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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
Resource Bancshares Mortgage Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
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Delaware 57-0962375
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(State of Incorporation or Organization) (IRS Employer Identification No.)
7909 Parklane Road
Columbia, South Carolina 29223
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(Address of Principal Executive Offices) (Zip Code)
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If this form relates to the If this form relates to the registration
registration of a class of securities of a class of securities pursuant to Section
pursuant to Section 12(b) of the Exchange 12(g) of the Exchange Act and is effective
Act and is effective pursuant to General pursuant to General Instruction A.(d), please
Instruction A.(c), please check the check the following box. X
following box. ---
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Securities Act registration statement file number to which this form relates:
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
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Title of Each Class to Name of Each Exchange on Which
be so Registered Each Class is to be Registered
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None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On February 6, 1998, the Board of Directors of Resource Bancshares
Mortgage Group, Inc. (the "Company"), authorized the issuance of one right (a
"Right") with respect to each outstanding share of common stock, par value of
0.01 per share ("Common Stock") of the Company as of the close of business on
February 6, 1998. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") dated February 6, 1998, between the
Company and First Chicago Trust Company of New York (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
certificates of outstanding shares of Common Stock and no separate Right
Certificate will be distributed. The Rights will become exercisable and separate
from the shares of Common Stock upon the earlier of (i) ten days after the date
(the "Stock Acquisition Date") of a public announcement that a person or group
of affiliated or associated persons has acquired beneficial ownership of 15% or
more of the outstanding Common Stock of the Company (such person or group being
hereinafter referred to as an "Acquiring Person"); or (ii) ten business days (or
such later date as the Board may determine) following the commencement or
announcement of an intention to make a tender offer or exchange offer the
consummation of which would result in a person or group becoming the beneficial
owner of 15% or more of the outstanding Common Stock (the earlier of such dates
in clauses (i) and (ii) being called the "Distribution Date"). Shares of Common
Stock beneficially owned by the Company or any subsidiary of the Company will
not be considered outstanding for purposes of calculating the percentage
ownership of any person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced by the certificates for the Common
Stock, (ii) the Rights will be transferred with and only with the Common Stock,
(iii) new Common Stock certificates issued after February 16, 1998, upon
transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for Common Stock outstanding as of February 16,
1998, even without such notation, will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. When they
become exercisable, each Right initially entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock $.01 par value per share ("Preferred Stock") of
the Company at a price of $83.00 per one one-hundredth of a share of Preferred
Stock (the "Purchase Price"), subject to adjustment. The Rights will expire on
February 16, 2008 (the "Final Expiration Date"), unless the Final Expiration
Date is extended or the Rights are earlier redeemed or exchanged
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by the Company as described below.
If a Person were to become an Acquiring Person, each Right then
outstanding (other than Rights beneficially owned by the Acquiring Person which
would become null and void) would become a right to buy for the Purchase Price
that number of shares of Common Stock that at the time of such acquisition would
have a market value of two times the Purchase Price. If, however, the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an Acquiring Person, has become such inadvertently, and such Person
divests a sufficient number of shares of Common Stock by such deadline as the
Board of Directors shall set, then such Person shall not be deemed to be an
Acquiring Person for any purposes of the Rights Agreement.
If the Company is acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power are
sold other than in the ordinary course of business, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price, that number of
shares of common stock of the acquiring company which at the time of such
transaction would have a market value of two times the Purchase Price.
Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock of the Company: (i) the
Company, any subsidiary of the Company, or any employee benefit plan of the
Company or of any subsidiary of the Company and (ii) any person who would
otherwise become an Acquiring Person solely by virtue of a reduction in the
number of outstanding shares of Common Stock unless and until such person shall
become the beneficial owner of any additional shares of Common Stock.
REGISTRATION. The offer and sale of the Preferred Stock, Common Stock
or other securities issuable upon exercise of the Rights will be registered with
the Securities and Exchange Commission but such registration will not be
effective until the Rights become exercisable. As described above, however, the
Rights will not be transferable separately from the Common Stock until the
Distribution Date.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of shares of Preferred
Stock, Common Stock or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
EXCHANGE OPTION. At any time after a Person becomes an Acquiring Person
and before the acquisition by a Person of 50% or more of the outstanding Common
Stock of the Company, the Board of Directors may, at its option, issue Common
Stock or common stock equivalents of the Company in mandatory redemption of, or
in exchange for, all or part of the then outstanding exercisable Rights (other
than Rights owned by such Acquiring Person which would become null and void) at
an exchange ratio of one share of Common Stock, or common stock equivalents
equal to one share of Common Stock, per Right, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the Stock Acquisition Date,
the Board of
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Directors of the Company may redeem all, but not less than all, of the then
outstanding Rights at a price of $.01 per Right (the "Redemption Price").
