereof at the then current exercise price of the Right, common
shares of the acquiring company having a value equal to two times the exercise
price of the Right.
The Board may, at its option, at any time after the right of the
Board to redeem the Rights has expired or terminated (with certain exceptions),
exchange all or part of the then outstanding and exercisable Rights (other than
those held by the Acquiring Person and Affiliates and Associates of the
Acquiring Person) for Common Shares at a ratio of one Common Share per Right, as
adjusted; PROVIDED, HOWEVER, that such Right cannot be exercised once a Person,
together with such Person's Affiliates and Associates, becomes the owner of 50%
or more of the Outstanding Common Shares. If the Board authorizes such an
exchange, the Rights will immediately cease to be exercisable.
Notwithstanding any of the foregoing, following the occurrence of
any of the events set forth in the fourth and fifth paragraphs of this Summary,
any Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person shall immediately
become null and void.
The Purchase Price payable, and the number of Series A Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (a) in the event of a
dividend of Series A Shares on, or a subdivision, combination or
reclassification of, the Series A Shares, (b) upon the grant to holders of the
Series A Shares of certain rights or warrants to subscribe for Series A Shares
or securities convertible into Series A Shares at less than the current market
price of the Series A Shares or (c) upon the dis-
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4
tribution to holders of the Series A Shares of debt securities or assets
(excluding regular quarterly cash dividends and dividends payable in Series A
Shares) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares that are not integral multiples of one
one-hundredth of a Series A Share will be issued and, in lieu thereof, an
adjustment in cash will be made based on the closing price of the Series A
Shares on the last trading date prior to the date of exercise.
At any time after the date of the Rights Agreement until 10 Business
Days following the Shares Acquisition Date, unless the period for redemption is
extended as provided in the Rights Agreement, the Board of Directors of the
Company (the "Board"), with the concurrence of a majority of the Independent
Directors (those members of the Board who are not officers or employees of the
Company or of any Subsidiary of the Company and who are not Acquiring Persons or
their Affiliates, Associates, nominees or representatives, and who either (a)
were members of the Board prior to the adoption of the Rights Plan or (b) were
subsequently elected to the Board and were recommended for election or approved
by a majority of the Independent Directors then on the Board), may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right, subject to
adjustment (the "Redemption Price"). Thereafter, the Board may only redeem the
Rights in certain specified circumstances including in connection with certain
events not involving an Acquiring Person or an Affiliate or Associate of an
Acquiring Person. In addition, the Company's right of redemption may be
reinstated if (a) an Acquiring Person reduces its beneficial ownership to 10% or
less of the outstanding Common Shares in a transaction or series of transactions
not involving the Company and (b) there is at such time no other Acquiring
Person. The Rights Agreement may also be amended, as described below, to extend
the period of redemption. Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will no longer be exercisable, except upon
the occurrence of certain events that have the effect of deferring the effective
time of the redemption. In general, thereafter 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 shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to shareholders or to the Company, shareholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Shares (or other consideration) of the Company or
for common shares of the Acquiring Person as set forth above.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the
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Board with the concurrence of a majority of the Independent Directors or by
special approval of the stockholders of the Company prior to the Separation
Date. Thereafter, the period during which the Rights may be redeemed may be
extended (by action of the Board, with the concurrence of a majority of the
Independent Directors or by special approval of the stockholders of the
Company), and other provisions of the Rights Agreement may be amended by action
of the Board with the concurrence of a majority of the Independent Directors or
by special approval of the shareholders of the Company; PROVIDED, HOWEVER, that
(a) such amendment will not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person) and (b) no amendment shall be
made at such time as the Rights are no longer redeemable (except for the
possibility of the right of redemption being reinstated as described above).
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as exhibits the Articles of
Amendment setting forth the terms of the Series A Preferred Stock, the form of
Right Certificate and the Summary of Rights to Purchase Series A Preferred
Stock, is attached hereto as an exhibit and incorporated herein by reference.
The foregoing description of the Rights is qualified by reference to such
exhibit.
Item 2. Exhibits.
--------
1. Rights Agreement dated as of July 22, 1997 between Anchor
BanCorp Wisconsin Inc. and Firstar Trust Company, as Rights
Agent, which includes as Exhibit A the Articles of Amendment
setting forth the terms for the Series A Preferred Stock, as
Exhibit B the form of Right Certificate and as Exhibit C the
Summary of Rights to Purchase Series A Preferred Stock.
Pursuant to the Rights Agreement, Right Certificates will not
be mailed until as soon as practicable after the earlier of
the tenth business day after public announcement that a person
or group has acquired beneficial ownership of 20% or more of
the Common Stock or the fifteenth business day after a person
commences, or announces an intention to commence, a tender or
exchange offer the consummation of which would result in a
person beneficially owning 20% or more of the Common Stock.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
ANCHOR BANCORP WISCONSIN INC.
By /s/ J. Anthony Cattelino
-----------------------------------
J. Anthony Cattelino
Vice President and Secretary
Date: July 24, 1997
EXHIBIT 1
=======================================
RIGHTS AGREEMENT
between
ANCHOR BANCORP WISCONSIN INC.
and
FIRSTAR TRUST CO.
Dated: As of July 22, 1997
=======================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<S> <C>
Section 1. Certain Definitions.......................................................1
Section 2. Appointment of Rights Agent...............................................5
Section 3. Issue of Right Certificates...............................................5
Section 4. Form of Right Certificates................................................7
Section 5. Countersignature and Registration.........................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.......................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.............9
Section 8. Cancellation and Destruction of Right Certificates.......................11
Section 9. Reservation and Availability of Series A Shares; Registration............12
Section 10. Series A Shares Record Date. ..........................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights.......................................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares..............22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
............................................................................23
Section 14. Fractional Rights and Fractional Shares.................................25
Section 15. Rights of Action........................................................26
Section 16. Agreement of Right Holders..............................................27
Section 17. Right Certificate Holder Not Deemed a Shareholder.......................27
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
Section 18. Concerning the Rights Agent.............................................28
Section 19. Merger or Consolidation or Change of Name of Rights Agent...............28
Section 20. Duties of Rights Agent..................................................29
Section 21. Change of Rights Agent..................................................31
Section 22. Issuance of New Right Certificates......................................32
Section 23. Redemption..............................................................32
Section 24. Exchange...............................................................33
Section 25. Notice of Certain Events................................................35
Section 26. Notices.................................................................36
Section 27. Supplements and Amendments..............................................36
Section 28. Successors..............................................................37
Section 29. Determinations and Actions by the Board of Directors....................37
Section 30. Benefits of this Agreement..............................................38
Section 31. Severability............................................................38
Section 32. Governing Law...........................................................38
Section 33. Consequential Damages...................................................38
Section 34. Counterparts............................................................39
Section 35. Descriptive Headings....................................................39
</TABLE>
ii
<PAGE>
RIGHTS AGREEMENT
Rights Agreement, dated as of July 22, 1997, between ANCHOR BANCORP
WISCONSIN INC., a Wisconsin corporation (the "COMPANY"), and FIRSTAR TRUST CO.,
a Wisconsin corporation (the "RIGHTS AGENT").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred stock purchase right (a "RIGHT") for each Common Share
(as hereinafter defined) of the Company outstanding at the close of business on
August 1, 1997 (the "RECORD DATE"), each Right representing the right to
purchase one one-hundredth (1/100) of a share of Series A Preferred Stock, par
value $0.10 per share, of the Company ("SERIES A PREFERRED STOCK") having the
rights and preferences set forth in the form of Articles of Amendment in respect
of Series A Preferred Stock, a copy of which is attached hereto as EXHIBIT A.
The Board of Directors has further authorized the issuance of one Right with
respect to each Common Share that shall become outstanding (whether originally
issued or delivered from the Company's treasury) after the Record Date and on or
prior to the earliest of the Separation Date, the Redemption Date and the Final
Expiration Date (each as hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who, together
with all Affiliates and Associates of such Person, shall hereafter become the
Bene ficial Owner of twenty percent (20%) or more of the Common Shares then out
standing, but shall not include the Company, any wholly owned Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "RULES") under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), as in effect on the Record Date.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "BENEFICIALLY OWN" any securities:
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(i) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, 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) or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise;
PROVIDED, HOWEVER, that a Person shall not be deemed to be 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; and PROVIDED FURTHER, that a Person
shall not be deemed to be the Beneficial Owner of, or to beneficially own,
securities that such Person has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) upon the
exercise of conversion rights conferred in any class or series of
Preferred Stock, par value $0.10 per share, of the Company issued prior to
the Separation Date if the resolutions of the Board providing for the
issuance of such class or series of Preferred Stock shall specifically
refer to this Rights Agreement and provide that the right to acquire
securities upon the exercise of conversion rights so conferred shall not
be deemed to constitute beneficial ownership of such securities.