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the
Company without the consent of the holders of the Rights, except that after the
Stock Acquisition Date no such amendment may adversely affect the interests of
holders of the Rights.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B thereto the form
of Right Certificate, is attached as Exhibit 1 to this Form 8-A and is
incorporated herein by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
form of the Rights Agreement and the exhibits thereto.
Capitalized terms in this description are defined in the Rights Agreement.
ITEM 2. EXHIBITS.
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Exhibit No. Description of Exhibit
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4.1 Rights Agreement dated as of February 6, 1998 between the
Company and First Chicago Trust Company of New York, as Rights
Agent, which includes as EXHIBIT A the Form of Certificate of
Designations of the Preferred Stock, as EXHIBIT B the Form of
Right Certificate and as EXHIBIT C the Summary of Rights to
Purchase Preferred Stock.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
Date: February 9, 1998 By: /s/ Steven F. Herbert
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Name: Steven F. Herbert
Title: Senior Executive Vice President
and Chief Financial Officer
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INDEX TO EXHIBITS
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Exhibit No. Description of Exhibit
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4.1 Rights Agreement dated as of February 6, 1998 between the
Company and First Chicago Trust Company of New York, as Rights
Agent, which includes as EXHIBIT A the Form of Certificate of
Designations of the Preferred Stock, as EXHIBIT B the Form of
Right Certificate and as EXHIBIT C the Summary of Rights to
Purchase Preferred Stock.
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EXHIBIT 4.1
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RESOURCE BANCSHARES MORTGAGE GROUP, INC.
AND
FIRST CHICAGO TRUST COMPANY OF NEW YORK
RIGHTS AGENT
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RIGHTS AGREEMENT
DATED AS OF FEBRUARY 6, 1998
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Table of Contents
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Section Page
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Section 1. Certain Definitions .................................................................. 1
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Section 2. Appointment of Rights Agent .......................................................... 7
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Section 3. Issuance of Right Certificates ....................................................... 7
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Section 4. Form of Right Certificates ........................................................... 10
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Section 5. Countersignature and Registration .................................................... 11
---------------------------------
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates
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Mutilated, Destroyed, Lost or Stolen Right Certificates ............................. 12
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights ........................ 14
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Section 8. Cancellation and Destruction of Right Certificates ................................... 17
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Section 9. Reservation and Availability of Capital Stock ........................................ 17
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Section 10. Preferred Stock Record Date ........................................................ 20
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Section 11. Adjustments to Number and Kind of Shares. Number of Rights or Purchase Price ....... 20
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Section 12. Certification of Adjustments ........................................................ 34
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Section 13. Consolidation. Merger or Sale or Transfer of Assets or Earning Power ............... 35
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Section 14. Fractional Rights and Fractional Shares ............................................. 41
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Section 15. Rights of Action .................................................................... 43
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Section 16. Agreement of Right Holders .......................................................... 44
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Section 17. Right Certificate Holder Not Deemed a Stockholder ................................... 45
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Section 18. Concerning the Rights Agent ......................................................... 45
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Section 19. Merger or Consolidation or Change of Name of Rights Agent ........................... 46
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Section 20. Duties of Rights Agent .............................................................. 47
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Section 21. Change of Rights Agent .............................................................. 50
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Section 22. Issuance of New Right Certificates................................................... 52
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Section 23. Redemption and Termination .......................................................... 52
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Section 24. Exchange ............................................................................ 53
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Section 25. Notice of Proposed Actions .......................................................... 55
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Section 26. Notices............................................................................... 56
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Section 27. Supplements and Amendments............................................................ 57
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Section 28. Determinations and Actions by the Board............................................... 58
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Section 29. Successors............................................................................ 59