(ii) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or dispose
of, or of which any of them, directly or indirectly, has "beneficial
ownership" (as determined pursuant to Rule 13d-3 of the Rules, as in
effect on the Record Date) (including pursuant to any agreement,
arrangement or understanding, whether or not in writing); PROVIDED,
HOWEVER, that a Person shall not be deemed to be the Beneficial Owner of,
or to beneficially own, any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such security
if such agreement, arrangement or under standing arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the Rules, unless such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or Associates)
has any agreement, arrangement or understanding (whether or not in
writing), for the purpose of, or with respect to, acquiring, holding,
voting (except as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the Company;
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PROVIDED, HOWEVER, that nothing in this paragraph (c) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of or to "benefi cially own" any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(d) "BOARD" means the Board of Directors of the Company.
(e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in Madison, Wisconsin or New
York, New York are authorized or obligated by law or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00
P.M., Madison, Wisconsin time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., Madison, Wisconsin time, on
the next succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the Company
shall mean shares of Common Stock, par value $0.10 per share, of the Company.
"COMMON SHARES" or "COMMON SHARES," when used with reference to any Person other
than the Company, shall mean the capital stock of such Person with the greatest
voting power or the equity securities or other equity interest having power to
control or direct the management of such Person.
(h) "INDEPENDENT DIRECTOR" shall mean (i) any member of the
Board who is not an officer or employee of the Company or of any Subsidiary of
the Company 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 a member of the Board prior to the
time any Person became an Acquiring Person and (ii) any successor to a member of
the Board who was a member of the Board prior to the time any Person became an
Acquiring Person, but only if such successor (x) is not an officer or employee
of the Company or any Subsidiary of the Company and is not an Acquiring Person
or an Affiliate or Associate of an Acquiring Person or a nominee or
representative of an Acquiring Person or any such Affiliate or Associate and (y)
was recommended for election or elected to succeed such member of the Board by a
majority of the Independent Directors then on the Board.
(i) "PERSON" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity and shall include any
successor (by merger or otherwise) of such entity.
(j) "SECTION 11(A)(II) EVENT" shall mean any event described
in Section 11(a)(ii)(A), (B) or (C).
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4
(k) "SECTION 13(A) EVENT" shall mean any event described in
clause (x), (y) or (z) of Section 13(a).
(l) "SERIES A SHARES" shall mean shares of Series A Preferred
Stock, par value $0.10 a share, of the Company, including any authorized
fraction of a Series A Share, unless the context otherwise requires.
(m) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement (including, without limitation, a report filed pursuant to
Section 13(d) or 14(d) under the Exchange Act) by the Company or an Acquiring
Person indicating that an Acquiring Person has become such.
(n) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting securities or voting interests is owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(o) "TRIGGERING EVENT" shall mean any Section 11(a)(ii)
Event or Section 13(a) Event.
The following terms shall have the meanings indicated in the
following Sections of this Agreement:
(i) "ACT" -- Section 9(c).
(ii) "ADJUSTMENT SHARES" -- Section 11(a)(ii).
(iii) "COMMON SHARE EQUIVALENT" -- Section 11(a)(iii).
(iv) "CURRENT VALUE" -- Section 11(a)(iii).
(v) "EQUIVALENT PREFERRED SHARES" -- Section 11(b).
(vi) "EXCHANGE ACT" -- Section 1(b).
(vii) "EXTENSION DATE" -- Section 27.
(viii) "FINAL EXPIRATION DATE" -- Section 7(a).
(ix) "PRINCIPAL PARTY" -- Section 13(b).
(x) "PURCHASE PRICE" -- Sections 4(a), 11(a)(ii) and
13(a).
(xi) "RECORD DATE" -- Preamble.
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(xii) "REDEMPTION DATE" -- Section 7(a).
(xiii) "REDEMPTION PRICE" -- Section 23(a)(i).
(xiv) "RULES" -- Section 1(b).
(xv) "SEPARATION DATE" -- Section 3(a).
(xvi) "SERIES A PREFERRED STOCK" -- Preamble.
(xvii) "SPREAD" -- Section 11(a)(iii).
(xviii) "SPRINGING RIGHT OF REDEMPTION" -- Section 23(a)(i).
(xix) "SUBSTITUTION PERIOD" -- Section 11(a)(iii).
(xx) "SUMMARY OF RIGHTS" -- Section 3(b).
(xxi) "TRADING DAY" -- Section 11(d)(i).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the Separation
Date also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
agrees to act as Rights Agent under this Agreement. The Company may from time to
time appoint such co-rights agents as it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the
tenth Business Day following the Shares Acquisition Date or (ii) the close of
business on the fifteenth Business Day after the date on which a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first commenced within
the meaning of Rule 14d-2(a) of the Rules, if upon consummation thereof, such
Person would be the Beneficial Owner of twenty percent (20%) or more of the
Common Shares then outstanding (the earlier of (i) and (ii) being herein
referred to as the "SEPARATION DATE"), (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the certificates for
Common Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in
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connection with the transfer of Common Shares. As soon as practicable after the
Separation Date, the Rights Agent will send, by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Separation Date, at the address of such holder shown on the
records of the Company, one or more Right Certificates, in substantially the
form of EXHIBIT B hereto, evidencing one Right for each Common Share so held. In
the event that an adjustment in the number of Rights per Common Share has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accord ance with Section 14(a) hereof) so that Right
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Separation Date,
the Rights will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Series A Preferred
Stock, in substantially the form attached hereto as EXHIBIT C (the "SUMMARY OF
RIGHTS"), by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Separation Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof and the registered holders of the Common Shares shall also be
the registered holders of the associated Rights. Until the earliest of the
Separation Date, the Redemption Date or the Final Expiration Date, the surrender
for transfer of any certificate for Common Shares outstanding on the Record Date
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Certificates for Common Shares issued after the Record
Date but prior to the earliest of the Separation 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 ANCHOR BANCORP WISCONSIN
INC. AND FIRSTAR TRUST CO., DATED AS OF JULY 22, 1997 (THE "RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFER
ENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
ANCHOR BANCORP WISCONSIN [INC.] UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH
IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVI DENCED BY SEPARATE
CERTIFICATES AND WILL NO
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LONGER BE EVIDENCED BY THIS CERTIFICATE. ANCHOR BANCORP WISCONSIN INC.
WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT
WITHOUT CHARGE PROMPTLY FOLLOWING RECEIPT OF A WRITTEN REQUEST THEREFOR.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to
purchase Series A Shares, exercise notice and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of one one-hundredths of a
share of Series A Preferred Stock as shall be set forth therein at the price per
one one-hundredth of a Series A Share set forth therein (the "PURCHASE PRICE"),
but the amount and type of the securities purchasable (or other consideration to
be made available) upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such (other than a bona fide purchaser for
value who has no knowledge that the transferor was an Acquiring Person or an
Associate or Affiliate of an Acquiring Person) or (iii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the
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8
transferred Rights or (B) a transfer that the Board has determined is part of a
plan, arrangement or understanding that has as a primary purpose or effect
avoidance of Section 7(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDING LY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRE
SENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board or its President, Chief Executive Officer
or any Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal, attested by the Secretary, the Treasurer or
any Assistant Secretary or Assistant Treasurer of the Company, or shall bear a
facsimile thereof. The Right Certificates shall not be valid for any purpose
unless countersigned by the Rights Agent. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Separation Date, the Rights Agent will keep
or cause to be kept, at its office or agency designated for such purpose, books
for registration and transfer of the Right Certificates issued or to be issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates, the certificate number of each of the Right
Certificates and the date of each of the Right Certificates.
<PAGE>
9
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14
hereof, at any time after the close of business on the Separation Date, and at
or prior to the close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates 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
Series A Shares (or, following a Section 11(a)(ii) Event or Section 13(a) Event,
Common Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate until the registered
holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall countersign and deliver to
the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) 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 owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the Separation
Date upon
<PAGE>
10
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 designated for such purpose, together with payment of the
Purchase Price for each one one-hundredth of a Series A Share as to which the
Rights are exercised, at or prior to the close of business on the earlier of (i)
July 22, 2007 (the "FINAL EXPIRATION DATE") or (ii) the date on which the Rights
are redeemed as provided in Section 23 hereof (the "REDEMPTION DATE").
(b) The Purchase Price for each one one-hundredth of a Series
A Share pursuant to the exercise of a Right shall initially be Two hundred
Dollars ($200), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the Series A Shares (or other
shares, securities or property, as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof, in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
either (A) requisition from any transfer agent of the Series A Shares (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of Series A Shares (or fractions thereof) to be pur
chased (and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests) or (B) if the Company shall have elected to
deposit the Series A Shares issuable upon exercise of the Rights hereunder with
a depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Series A Share as are to be
purchased (in which case certificates for the Series A Shares represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Company is obligated to issue other
securities (including Common Shares) or assets pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such other securities
or assets are avail able for distribution by the Rights Agent, if and when
appropriate.
<PAGE>
11
(d) In case the registered holder of any Right Certificate
shall exercise less than all the rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee from an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (other than a bona fide purchaser for value who has no knowledge
that the transferor was an Acquiring Person or an Associate or Affiliate of an
Acquiring Person) or (iii) a transferee of an Acquiring Person (or such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board has determined
is part of a plan, arrangement or understanding that has as a primary purpose or
effect the avoidance of this Sec tion 7(e), shall become null and void without
any further action, and any holder of such Rights shall thereupon have no rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof 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.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates
<PAGE>
12
shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Rights Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SERIES A SHARES;
REGISTRATION.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Series A Shares
the number of Series A Shares that will be sufficient to permit the exercise in
full of all outstanding Rights. Prior to the occurrence of a Triggering Event,
the Company shall not be obliged to cause to be reserved and kept available out
of its authorized and unissued Common Shares or shares of preferred stock (other
than Series A Shares), any such Common Shares or any shares of preferred stock
(other than the Series A Shares) to permit exercise of outstanding Rights.
(b) If the Series A Shares issuable upon the exercise of
Rights are listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) If then required by applicable law, the Company shall use
its best efforts to (i) file, as soon as practicable following the earliest date
after the occurrence of a Triggering Event as to which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, or as soon as is required by law following the
Separation Date, as the case may be, a registration statement under the
Securities Act of 1933 (the "ACT"), with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing and (iii)
cause such registration statement to remain effec tive (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities and (B) the
Final Expiration Date. If then required by applicable law, the Company will also
take such action as may be appropriate under the securities or "blue sky" laws
of the various states. The Company may temporarily suspend, for a period of time
not to exceed ninety (90) days after the date set forth in clause (i) of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement. Upon any such suspension, the Company shall issue a
public
<PAGE>
13
announcement stating that the exercisability of the Rights has been temporarily
suspended. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Series A Shares delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(e) The Company covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Series A Shares (or Common Shares and/or other securities, as the case may
be) upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax that may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the issuance or delivery of
certificates for the Series A Shares (or Common Shares and/or other securities,
as the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates for Series A Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. SERIES A SHARES RECORD DATE. Each person in whose name
any certificate for Series A Shares (or Common Shares and/or other securities,
as the case may be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the Series A Shares (or Common
Shares and/or other securities, as the case may be) 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 Series A Shares (or
Common Shares and/or other securities, as the case may be) 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 Series A Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled (in such holder's capacity as such) to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote any shares, to
receive dividends or other distributions with respect to any shares or to
exercise any
<PAGE>
14
preemptive rights with respect to any shares, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered
by each Right, and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Series A Shares payable
in Series A Shares, (B) subdivide the outstanding Series A Shares, (C) combine
the outstanding Series A Shares into a smaller number of Series A Shares or (D)
issue any shares of its capital stock in a reclassification of the Series A
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) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock that, if such Right had been exercised immediately prior to such
date and at a time when the Series A 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.
(ii) In the event that:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the Company or
other wise combine with the Company and the Company shall be the
continuing or surviving corporation of such merger or combination and the
Common Shares of the Company shall remain outstanding and unchanged, (2)
shall, in one or more transactions, transfer any assets to the Company or
to any of its Subsidiaries (including, in the case of Subsidiaries, by way
of a merger or consolidation of any such Subsidiary) in exchange (in whole
or in part) for shares of any class of capital stock of the Company or any
of its Subsidiaries or for securities exercisable for or convertible into
shares of any class of capital stock of the Company or any of its
Subsidiaries or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of any
class of capital stock of the Company or any of its Subsidiaries or
securities exercisable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries (other than as
part
<PAGE>
15
of a pro rata distribution to all holders of such shares of any class of
capital stock of the Company), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose of assets (in one or more
transactions), to, from, with or of, as the case may be, the Company or
any of its Subsidiaries (including, in the case of Subsidiaries, by way of
a merger or consolidation of any Subsidiary), on terms and conditions less
favorable to the Company than the Company would be able to obtain in
arm's-length negotia tion with an unaffiliated third party, other than
pursuant to a transaction set forth in Section 13(a) hereof, (4) shall
receive any compensation from the Company or any of its Subsidiaries other
than compensation for full time employment as a regular employee at rates
in accordance with the Company's (or its Subsidiaries') past practices or
(5) shall receive the benefit, directly or indirectly (except
proportionately as a shareholder and except if resulting from a
requirement of law or governmental regulation), of any loans, assumptions
of loans, advances, guarantees, pledges or other financial assistance, or
any tax credits or other tax advantage, provided by the Company or any of
its Subsidiaries;
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity organized, appointed or estab
lished by the Company for or pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall become the
Beneficial Owner of twenty-five percent (25%) or more of the Common Shares
then outstanding, other than pursuant to any transaction set forth in
Section 13(a) hereof; or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of its
Subsidiaries, other than a transaction to which Section 13(a) applies
(whether or not with or into or otherwise involving an Acquiring Person),
that has the effect, directly or indirectly, of increasing by more than
one percent (1%) the proportionate share of the outstanding shares of any
class of equity securities or of securities exercisable for or convertible
into equity securities of the Company or any of its Subsidiaries, that is
directly or indirectly owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person;
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below and in Section 7(e) hereof, shall
thereafter have a right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu of Series
A Shares, and subject to the provisions of Section 11(a)(iii) below, such number
of Common Shares as shall
<PAGE>
16
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of one one-hundredths of a Series A Share for which a Right was
exercisable immediately prior to the first occurrence of an event set forth in
Sec tion 11(a)(ii)(A), (B) or (C) above, and dividing that product (which,
following such first occurrence, shall be referred to as the "PURCHASE PRICE"
for all purposes of this Agreement) by (y) fifty percent (50%) of the current
per share market price of the Common Shares (determined pursuant to Section
11(d) hereof), but not less than the par value thereof, on the date of such
first occurrence (such number of shares, the "ADJUSTMENT SHARES").