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Section 30. Benefits of this Agreement............................................................ 59
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Section 31. Governing Law......................................................................... 59
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Section 32. Counterparts.......................................................................... 59
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Section 33. Descriptive Headings.................................................................. 59
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Section 34. Severability.......................................................................... 59
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Exhibit A -- Form of Certificate of Designations
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights To Purchase Preferred Stock
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RIGHTS AGREEMENT
This Agreement (this "Agreement"), dated as of February 6, 1998,
between RESOURCE BANCSHARES MORTGAGE GROUP, INC., a Delaware corporation (the
"Company"), and FIRST CHICAGO TRUST COMPANY OF NEW YORK, a New York corporation
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (i) authorized the
issuance and declared a dividend distribution of one right (a "Right") for each
share of the Common Stock (as defined herein), of the Company outstanding as of
the Close of Business (as defined herein) on February 16, 1998 (the "Record
Date"), each Right initially representing the right to purchase one
one-hundredth of a share of Preferred Stock (as defined herein), and (ii)
further authorized the issuance of one Right with respect to each share of
Common Stock of the Company that shall become outstanding between the Record
Date, and the earliest of the Distribution Date, the Expiration Date or the
Final Expiration Date (each such term as defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the
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outstanding Common Stock of the Company; provided, however, that (i) the term
"Acquiring Person" shall not include an Exempt Person or a Permitted Holder;
(ii) a Person shall not be deemed to have become an Acquiring Person for any
purpose of this Agreement if the Board of Directors in its good faith judgment
determines that a Person has inadvertently become the Beneficial Owner of 15% or
more of the outstanding Common Stock of the Company (or in the case of a
Permitted Holder, has inadvertently acquired additional shares of Common Stock
of the Company so that it is no longer a Permitted Holder) and within ten days
after the date upon which the Company shall first become aware of the occurrence
of such an event, the Board of Directors in its sole discretion provides such
Person with a fifteen day period to divest a sufficient number of shares so that
such Person no longer is the Beneficial Owner of 15% or more of the outstanding
Common Stock of the Company (or in the case of a Permitted Holder, to divest all
shares of Common Stock of the Company which prevent such Person from being a
Permitted Holder), and such Person has so divested such shares of Common Stock
of the Company at the end of any such fifteen day period and has not acquired
any additional shares of Common Stock of the Company prior to the end of such
fifteen day period; and (iii) shares of Common Stock Beneficially Owned by the
Company or any Subsidiary of the Company shall not be considered outstanding
for purposes of calculating any Person's percentage ownership of the
outstanding Common Stock.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended ("Exchange Act"), as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own," any securities:
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(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to "Beneficially
Own," securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates pursuant
to, and in accordance with the applicable rules and regulations promulgated
under the Exchange Act, until such tendered securities are accepted for purchase
or exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own," any
securities if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable by such Person on Schedule 13D or Schedule 13G
under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of
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acquiring, holding, voting (except as described in the proviso to clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing of any securities of the
Company; provided, however, that nothing in this paragraph (d) shall cause a
Person engaged in business as an underwriter of securities to be the Beneficial
Owner of, or to Beneficially Own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of 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.,
Columbia, South Carolina time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Columbia, South Carolina
time, on the next succeeding Business Day.
(g) "Common Stock," when used with reference to the Company, shall
mean the common stock, par value $.01 per share, of the Company and, when used
with reference to any Person other than the Company, shall mean the capital
stock or other equity interests with the greatest per share or per unit voting
power of such other Person or, if such other Person is a Subsidiary of or is
controlled by another Person, the Person or Persons which ultimately controls
such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii).
(i) "Current Market Price" shall have the meaning set forth in
Section 11(d).
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
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(k) "Distribution Date" shall have the meaning set forth in
Section 3(a).
(l) "Equivalent Preferred Stock" shall have the meaning set forth
in Section 11(b).
(m) "Exchange Act" shall have the meaning set forth in Section
1(c).
(n) "Exempt Person" shall mean 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, established or holding
Common Stock for or pursuant to the terms of any such plan.
(o) "Expiration Date" shall have the meaning set forth in Section
7(a).
(p) "Final Expiration Date" shall have the meaning set forth in
Section 7(a).
(q) "Nasdaq Stock Market" shall have the meaning set forth in
Section 9(b).
(r) "Permitted Holder" shall mean: any Person who would otherwise
become an Acquiring Person solely by virtue of a reduction in the number of
outstanding shares of Common Stock; provided, however, that such Person shall
not be a Permitted Holder if, subsequent to such reduction, such Person shall
become the Beneficial Owner of any additional shares of Common Stock.