(iii) In the event that (x) the total of the Common
Shares that are issued but not outstanding and authorized but unissued
(excluding Common Shares reserved for issuance pursuant to the specific terms of
any indenture, option plan or other agreement) is not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, and
subject to such limitations as are necessary to prevent a default under any
agreement for money borrowed to which the Company is a party and to comply with
applicable law, then the Board shall: (A) determine the excess of (1) the value,
based upon the current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof), of the Adjustment Shares issuable upon the
exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price (such
excess, the "SPREAD") and (B) with respect to each Right, make adequate
provision to substitute for, or provide an election to acquire in lieu of, the
Adjustment Shares, upon payment of the applicable Purchase Price (which term
shall include any reduced Purchase Price) any combination of the following
having an aggregate value equal to the Current Value (such aggregate value to be
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board): (1) a reduction in the Purchase
Price, (2) Common Shares and/or other equity securities of the Company
(including, without limitation, shares or units of shares of any series of
preferred stock that the Board, upon approval by a majority of the Continuing
Directors, has deemed to have the same value of Common Stock (such shares or
units of share of preferred stock hereinafter referred to as "COMMON SHARE
EQUIVALENTS")) and/or (3) debt securities of the Company and/or cash and other
assets; PROVIDED, HOWEVER, that if the Company shall not have made ade quate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the first occurrence of a Triggering Event, then the Company shall be
obli gated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent available)
and then, if necessary, cash, which securities and/or cash in the aggregate are
equal to the Spread. If the Board shall determine in good faith that it is
likely that sufficient additional Common Shares could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
following the first occurrence of a Triggering Event, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the
<PAGE>
17
"SUBSTITUTION PERIOD"). To the extent that the Company determines that some
action needs to be taken pursuant to the first and/or second sentences of this
Sec tion 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, 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 first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Shares shall be the current
per share market price (as determined pursuant to Section 11(d) hereof) of the
Common Shares on the date of the first occurrence of a Triggering Event. The
provisions of this Section 11(a)(iii) shall apply only to Common Shares of the
Company and shall not apply to the securities of any other Person.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Series A Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Series A Shares (or shares having the same
rights, privileges and preferences as the Series A Shares ("EQUIVALENT PREFERRED
SHARES")) or securities con vertible into Series A Shares or equivalent
preferred shares at a price per Series A Share or equivalent preferred share (or
having a conversion price per share, if a security convertible into Series A
Shares or equivalent preferred shares) less than the current per share market
price of the Series A Shares (as defined in Section 11(d) hereof) 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 Series
A Shares outstanding on such record date plus the number of Series A Shares that
the aggregate offering price of the total number of Series A Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Series A Shares outstanding on such record date plus the number of additional
Series A Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such sub scription 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,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the holders of the Rights. Series A Shares owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are
<PAGE>
18
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
distribution to all holders of the Series A Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of any debt securities, cash or assets
(other than a regular quarterly cash dividend or a dividend payable in Series A
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current per share market price of the Series A Shares (as defined in Section
11(d) hereof) on such record date, less the fair market value (as determined in
good faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and binding on the holders of Rights) of the portion
of the assets or debt securities so to be distributed or of such subscription
rights or warrants applicable to one Series A Share and the denominator of which
shall be such current per share market price of the Series A Shares (as
determined pursuant to Section 11(d) hereof). Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price that would then be in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall be
deemed to be the lesser of (x) the average of the daily closing prices per
Common Share for the 30 consecutive Trading Days immediately prior to such date
or (y) the average of the daily closing prices per Common Share for the 30
consecutive Trading Days immediately following such date; PROVIDED, HOWEVER,
that in the event that the current per share market price of the Common Shares
is determined during a period following the announcement by the issuer of such
Common Shares of a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares (other than
the Rights), or any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of 20 Trading Days after the ex-dividend
date for such dividend or distribution, then, and in each such case, the current
market price shall be appropriately adjusted to reflect the current market price
per Common Share equivalent. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange, if any, on
which the Common Shares are then listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the
<PAGE>
19
over-the-counter market, as reported by The NASDAQ Stock Market ("NASDAQ") or
such other system then in use, or, if on any such date the Common Shares are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common Shares
selected by the Board. The term "TRADING DAY" shall mean a day on which the
principal national securities exchange or NASDAQ on which the Common Shares are
listed or traded or are admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to trading on any
national securities exchange or NASDAQ, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Series A Shares shall be determined
in the same manner as set forth above for Common Shares in clause (i) of this
Sec tion 11(d). If the current per share market price of the Series A Shares
cannot be determined in the manner provided above, the "current per share market
price" of the Series A Shares shall be conclusively deemed to be the current per
share market price of the Common Shares (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof), multiplied by one hundred. If neither the Common Shares nor the Series
A Shares are publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and binding on the holders of Rights.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; PROVIDED, HOWEVER, that any adjustments that
by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or the nearest
one-hundredth of a Common Share or other share or one ten- thousandth of a
Series A Share, as the case may be. Notwith standing the first sentence of this
Section 11(e), any adjustment provided for in this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction that
requires such adjustment or (ii) the Final Expiration Date.
(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 property, other securities (other than
shares of capital stock of the Company) or shares of capital stock of the
Company other than Series A Shares, thereafter the amount of such property,
other securities (other than shares of capital stock of the Company) and the
number of such other shares of capital stock so receivable upon exercise of any
Right (as well as any consideration to be paid therefor) shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Series A
<PAGE>
20
Shares (and the Purchase Price) contained in this Section 11, and the provisions
of Sections 7, 9, 10 and 13 with respect to the Series A Shares shall apply on
like terms to any such property, other securities and other shares of capital
stock.
(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 Series A Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in 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 Series A Share (calculated to the nearest one one
ten-thousandth of a Series A Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of Series A Shares purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-hundredths of a
Series A Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become the number of Rights (calculated to the nearest one one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates 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
<PAGE>
21
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 Series A Shares issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-hundredth of a share and the number of shares
that were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then stated value, if
any, of the Series A Shares issuable upon exercise of the Rights, the Company
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Series A Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 requires that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Series A Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Series A Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Series A Shares, (ii) issuance wholly for cash of any of the Series A Shares
at less than the current market price, (iii) issuance wholly for cash of Series
A Shares or securities that by their terms are convertible into or exchangeable
for Series A Shares, (iv) dividends on Series A Shares payable in Series A
Shares or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Series A Shares
shall not be taxable to such shareholders.
<PAGE>
22
(n) The Company covenants and agrees that it shall not, and
shall not permit any Subsidiary, at any time after the Separation Date, to (i)
consolidate with, (ii) merge with or into or (iii) sell or transfer, in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person if at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the
Separation Date, it will not, except as permitted by Section 23, Section 24,
Section 27 or Section 31 hereof, take (or permit any Subsidiary to take) any
action that at the time it is reasonably foreseeable will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights;
PROVIDED, HOWEVER, that the issuance of additional Rights pursuant hereto,
including by action of the Board under Section 22 hereof, shall not be deemed to
violate this Section 11(o).
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date (i) declare a dividend on the outstanding Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares or (iii) combine the
outstanding Common Shares into a smaller number of shares, the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter, shall be proportionately adjusted so that the number of Rights
thereafter associated (whether before or after the Separation Date) with each
Common Share following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which shall be the total
number of Common Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event. For purposes of
this Section 11(p), any Common Shares issued after the Separation Date that were
not issued together with a Right (pursuant to the Preamble hereto or by action
of the Board pursuant to Section 22 hereof) shall not be counted as outstanding.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares or the Series A Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate (or, if prior to the
Separation Date, to each holder of a certificate representing Common Shares) in
accordance with Section 25 hereof.
<PAGE>
23
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company) and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company)
shall consolidate with, or merge with or into, the Company and the Company shall
be the continuing or surviving cor poration of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in a single transaction or a series of related transactions, assets
or earning power aggregating more than fifty percent (50%) 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 any Subsidiary of the Company),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
Common Shares of the Principal Party, not subject to any rights of first
refusal, redemption or repurchase, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one
one-hundredths of a Series A Share for which a Right is exercisable immediately
prior to the first occurrence of a Section 13(a) Event (or, if any event set
forth in Sec tions 11(a)(ii)(A), (B) and (C) has occurred prior to the Section
13(a) Event, multiply ing the number of such fractional shares for which a Right
was exercisable immedi ately prior to the first occurrence of an event set forth
in Sections 11(a)(ii)(A), (B) and (C) hereof by the Purchase Price immediately
prior to such first occurrence), and dividing that product (which, following the
Section 13(a) Event, shall thereafter be referred to as the "PURCHASE PRICE" for
all purposes of this Agreement) by (2) fifty percent (50%) of the current per
share market price (determined pursuant to Section 11(d) hereof) per Common
Share (or other securities or property as provided for herein) of such Principal
Party on the date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obliga tions and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party, it
being speci fically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13(a) Event; (iv) such
<PAGE>
24
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its Common Shares thereafter deliverable upon the exercise of
the Rights; and (v) the provisions of Sections 11(a)(ii) and 11(a)(iii) hereof
shall thereafter be of no effect following the first occurrence of a Section
13(a) Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Company are converted
in such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; PROVIDED, HOWEVER, that in any
such case, (1) if the Common Shares of such Person are not at such time and have
not been continuously over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized Common Shares, which have not been issued or reserved for
issuance, to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and
<PAGE>
25
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Final Expiration Date; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act. The provisions of this Section 13 shall similarly apply to
successive mergers or consoli dations or sales or other transfers. In the event
that one of the transactions described in Section 13(a) hereof shall occur at
any time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Separation Date as provided in Section 11(p) hereof,
or to distribute Right Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange, if any, on
which the Rights are then 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.
If on any such date the Rights are not publicly held or so listed or traded, the
current market value of a whole Right shall mean the fair value of a whole Right
as determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and binding on the holders of Rights.
(b) The Company shall not be required to issue fractions of
Series A Shares (other than fractions that are integral multiples of one
one-hundredth of a Series A Share) upon exercise of the Rights or to distribute
certificates that evidence fractional Series A Shares (other than fractions that
are integral multiples of
<PAGE>
26
one one-hundredth of a Series A Share). Fractions of Series A Shares in integral
multiples of one one-hundredth of a Series A Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Series A Shares. In lieu of fractional Series A Shares
that are not integral multiples of one one-hundredth of a Series A Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Series A Share. For purposes of this
Section 14(b), the current market value of a Series A Share shall be the closing
price of a Series A Share (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of Common Shares upon exercise
of the Rights or to distribute certificates that evidence fractional Common
Shares. In lieu of fractional Common Shares, the Company may 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 Common Share. For purposes of this Section 14(c), the
current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to Sec tion 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of the Rights,
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as otherwise set forth herein.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Separation Date, the registered holders of any
certificate representing Common Shares); and any registered holder of any Right
Certificate (or, prior to the Separation Date, of any other certificate
representing Common Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Separation Date, of the
Common Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement
<PAGE>
27
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Separation Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Separation 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 designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and with appropriate
forms and certificates fully executed; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Separation 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
certificates 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.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Series A Shares, or any
other securities of the Company, that may at any time be issuable on the
exercise of the Rights repre sented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of direc tors or upon any matter submitted to
shareholders at any meeting thereof, or to give
<PAGE>
28
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be fully indemnified against, shall
be protected from, and shall incur no liability or expense (including without
limitation attorneys' fees and expenses) 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 Series A
Shares or Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, instruction, consent, certifi cate, 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 its counsel as set forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; PROVIDED, HOWEVER, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of
<PAGE>
29
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.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(i) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or willful
misconduct.
<PAGE>
30
(c) 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.
(d) 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 adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Series A Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Series
A Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(e) 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.
(f) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(g) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
<PAGE>
31
(h) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(i) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2 on
such certificate attached to the form of assignment or form of election to
purchase, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Series A Shares by registered or
certified mail. In such event, the Company shall give written notice of such
resignation to the holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares and Series A 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
cor poration organized and doing business under the laws of the United States or
of any state of the United States, in good standing, that is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by federal
<PAGE>
32
or state authority and that has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and Series A Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change in
the Purchase Price per share and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, the Company may,
if deemed necessary or appropriate by the Board, issue Right Certificates in
connection with the issuance or sale of Common Shares following the Separation
Date.
Section 23. REDEMPTION.
(a) (i) The Board may, at its option, at any time prior to the
earlier of (A) the close of business on the tenth Business Day following any
Shares Acquisition Date or (B) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of One Cent
($0.01) per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "REDEMPTION PRICE"); PROVIDED,
HOWEVER, that if, following the occurrence of a Shares Acquisition Date and
following the expiration of the right of redemption hereunder (other than a
Springing Right of Redemption, as defined below) but prior to any Triggering
Event, each of the following shall have occurred and remain in effect: (x) a
Person who is an Acquiring Person shall have transferred or otherwise disposed
of a number of Common Shares in a transaction, or series of transactions, that
did not result in the occurrence of a Triggering Event, such that such Person is
thereafter a Beneficial Owner of ten percent (10%) or less of the outstanding
Common Shares; (y) there are no other Persons, immediately following the
occurrence of the event described in clause (x) above, who are Acquiring
Persons; and (z) the transfer or other disposition described in clause (x) above
was other than
<PAGE>
33
pursuant to a transaction, or series of transactions, that directly or
indirectly involved the Company or any of its Subsidiaries, then the right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23. The reinstated right of redemption referred to in the preceding
sentence and the reinstated right of redemption referred to in Sections 27 and
31 hereof is herein called the "SPRINGING RIGHT OF REDEMPTION." Notwithstanding
anything contained in this Agree ment to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) at a time when the Rights are then
redeemable hereunder.
(ii) Following the occurrence of a Shares Acquisition
Date but prior to any event described in Section 13(a), the Board may also
redeem all but not less than all of the then outstanding Rights at the
Redemption Price in connection with any event of the type specified in Section
11(a)(ii)(A)(1) or 13(a) not involving an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (other than as a holder of Common Shares being
treated like other such holders generally).
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the action of the Board ordering the redemption of
the Rights, evidence of which shall have been filed with the Rights Agent 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. In the case of a redemption permitted
only under Section 23(a)(ii), evidence of which shall have been filed with the
Rights Agent, the right to exercise the Rights will terminate and represent only
the right to receive the Redemption Price only after ten business days following
the giving of notice of such redemption to the holders of such Rights if no
event set forth in Section 11(a)(ii) shall have occurred, and, if such event
shall have occurred, upon the later of ten business days following the giving of
such notice or the expiration of any period during which the Rights under
Section 11(a)(ii) may be exercised. Within ten days after the action of the
Board ordering the redemption of the Rights, the Company shall give notice of
such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Separation Date, on the
registry books of the Transfer Agent for the Common Shares. Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
Section 24. EXCHANGE.
(a) The Board may, at its option, at any time after the right
of the Company to redeem the Rights has expired or terminated (although such
right may be subject to restoration as a Springing Right of Redemption or
pursuant to Section
<PAGE>
34
23(a)(ii) hereof), exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding
the foregoing, the Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary or the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of fifty percent (50%) or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give notice to the Rights Agent and public notice of any such exchange;
PROVIDED, HOWEVER, that failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
that is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of Common Shares for Rights will be effected and,
in the event of any partial exchange, the number of Rights that will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights that have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Series A Shares for Common Shares at the rate of
one one-hundredth of a Series A Share for each Right.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates that evidence fractional Series A
Shares (except as hereinafter provided) or fractional Common Shares, but if the
exchange is for Series A Shares, the Company shall be obligated to issue
fractional shares so long as any fraction of a Series A Share so to be issued is
at least equal to one one-hundredth of a Series A Share. In lieu of such
fractional shares, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional shares would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share. For the purposes of this
<PAGE>
35
Section 24(d), (i) the current market value of a whole Common Share shall be the
per share market price determined as of the day immediately following the day of
the public announcement by the Company that an exchange is to be effected
pursuant to this Section 24 and (ii) the current market value of a Series A
Share or fraction of a Series A Share shall be the current market value on such
day of a Series A Share (or fraction of a Series A Share) as determined in
accordance with Section 11(d)(ii) hereof.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Separation Date, (i) to pay any dividend payable in stock of any class to the
holders of Series A Shares or to make any other distribution to the holders of
Series A Shares (other than a regular quarterly cash dividend), (ii) to offer to
the holders of its Series A Shares rights or warrants to subscribe for or to
purchase any additional Series A Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of
Series A Shares (other than a reclassification involving only the subdivision of
outstanding Series A 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 more than fifty percent (50%) 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, to the extent
feasible and in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of the Common Shares and/or Series A Shares, if any such date is
to be fixed, and such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the Series A Shares for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Series A Shares, whichever shall be the
earlier.
(b) In case of the occurrence of a Section 11(a)(ii) Event,
then, in any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii), and (ii) all references in the preceding
paragraph to Series A Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.
<PAGE>
36
Section 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Anchor BanCorp Wisconsin Inc.
25 West Main Street
Madison, Wisconsin 53703
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Firstar Trust Co.