(s) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(t) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company, having
the rights, preferences and limitations set forth in the Certificate of
Designations attached to this Agreement as Exhibit A, and, to the extent there
are not a sufficient number of shares of Series A Junior Participating
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Preferred Stock authorized to permit the full exercise of the then outstanding
Rights, any other series of preferred stock of the Company designated for such
purpose by the Board of Directors of the Company containing terms substantially
similar to the terms of the Series A Junior Participating Preferred Stock.
(u) "Principal Party" shall have the meaning set forth in Section
13(b).
(v) "Purchase Price" shall have the meaning set forth in Section
4(a).
(w) "Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Agreement.
(x) "Redemption Price" shall have the meaning set forth in Section
23(a).
(y) "Right Certificate" shall have the meaning set forth in
Section 3(a).
(z) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii).
(aa) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii).
(bb) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a).
(cc) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(dd) "Stock Acquisition Date" shall mean the first date of a
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided, however, that if such Person is determined
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not to have become an Acquiring Person pursuant to Section 1(a), then no Stock
Acquisition Date shall be deemed to have occurred.
(ee) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii).
(ff) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person.
(gg) "Summary of Rights" shall have the meaning set forth in
Section 3(b).
(hh) "Trading Day" shall have the meaning set forth in Section
11(d).
(ii) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
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, shall prior to the Distribution Date also be the
holders of the Common Stock) in accordance with the terms and conditions of this
Agreement, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable. If the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
day after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date
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as may be determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than an Exempt Person) of, or the first public announcement of
the intent of any Person (other than an Exempt Person) to commence, a tender or
exchange offer upon the successful consummation of which such Person, together
with its Affiliates and Associates, would be the Beneficial Owner of 15% or more
of the outstanding Common Stock (irrespective of whether any shares are actually
purchased pursuant to such offer) (the earlier of such dates described in
clauses (i) and (ii) being referred to herein as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(c)) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) each Right
(and the right to receive separate Right Certificates) will be transferable only
in connection with the transfer of a share (subject to adjustment as hereinafter
provided) of Common Stock. As soon as practicable after the Distribution Date,
the Company will prepare and execute, and the Rights Agent will send, by first
class, insured, postage prepaid mail, to each record holder of the Common Stock
as of the Close of Business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a Right
Certificate in substantially the form of Exhibit B hereto ("Right Certificate")
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates and will be transferrable
separately from the Common Stock.
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(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Stock as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Company.
(c) With respect to certificates for Common Stock outstanding as
of the Record Date, until the Distribution Date (or, if earlier, the Expiration
Date or the Final Expiration Date), the Rights will be evidenced by certificates
for Common Stock registered in the names of the holders thereof together with a
copy of the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the surrender for transfer
of the Rights associated with the Common Stock represented thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date, but prior to the earliest of the Distribution Date, the
Expiration 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 Resource Bancshares Mortgage Group,
Inc. and First Chicago Trust Company of New York as
Rights Agent, dated as of February 6, 1998 (the "Rights
Agreement"), the terms of which are incorporated herein
by reference and a copy of which is on file at the
principal executive office of Resource Bancshares
Mortgage Group, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be
evidenced by separate certificates
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and will no longer be evidenced by this certificate.
Resource Bancshares Mortgage Group, Inc. will mail to
the holder of this certificate a copy of the Rights
Agreement without charge after receipt by it of a
written request therefor. Under certain circumstances as
provided in the Rights Agreement, Rights issued to or
beneficially owned by Acquiring Persons or their
Associates or Affiliates (as such terms are defined in
the Rights Agreement) or any subsequent holder of such
Rights will become null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Expiration Date, the Final Expiration Date or the
Distribution Date, be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented thereby. If
the Company purchases or acquires any Common Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with shares of Common Stock which are no
longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in the form set forth in 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 law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or trading system on which the
Rights may from time to
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time be listed or traded, or to conform to usage. Subject to the provisions of
Sections 11 and 22, the Right Certificates whenever distributed shall be dated
the Record Date and on their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Preferred Stock as shall be set
forth therein at the price per one one-hundredth of a share of Preferred Stock
set forth therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided therein and in this Rights Agreement.
(b) Notwithstanding any other provision of this Rights Agreement,
any Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a nominee of any
of the foregoing) the following legend:
The Beneficial Owner of the Rights represented by this
Right Certificate is an Acquiring Person or an Affiliate
or Associate (as such terms are defined in the Rights
Agreement) of an Acquiring Person or a subsequent holder
of such Right Certificate beneficially owned by such
Persons. Accordingly, under circumstances specified in
the Rights Agreement, this Right Certificate and the
Rights represented hereby will become null and void.
Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
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(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, Vice Chairman, Chief Executive Officer, President or
any Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned (which countersignature may be a facsimile) by the Rights Agent
and shall not be valid for any purpose unless so countersigned. If 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 with the same
force and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the date of each
of the Right Certificates, and the certificate numbers for each of the Right
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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(a) Subject to the provisions of Section 14, at any time after the
Close of Business on the Distribution Date and at or prior to the Close of
Business on the earlier of the Expiration 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 one one-hundredths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender the
Right Certificate at the principal office of the Rights Agent with the form of
assignment on the reverse side thereof (or enclose with such Right Certificate a
written instrument of transfer in a form satisfactory to the Company and the
Rights Agent), duly executed by the registered holder thereof or his attorney
duly authorized in writing, and with such signature duly guaranteed. Any
registered holder desiring to 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 split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign (which countersignature may be a facsimile) 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
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of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them, and, if requested by the Company, 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 execute and deliver a new Right Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including without limitation, the restrictions on
exercisability set forth in Section 9(b), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights Agent
at the principal office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
earlier of (i) the Close of Business on February 16, 2008 ("Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
(such date being herein referred to as the "Expiration Date"), or (iii) the time
at which such Rights are exchanged as provided in Section 24.
(b) The Purchase Price shall initially be $83.00 for each one
one-hundredth of a share of Preferred Stock issued pursuant to the exercise of a
Right. The Purchase Price and the number of one one-hundredths of a share of
Preferred Stock or other securities or consideration to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as
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provided in Sections 11 and 13. The Purchase Price shall be payable in lawful
money of the United States of America, in accordance with Section 7(c).
(c) Except as provided in Section 7(d), upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the
Purchase Price or so much thereof as is necessary for the shares or other
securities or assets to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company or the Rights Agent, the Rights Agent, subject to Section
20(j), shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of shares of Preferred
Stock so elected to be purchased and the Company will comply and hereby
authorizes and directs such transfer agent to comply with all such requests, or
(B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of shares of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be paid
in lieu of issuance of fractional shares in accordance with Section 14, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt promptly deliver such
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cash to or upon the order of the registered holder of such Right Certificate;
provided, however, that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13, the Rights Agent shall promptly take
the appropriate actions corresponding to the foregoing clauses (i) through (iv).
If the Company is obligated to issue other securities (including Common Stock)
of the Company, pay cash and/or distribute other property pursuant to Section
11(a), the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that, upon any exercise of Rights,
a number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) If 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.
(e) Notwithstanding anything in this Agreement to the contrary,
any Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(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
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<PAGE> 20
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 Rights 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 shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy or cause to be destroyed such canceled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available, out of and to the extent
of its authorized and unissued shares of Preferred Stock not reserved for
another purpose (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock or other securities) or shares
held in its
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<PAGE> 21
treasury, the number of shares of Preferred Stock (and, following the occurrence
of a Triggering Event, shares of Common Stock or other securities) that, as
provided in this Agreement, including Section 11(a)(iii), will be sufficient to
permit the exercise in full of all outstanding Rights; provided, however, that
the Company shall not be required to reserve and keep available shares of Common
Stock or other securities sufficient to permit the exercise in full of all
outstanding Rights pursuant to the adjustments set forth in Section 11(a)(ii),
Section 11(a)(iii) or Section 13 unless, and only to the extent that, the Rights
become exercisable pursuant to Section 7(a) following such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, Common
Stock or other securities) issued or reserved for issuance upon exercise thereof
to be listed by The Nasdaq National Market (the "Nasdaq Stock Market") or any
other national securities exchange upon notice of issuance upon such exercise
and (ii) if then necessary to permit the offer and issuance of such shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities), register and qualify such shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock or other
securities) under the Securities Act and any applicable state securities or
"blue sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the Expiration Date or the Final Expiration Date
of the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety days, the exercisability of the Rights in order to prepare and
file a registration
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<PAGE> 22
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock (and
following the occurrence of a Triggering Event, Common Stock or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any shares of Preferred Stock (or shares of Common Stock 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 which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates for Preferred Stock (or shares
of Common Stock or other securities, as the case may be) upon exercise of Rights
in a name other than that of, the registered holder of the Right Certificate,
and the Company shall not be required to issue or deliver a Right Certificate or
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certificate for Preferred Stock (or shares of Common Stock or other securities,
as the case may be) to a person other than such registered holder until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or shares of Common Stock 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 Preferred
Stock (or Common Stock 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
Preferred Stock (or Common Stock 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 Preferred Stock (or Common Stock
or other securities) transfer books of the Company are open.