615 East Micigan Street
P.O. Box 2077
Milwaukee, Wisconsin 53201
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 Rights Agent.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Separation
Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Shares unless such approval is
required by Section 29(b), except for a supplement or amendment that would
change the Redemp tion Price, Final Expiration Date, Purchase Price, or number
of fractional Series A Shares for which a Right is then exercisable. From and
after the Separation Date (and at any time after the occurrence of a Shares
Acquisition Date subsequent to the occurrence of a Springing Right of
Redemption), the Company and the Rights Agent shall, if the Company shall so
direct, supplement or amend this Agreement without the approval of any holders
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provisions herein, (iii) to extend the period of redemption
provided in Section 23 hereof (which amendment shall set forth a date after
which the Rights are no longer redeemable ("EXTENSION DATE") unless the Rights
are further amended prior to the Extension Date to further extend the time
during that the Rights are redeemable, and which amendment may provide for the
termination of the right of
<PAGE>
37
redemption prior to any Extension Date or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); PROVIDED FURTHER, that this Agreement may not be
supplemented or amended in any way after the period for redemption of the Rights
pursuant to Section 23 hereof shall have expired unless there shall thereafter
arise and be in effect a Springing Right of Redemption. Upon the delivery of a
certificate from an appropriate officer of the Company, which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Separation Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
(a) For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time and any determination
of the particular percentage of such outstanding Common Shares of which any
Person is the Beneficial Owner shall be made in accordance with the provisions
of Rule 13d-3(d)(1)(i) of the Rules as in effect as of the date hereof. Subject
to the provisions of paragraph (b) of this Section 29, the Board (where speci
fically provided for, with the concurrence of the Independent Directors) shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or the Company
(where specifically provided for, with the concurrence of the Independent
Directors), or as may be neces sary 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 (ii) below, all omissions with respect to the foregoing) that
are done or made by the Board (where specifically provided for, with the
concurrence of the Independent Directors), in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties and (ii) not subject the Board or the
Independent Directors to any liability to the holders of the Right Certificates.
(b) Notwithstanding anything in this Agreement to the
contrary, any actions by the Board pursuant to Section 11(a)(iii), Section
23(a), Section 24, Section 27 or Section 31, and any determinations concerning
the
<PAGE>
38
occurrence of any Triggering Event, shall require the concurrence of such number
of Independent Directors as shall constitute a majority of the Independent
Directors then in office; PROVIDED, HOWEVER, that any such action approved by
the Board without such required concurrence of Independent Directors (whether or
not there shall then be Independent Directors in office) shall nevertheless be,
and be deemed to be, duly approved if such action is approved (at a meeting of
stockholders duly called and held upon at least thirty days prior written notice
to the shareholders) by the affirmative votes of two-thirds of all outstanding
Common Shares including the affirmative votes of the holders of at least
two-thirds of all outstanding Common Shares held as of the record date for such
meeting by persons other than an Acquiring Person or any Affiliate or Associate
of such Acquiring Person.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Separation Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Separation Date, the Common
Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board determines
in its good faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the close of business on the tenth day following the date of
such determination by the Board.
Section 32. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Wisconsin, and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State; and any provision of this Agreement and
each such Right Certificate relating to the internal corporate governance or
other affairs of the Company shall be governed by and construed in accordance
with the laws of the State of Wisconsin.
Section 33. CONSEQUENTIAL DAMAGES. Neither party to this Agreement
shall be liable to the other party for consequential damages.
<PAGE>
39
Section 34. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original and all such counterparts shall together constitute but
one and the same instrument.
Section 35. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience of reference
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 Agree ment
to be duly executed as of the day and year first above written.
ANCHOR BANCORP WISCONSIN INC.
By: /s/ Douglas J. Timmerman
------------------------------------
Name: Douglas J. Timmerman
Title: Chairman, President and
Chief Executive Officer
FIRSTAR TRUST CO.
By: /s/ Eugene R. Lee
------------------------------------
Name: Eugene R. Lee
Title: Vice President
<PAGE>
EXHIBIT A
ANCHOR BANCORP WISCONSIN INC.
ARTICLES OF AMENDMENT
in respect of
SERIES A PREFERRED STOCK
------------------------
Pursuant to Section 180.1002 of the
Wisconsin Business Corporation Law
------------------------
The undersigned, being the Chairman of the Board, President and
Chief Executive Officer of Anchor BanCorp Inc. (the "CORPORATION"), a
corporation organized and existing under the Wisconsin Business Corporation Law,
hereby certifies that, pursuant to the provisions of Sections 180.0602 and
180.1002 of the Wisconsin Business Corporation Law, the Board of Directors of
the Corporation duly adopted the following resolution at a meeting of said Board
of Directors duly called and held on July 22, 1997, which resolution remains in
full force and effect as of the date hereof:
RESOLVED, that the Board of Directors of the Corporation,
pursuant to authority expressly vested in it by the provisions of the
Corporation's Articles of Incorporation, as amended (the "Charter"),
hereby establishes a series of the serial preferred stock, par value $0.10
per share, of the Corporation and fixes the number of shares of such
series and the powers, designations, preferences and relative,
participating, optional or other rights of such series, and the
qualifications, limitations or restrictions thereof, as follows:
The first series of serial preferred stock, par value $0.10 per
share, of the Corporation shall be, and hereby is, designated "Series A
Preferred Stock" (the "SERIES A SHARES"), and the number of shares
constituting such series shall be one hundred thousand (100,000). The
relative rights and preferences of the Series A Shares shall be as
follows:
<PAGE>
2
Section a. DIVIDENDS AND DISTRIBUTIONS.
(1) Subject to the prior and superior rights of the holders of any
shares of any series of stock ranking prior and superior to the Series A
Shares with respect to dividends, the holders of Series A Shares, in
preference to the holders of Common Stock, par value $0.10 per share, of
the Corporation (the "Common Stock") and of any other junior stock, shall
be entitled to receive, when and as declared by the Board of Directors,
out of any funds lawfully available therefor, cash dividends thereon,
payable quarterly, from the date of issuance thereof, on or about the
fifteenth days of May, August, November and February in each fiscal 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 Series A Share, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10.00 or (b) subject to the
provisions for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend or distribution 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
Series A Share. In the event the Corporation shall at any time after
August 1, 1997 (i) declare any dividend on the Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amounts to which holders of Series A
Shares were entitled immediately prior to such event under clause (a) and
clause (b) of the preceding sentence shall be adjusted by multiplying each
such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) The Corporation shall declare a dividend or distribution on the
Series A Shares as provided in paragraph (1) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other
than a dividend or distribution payable in shares of Common Stock);
PROVIDED, HOWEVER, that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $10.00 per share on the Series A Shares shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date; and PROVIDED FURTHER, that nothing contained in this paragraph (2)
shall be construed so as to
<PAGE>
3
conflict with any provision relating to the declaration of dividends
contained in the Charter.
(3) Dividends shall begin to accrue and be cumulative on outstanding
Series A Shares from the Quarterly Dividend Payment Date next preceding
the date of issue of such Series A 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 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 Series A Shares entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the Series A Shares
in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders
of Series A Shares entitled to receive payment of a dividend or
distribution declared thereon.
Section b. REDEMPTION. The Series A Shares are not redeemable.
Section c. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of
the voluntary or involuntary liquidation of the Corporation the "preferential
amount" that the holders of the Series A Shares shall be entitled to receive out
of the assets of the Corporation shall be $100.00 per share plus all accrued and
unpaid dividends thereon.
(1) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (upon liquidation, dissolution or winding up) to the
Series A Shares unless, prior thereto, the holders of Series A Shares
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
Series A Shares 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) 100 (as appropriately adjusted as set forth in
paragraph (3) of this Section c to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii), the "ADJUSTMENT NUMBER"). Following the
payment of
<PAGE>
4
the full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding Series A Shares and Common Stock,
respectively, holders of Series A Shares and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to one with
respect to the Series A Shares and Common Stock, on a per share basis,
respectively.
(2) 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 Shares, then all such
available assets shall be distributed ratably to the holders of the Series
A Shares and the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the Common
Adjustment, then any such remaining assets shall be distributed ratably to
the holders of Common Stock.
(3) In the event the Corporation shall at any time after August 1,
1997 (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
out standing Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to 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.
Section d. SINKING FUND. The Series A Shares shall not be entitled
to the benefit of any sinking fund for the redemption or purchase of such
shares.
Section e. CONVERSION.
(1) Subject to paragraph (2) of this Section e, the Series A Shares
shall not be convertible.