Section 11. Adjustments to Number and Kind of Shares. Number of Rights or
Purchase Price. The number and kind of shares subject to purchase upon the
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
(a)(i) If the Company shall at any time after the Record Date (A)
declare or pay any dividend on Preferred Stock payable in shares of Preferred
Stock, (B) subdivide or
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split the outstanding shares of Preferred Stock into a greater number of shares,
(C) combine or consolidate the outstanding shares of Preferred Stock into a
smaller number of shares or effect a reverse split of the outstanding shares of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (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 Section 7(e) or this
Section 11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of the
Company were open, the holder thereof would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one such Right be less than the per share par value
of the shares of capital stock of the Company issuable upon exercise of the
Right. If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person shall become an Acquiring Person (a
"Section 11(a)(ii) Event"), then subject to Section 23(a), and except as
otherwise provided in this
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Section 11, each holder of a Right (except as provided below and in Section
7(e)) shall thereafter have a right to receive for each Right, upon exercise
thereof in accordance with the terms of this Agreement and payment of a price
equal to the then current Purchase Price multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right was theretofore
exercisable, in lieu of the number of one one-hundredths of a share of Preferred
Stock for which a Right was theretofore exercisable, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (such product, following such first occurrence, shall be
referred to as the "Purchase Price" with respect to each Right for all purposes
of this Agreement) by 50% of the Current Market Price per share of Common Stock
on the date of such first occurrence (such number of shares is herein called the
"Adjustment Shares"); provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence; and
provided, further, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then only
the provisions of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). Notwithstanding the foregoing, upon the
occurrence of a Section 11(a)(ii) Event, any Rights that are or were at any
time, on or after the earlier of the Stock Acquisition Date or the Distribution
Date, Beneficially Owned by the Acquiring Person or any Associate or Affiliate
of the Acquiring Person shall become null and void and any holder of
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such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement.
(iii) If the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date hereof to
which the Company is a party, the Company shall: (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
and (B) with respect to each Right (subject to Section 7(e)), upon the exercise
of such Right and payment of the applicable Purchase Price, make adequate
provision to substitute for the Adjustment Shares (1) cash, (2) a reduction in
the Purchase Price, (3) equity securities of the Company (including, without
limitation, shares, or units of shares, of special or preferred stock of the
Company which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the Common Stock, are deemed in good faith
by the Board of Directors of the Company to have substantially the same value as
shares of Common Stock (such shares or units of shares of preferred stock are
herein called "Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having an aggregate
value which, when added to the value of the shares of Common Stock actually
issued upon exercise of such Right, shall have an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price), where
such aggregate value has been determined in good faith by the Board of Directors
of the Company based upon the advice of a nationally recognized independent
investment banking
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<PAGE> 27
firm selected in good faith by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the first occurrence
of a Section 11(a)(ii) Event (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the excess of the Current Value
over the Purchase Price. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, the 30 day period set forth above may be extended to the extent
necessary, but not more than 120 days after the Section 11(a)(ii) Trigger Date,
in order that the Company may seek stockholder approval for the authorization of
such additional shares (such 30 day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentence of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
and the last sentence of Section 11(a)(ii), that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to 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
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Common Stock shall be the Current Market Price per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the per share or per unit value of any
"Common Stock Equivalent" shall be deemed to equal the Current Market Price per
share of the Common Stock on such date. The Board of Directors may, but shall
not be required to, establish procedures to allocate the right to receive Common
Stock upon the exercise of the Rights among holders of Rights pursuant to this
Section 11(a)(iii).