(2) 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 the Series A Shares shall
at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to
100 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare
<PAGE>
5
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) into a greater
or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of Series A Shares shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section f. VOTING RIGHTS.
(1) The holders of Series A Shares shall have no voting rights
except as provided by Wisconsin statutes or by paragraph (2) of this
Section f.
(2) So long as any Series A Shares shall be outstanding, and in
addition to any other approvals or consents required by law, without the
consent of the holders of 66-2/3% of the Series A Shares outstanding as of
a record date fixed by the Board of Directors, given either by their
affirmative vote at a special meeting called for that purpose, or, if
permitted by law, in writing without a meeting:
(i) The Corporation shall not sell, transfer or lease all or
substantially all the properties and assets of the Corporation;
PROVIDED, HOWEVER, that nothing herein shall require the consent of
the holders of Series A Shares for or in respect of the creation of
any mortgage, pledge, or other lien upon all or any part of the
assets of the Corpora tion.
(i) The Corporation shall not effect a merger or consolidation
with any other corporation or corporations unless as a result of
such merger or consolidation and after giving effect thereto holders
of Series A Shares are entitled to receive a per share amount and
type of consideration equal to 100 times the per share amount and
type of con sideration received by holders of shares of Common
Stock, or (1) either (A) the Corporation shall be the surviving
corporation or (B) if the Corporation is not the surviving
corporation, the successor corporation shall be a corporation duly
organized and existing under the laws of any state of the United
States of America or the District of Columbia, and all obligations
of the Corporation with respect to the Series A Shares shall be
assumed by such successor corporation, (2) the Series A Shares then
outstanding shall continue to be outstanding and (3) there shall be
no alteration or change in the designation or the preferences,
<PAGE>
6
relative rights or limitations applicable to outstanding Series A
Shares prejudicial to the holders thereof.
(ii) The Corporation shall not amend, alter or repeal any of the
provisions of its Certificate of Incorporation in any manner that
adversely affects the relative rights, preferences or limitations of
the Series A Shares or the holders thereof.
Section g. CERTAIN RESTRICTIONS.
(1) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Shares as provided in Section a are in arrears,
there after and until all accrued and unpaid dividends and distributions,
whether or not declared, on Series A Shares outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (as to dividends) to the Series A
Shares;
(i) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (as to dividends) with
the Series A Shares, except dividends paid ratably on the Series A
Shares and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders
of all such shares are then entitled;
(ii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (as to dividends) to the Series A
Shares; PROVIDED, HOWEVER, 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 (as to dividends) to the Series A Shares; and
(iv) purchase or otherwise acquire for consideration any Series
A Shares, or any shares of stock ranking on a parity (as to
dividends) with the Series A Shares, except in accordance with a
purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
<PAGE>
7
(2) 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
(1) of this Section g, purchase or otherwise acquire such shares at such
time and in such manner.
Section h. FRACTIONAL SHARES. The Corporation may issue fractions
and certificates representing fractions of Series A Shares in integral multiples
of 1/100th of a Series A Share, or in lieu thereof, at the election of the Board
of Directors of the Corporation at the time of the first issue of any Series A
Shares, evidence such fractions by depositary receipts, pursuant to an
appropriate agreement between the Corporation and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all rights, privileges and preferences to which they would
be entitled as beneficial owners of Series A Shares. In the event that
fractional Series A Shares are issued, the holders thereof shall have all the
rights provided herein for holders of full Series A Shares in the proportion
that such fraction bears to a full share.
IN TESTIMONY WHEREOF, Anchor BanCorp Wisconsin Inc. has caused this
Statement to be signed under its corporate seal by its Chairman of the Board,
President and Chief Executive Officer and attested by its Vice President and
Secretary as of the 22nd day of July, 1997.
ANCHOR BANCORP WISCONSIN INC.
By
------------------------------
Name: Douglas J. Timmerman
Title: Chairman of the Board,
President and Chief Executive
Officer
ATTEST:
- ---------------------------
Name: J. Anthony Cattelino
Title: Vice President and
Secretary
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER JULY 22, 2007 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT (AS HEREINAFTER DEFINED)) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE AGREEMENT.]*/
Right Certificate
ANCHOR BANCORP WISCONSIN INC.
This certifies that , or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of July 22, 1997 (the "Rights Agreement"),
between Anchor Bancorp Wisconsin Inc., a Wisconsin corporation (the "Company"),
and Firstar Trust Co., a Wisconsin corporation (the "Rights Agent"), to purchase
from the Company at any time after the Separation Date (as such term is defined
in the Rights Agreement) and prior to the close of business (5:00 PM Milwaukee,
Wisconsin time) on July 22, 2007 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, nonassessable share of Series A Preferred Stock,
par value $0.10 per share ("Series A Share") of the Company, at a purchase price
of Two Hundred Dollars ($200.00) per one one-hundredth of a share (the "Purchase
Price"), upon presentation and surrender of this
- --------
*/ The portion of the legend in brackets shall be inserted if applicable and
shall replace the preceding sentence.
<PAGE>
B-2
Right Certificate with the Form of Election to Purchase and related Certificate
duly executed. The number of rights evidenced by this Right Certificate (and the
number of shares that may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of August 1, 1997, based on the Series A Shares as constituted at such
date.
Upon the occurrence of a Triggering Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (a) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(b) a transferee of any such Acquiring Person, Associate or Affiliate (other
than a bona fide purchaser for value who has no knowledge that the transferor
was an Acquiring Person or an Associate or Affiliate of an Acquiring Person) or
(c) under certain circumstances specified in the Rights Agreement, a transferee
of a person or entity who, after such transfer, became an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of Series A Shares or other securities or other property that
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
The Board may, at its option, at any time after the right of the
Company to redeem the Rights has expired or terminated (with certain exceptions)
exchange all or part of the then outstanding and exercisable Rights (other than
those held by the Acquiring Person and Affiliates and Associates of the
Acquiring Person) for Common Shares (as such term is defined in the Rights
Agreement) at an exchange ratio of one Common Share per Right, as adjusted.
Immediately upon the action of the Board ordering an exchange of the Rights, the
Rights affected by such order will no longer be exercisable and thereafter the
only right of the holders of such Rights will be to receive the Common Shares
issuable by the Company in exchange for such Rights.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights for not more than ninety (90) days at the election of the Company
and under certain circumstances specified in such Rights Agreement. Copies of
the Rights Agreement are on file at the above-
<PAGE>
B-3
mentioned office of the Rights Agent and are also available upon written request
to the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Series A Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If the Rights evidenced by this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed at a redemption price of One Cent
($0.01) per Right at any time prior to the close of business on the earlier to
occur of (a) 10 Business Days (as such term in defined in the Rights Agreement)
after the Shares Acquisition Date (as such term is defined in the Rights
Agreement) or (b) 15 business days following the commencement of a tender offer
or exchange offer if, upon consummation thereof, a person or group would be the
beneficial owner of 20% or more of the outstanding Common Shares, unless the
period for redemption is extended as permitted in the Rights Agreement.
Thereafter, the Board of Directors of the Company ("BOARD") may only redeem the
Rights in certain specified circumstances including in connection with certain
events not involving an Acquiring Person or an Affiliate or Associate of an
Acquiring Person. In addition, the Company's right of redemption may be
reinstated if, among other things, an Acquiring Person reduces his beneficial
ownership to ten percent (10%) or less of the outstanding Common Shares of the
Company in a transaction or series of transactions not involving the Company.
Immediately upon the action of the Board ordering redemption of the Rights, the
Rights will no longer be exercisable, except where the redemption is made in
connection with an event not involving an Acquiring Person or Affiliate or
Associate of an Acquiring Person (in which circumstance the effective time of
the redemption may be deferred); and, in general, thereafter the only right of
the holders of the Rights evidenced hereby will be to receive the Redemption
Price.
The terms of the Rights evidenced by this Certificate may be
supplemented or amended without the approval of any holder of the Rights (or the
Common Shares) as set forth in the Rights Agreement.
No fractional Series A Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-hundredth of a Series A Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made as provided in the Rights Agreement.
<PAGE>
B-4
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Series A
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the 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 signatures of the proper officers of the
Company.
Dated: ___________, [19][20]__
ANCHOR BANCORP WISCONSIN INC.