(b) If the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Preferred Stock, shares having the same
rights, privileges and preferences as the Preferred Stock ("Equivalent Preferred
Stock") or securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per share of Preferred Stock or Equivalent Preferred Stock (or
having a conversion price per share, if a security convertible into Preferred
Stock or Equivalent Preferred Stock) less than the Current Market Price per
share of Preferred Stock 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 shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock (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 shares of Preferred
Stock outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered
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for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and if such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) If the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of Preferred
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed
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or of such subscription rights or warrants applicable to a share of Preferred
Stock and the denominator of which shall be such Current Market Price per share
of Preferred Stock. Such adjustments shall be made successively whenever such a
record date is fixed; and if such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price" per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of the Common Stock for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date, and for
purpose of computations made pursuant to Section 11(a)(iii), the "Current Market
Price" per share of the Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of the Common Stock for the ten
consecutive Trading Days immediately following such date; provided, however,
that if the Current Market Price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of
(i) any dividend or distribution on the Common Stock (other than a regular
quarterly cash dividend and other than the Rights), or (ii) any subdivision,
combination or reclassification of the Common Stock, and prior to the expiration
of the requisite 30 Trading Day or ten Trading Day period, as set forth above,
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification occurs, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
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average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted sale price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc., Automated Quotations System or such other system then in use, or,
if on any such date the shares of Common Stock 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 Stock selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange or national market system on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange or national market system, a Business Day. If the
Common Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company whose
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determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be determined in the
same manner as set forth for the Common Stock in Section 11(d)(i) hereof (other
than the last sentence thereof). If the Current Market Price per share or one
one-hundredth of a share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in Section 11(d)(i) hereof, the "Current Market
Price" per share of Preferred Stock shall be conclusively deemed to be an amount
equal to 100 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current Market Price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the
"Current Market Price" of one one-hundredth of a share of Preferred Stock shall
be equal to the "Current Market Price" of one share of Preferred Stock divided
by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
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account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other security or one millionth of a share of Preferred Stock,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Preferred Stock contained in Section
11(a), (b), (c), (e), (g), (h), (i), (j), (k) (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock 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
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adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x) the
number of shares 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 or any adjustment to the number of one one-hundredths of a
share of Preferred Stock for which a Right may be exercised, to adjust the
number of Rights, in lieu of any adjustment in the number of one one-hundredths
of a share of Preferred Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred Stock
for which such Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
ten 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
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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, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-hundredths of a
share of Preferred Stock and the number of one hundredths of a share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number of
one one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action, including using its
reasonable best efforts to obtain any required stockholder approvals, which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and
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legally issue fully paid and nonassessable one one-hundredths of a share of
Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the 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 of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
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(n) The Company covenants and agrees that it shall not, at any
time after the Stock Acquisition Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions not in the ordinary course of
the Company's business, assets, cash flow or earning power aggregating more than
50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)), if (x) 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 which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or Section 27,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is made
as provided in Sections 11 and 13, the Company shall (a) promptly prepare a
certificate setting forth such
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adjustment and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock or Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of Common
Stock) in accordance with Section 26. Notwithstanding the foregoing sentence,
the failure of the Company to give such notice shall not affect the validity of
or the force or effect of or the requirement for such adjustment. The Rights
Agent shall be fully protected in relying on any certificate prepared by the
Company pursuant to Sections 11 and 13 and on any adjustment therein contained.
Any adjustment to be made pursuant to Sections 11 and 13 of this Agreement shall
be effective as of the date of the event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If at any time on or after the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person or Persons (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o)), and the Company shall not be
the surviving or continuing corporation of such consolidation or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), shall consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or of the
Company or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of
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such Person (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o)), in one transaction
or a series of related transactions not in the ordinary course of the Company's
business, assets, cash flow, or earning power aggregating more than 50% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken as
a whole), then, on the first occurrence of any such event, proper provision
shall be made so that (i) each holder of record of a Right, except as provided
in Section 7(e), shall thereafter have the right to receive, upon the exercise
thereof and payment of the Purchase Price in accordance with the terms of this
Agreement, such number of shares of validly issued, fully paid and nonassessable
and freely tradeable Common Stock of the Principal Party (as defined herein) not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, 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 share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event hereof has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
Purchase Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such first
occurrence of a Section 11(a)(ii) Event) and (2) dividing that product (such
product, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined as provided in Section
11(d) with respect to the Common Stock) per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event (or the
fair market value on such date of other
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securities or property of the Principal Party, as provided for herein); provided
that the Purchase Price and the number of shares of common stock of such
Principal Party issuable upon exercise of each Right shall be further adjusted
as provided in this Agreement to reflect any events occurring after the date of
the first occurrence of a Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" for all purposes of this Agreement shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall only apply to such Principal Party following the
first occurrence of a Section 13 Event; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock in accordance with Section 9) 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 shares of Common Stock thereafter deliverable upon
the exercise of the Rights; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had he, at the
time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be
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necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property.