Attest________________
Name:
Title:
By___________________________
Name:
Title:
(Corporate Seal)
Countersigned
FIRSTAR TRUST CO.,
as Rights Agent
By___________________
<PAGE>
B-5
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________________________ hereby sells,
assigns and transfers unto _____________________________________
_________________________________________________________________________
(Please print name and address of Transferee)
____________________________________________________________ this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint __________________ attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power
of substitution.
Dated: _______________, [19][20]__
_____________________________
Signature
Signature Guaranteed:
<PAGE>
B-6
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(i) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
(ii) to the best knowledge of the undersigned, it [ ] did [ ] did
not acquire the Rights evidenced by this Right Certificate from any Person who
is, was or subsequently became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person.
Dated: _____________, [19][20]__ _________________________
Signature
NOTICE
The signature(s) to the foregoing Assignment and Certificate must
correspond to the name(s) as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
B-7
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: ANCHOR BANCORP WISCONSIN INC.
The undersigned hereby irrevocably elects to exercise _________
Rights represented by this Right Certificate to purchase the Series A Shares (or
fractions thereof) issuable upon the exercise of such Rights (or such other
securities of the Company or of any other entity that may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number: ______________________________
___________________________________________________________
(Please print name and address)
___________________________________________________________
___________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
<PAGE>
B-8
Please insert social security
or other identifying number: ______________________________
___________________________________________________________
(Please print name and address)
___________________________________________________________
___________________________________________________________
Dated: __________________, [19][20]__
________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);
(2) to the best knowledge of the undersigned, it [ ] did [ ] not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: ________________, [19][20]__
________________________
Signature
<PAGE>
B-9
NOTICE
------
The signature(s) to the foregoing Election to Purchase and
Certificate must correspond to the name(s) as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
<PAGE>
EXHIBIT C
ANCHOR BANCORP WISCONSIN INC.
Summary of Rights to Purchase Series A Preferred Stock
On July 22, 1997, the Board of Directors of Anchor BanCorp Wisconsin
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, par value $0.10 per share (a "Common Share"),
of the Company to stockholders of record at the close of business on August 1,
1997 (the "Record Date"). Except as set forth below, each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Preferred Stock, par value $0.10 per share ("Series A Shares"), at a
price of $200.00 (the "Purchase Price"), subject to adjustment. The Purchase
Price shall be paid in cash. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company and
Firstar Trust Co., as Rights Agent.
Initially, no separate Right Certificates will be distributed. Until
the earlier to occur of (a) 10 business days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding Common Shares or (b) 15 business days following
the commencement of a tender offer or exchange offer if, upon consummation
thereof, a person or group would be the beneficial owner of 20% or more of such
outstanding Common Shares (the earlier of such dates, subject to extension as
provided in the Rights Agreement, being called the "Separation Date"), the
Rights will be evidenced, with respect to any Common Shares outstanding as of
the Record Date, by the certificates representing such Common Shares. The Rights
Agreement provides that, until the Separation Date, the Rights will be
transferred with, and only with, Common Share certificates. From as soon as
practicable after the Record Date and until the Separation Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Separation Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date will also constitute the transfer of the Rights associated with
the Common Shares represented by such certificates. As soon as practicable
following the Separation 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 Separation Date and, thereafter, such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Separation Date and will
expire on July 22, 2007, unless earlier redeemed by the Company as described
below.
<PAGE>
2
In the event that, at any time following the Separation Date, (a)
the Company is the surviving corporation in a merger with an Acquiring Person
and the Company's Common Shares are not changed or exchanged, (b) a person
(other than the Company and its affiliates) becomes the beneficial owner of 25%
or more of the then outstanding Common Shares, (c) an Acquiring Person engages
in one or more "self-dealing" transactions as set forth in the Rights Agreement
or (d) during such time as there is an Acquiring Person, an event occurs that
results in such Acquiring Person's ownership interest being increased by more
than one percent (e.g., a reverse stock split), the Rights Agreement provides
that proper provision shall be made so that each holder of a Right will
thereafter be entitled to receive, upon exercise, Common Shares (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right.
In the event that, at any time following the first date of public
announcement by the Company or an Acquiring Person indicating that an Acquiring
Person has become such (the "SHARES ACQUISITION DATE"), (a) the Company engages
in a merger or other business combination transaction in which the Company is
not the surviving corporation, (b) the Company engages in a merger or other
business combination transaction with another person in which the Company is the
surviving corporation, but in which its Common Shares are changed or exchanged
or (c) 50% or more of the Company's assets or earning power is sold or
transferred, the Rights Agreement provides that proper provision shall be made
so that each holder of a Right shall thereafter have the right to receive, upon
the exercise thereof at the then current exercise price of the Right, common
shares of the acquiring company having a value equal to two times the exercise
price of the Right.
The Board may, at its option, at any time after the right of the
Board to redeem the Rights has expired or terminated (with certain exceptions),
exchange all or part of the then outstanding and exercisable Rights (other than
those held by the Acquiring Person and Affiliates and Associates of the
Acquiring Person) for Common Shares at a ratio of one Common Share per Right, as
adjusted; PROVIDED, HOWEVER, that such Right cannot be exercised once a Person,
together with such Person's Affiliates and Associates, becomes the owner of 50%
or more of the Outstanding Common Shares. If the Board authorizes such an
exchange, the Rights will immediately cease to be exercisable.
Notwithstanding any of the foregoing, following the occurrence of
any of the events set forth in the fourth and fifth paragraphs of this Summary,
any Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person shall immediately
become null and void.
The Purchase Price payable, and the number of Series A Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (a) in the event of a
dividend of
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3
Series A Shares on, or a subdivision, combination or reclassification of, the
Series A Shares, (b) upon the grant to holders of the Series A Shares of certain
rights or warrants to subscribe for Series A Shares or securities convertible
into Series A Shares at less than the current market price of the Series A
Shares or (c) upon the dis tribution to holders of the Series A Shares of debt
securities or assets (excluding regular quarterly cash dividends and dividends
payable in Series A Shares) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares that are not integral multiples of one
one-hundredth of a Series A Share will be issued and, in lieu thereof, an
adjustment in cash will be made based on the closing price of the Series A
Shares on the last trading date prior to the date of exercise.
At any time after the date of the Rights Agreement until 10 Business
Days following the Shares Acquisition Date, unless the period for redemption is
extended as provided in the Rights Agreement, the Board of Directors of the
Company (the "BOARD"), with the concurrence of a majority of the Independent
Directors (those members of the Board who are not officers or employees of the
Company or of any Subsidiary of the Company and who are not Acquiring Persons or
their Affiliates, Associates, nominees or representatives, and who either (a)
were members of the Board prior to the adoption of the Rights Plan or (b) were
subsequently elected to the Board and were recommended for election or approved
by a majority of the Independent Directors then on the Board), may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right, subject to
adjustment (the "REDEMPTION PRICE"). Thereafter, the Board may only redeem the
Rights in certain specified circumstances including in connection with certain
events not involving an Acquiring Person or an Affiliate or Associate of an
Acquiring Person. In addition, the Company's right of redemption may be
reinstated if (a) an Acquiring Person reduces its beneficial ownership to 10% or
less of the outstanding Common Shares in a transaction or series of transactions
not involving the Company and (b) there is at such time no other Acquiring
Person. The Rights Agreement may also be amended, as described below, to extend
the period of redemption. Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will no longer be exercisable, except upon
the occurrence of certain events that have the effect of deferring the effective
time of the redemption. In general, thereafter 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 shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to shareholders or to the Company, shareholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become
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4
exercisable for Common Shares (or other consideration) of the Company or for
common shares of the Acquiring Person as set forth above.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board with the concurrence of a majority of the Independent Directors or by
special approval of the stockholders of the Company prior to the Separation
Date. Thereafter, the period during which the Rights may be redeemed may be
extended (by action of the Board, with the concurrence of a majority of the
Independent Directors or by special approval of the stockholders of the
Company), and other provisions of the Rights Agreement may be amended by action
of the Board with the concurrence of a majority of the Independent Directors or
by special approval of the shareholders of the Company; PROVIDED, HOWEVER, that
(a) such amendment will not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person) and (b) no amendment shall be
made at such time as the Rights are no longer redeemable (except for the
possibility of the right of redemption being reinstated as described above).
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