(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): (A) the Person that is the issuer
of any securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest market value or (B) if no
securities are so issued, (x) the Person that is the other party to the merger
or consolidation and that survives said merger or consolidation, or, if there is
more than one such Person, the Person the Common Stock of which has the greatest
market value or (y) if the Person that is the other party to the merger or
consolidation does not survive the merger or consolidation, the Person that does
survive the merger or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in clause (z)
of the first sentence in 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, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case described in the foregoing
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time and
has not been continuously over the preceding 12-month period registered under
Section 12 of the
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Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of
which are and have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) unless the Principal Party shall
have a sufficient number of authorized shares of its Common Stock 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 the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) shall promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and further providing
that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act)
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until the date of expiration of the Rights, and similarly comply with applicable
state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of the Rights to
be listed by a national securities exchange or admitted for trading on the
Nasdaq Stock Market;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights. If any of the
transactions described in Section 13(a) shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii), the Rights which
have not theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a). The provisions of this Section 13 shall
similarly apply to all successive mergers, consolidations, sales, transfers or
other Section 13 Events.
(d) Furthermore, if the Principal Party which is to be a party to
a transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate
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affairs, which provision would have the effect of (i) causing such Principal
Party to issue, in connection with, or as a consequence of, the consummation of
a transaction referred to in this Section 13, shares of Common Stock of such
Principal Party at less than the then Current Market Price per share (determined
pursuant to Section 11(d)(i)) or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such then Current Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the Common Stock of such Principal Party pursuant to the
provisions of this Section 13; then, in such event, the Company hereby agrees
with each holder of Rights that it shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the holders of record 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 then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a whole Right shall be determined in the same manner as
the Current Market Price of a share of Common Stock shall be determined pursuant
to Section 11(d)(i).
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(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock) upon exercise of the Rights, or to
exchange the Rights pursuant to Section 24 of this Agreement for fractions of
Common Stock. Fractions of shares of Preferred Stock in integral multiples of
one one-hundredth of a share of Preferred Stock 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 shares of Preferred Stock. With respect to fractional
shares of Preferred Stock that are not integral multiples of one one-hundredth
of a share of Preferred Stock, if the Company does not issue fractional shares
or depositary receipts in lieu thereof, the Company shall pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-hundredth of a share of Preferred Stock. For purposes of
this Section 14(b), the current market value of one one-hundredth of a share of
Preferred Stock shall be the Current Market Price of one one-hundredth of a
share of Preferred Stock (as determined pursuant to Section 11(d)(ii)).
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, 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
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of the current market value of one share of Common Stock. For the purposes of
this Section 14(c), the current market value of one share of Common Stock shall
be the Current Market Price of a share of Common Stock (as determined pursuant
to Section 11(d)(i) hereof).
(d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares (other
than fractions which are integral multiples of one one-hundredths of a share of
Preferred Stock) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of record of the Common
Stock); and any holder of record of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent
or of the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and, accordingly, that they 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.
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Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in 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
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performance of such obligation; provided, however, that the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder
of a Right or a Right Certificate, as such, shall be entitled to vote, receive
dividends in respect of or be deemed for any purpose to be the holder of
Preferred Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as set forth in Section 25), or to receive dividends or
subscription rights in respect of any such stock or securities, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions of this Agreement.
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 to be
done by the Rights Agent in connection with the
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acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate, certificate for Common Stock or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, guaranteed, verified or acknowledged, by the proper Person or
Persons.
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 or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. If at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights
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<PAGE> 50
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) If 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 such Right Certificates so countersigned; and if 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 or its own in-house counsel), 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, Vice Chairman,
Chief
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<PAGE> 51
Executive Officer, President, any Vice President, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
or any adjustment required under the provisions hereof or responsible for the
manner, method or amount of any such change or adjustment or the ascertaining of
the existence of facts that would require any such change in the exercisability
of the Rights or any change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any such change
or adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or other securities to be
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<PAGE> 52
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Common Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman, Vice Chairman, the Chief Executive Officer, the President,
any Vice President, the Secretary or any Assistant Secretary of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or
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agents, and the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, 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 Stock and the Preferred Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or any successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and the Preferred Stock 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. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such
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<PAGE> 54
appointment. If the Company shall fail to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent Rights Agent or
the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
any State thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has, together with its
affiliates, at the time of its appointment as Rights Agent a combined capital
and surplus of at least $100 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred Stock, 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.
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<PAGE> 55
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Expiration Date, the Purchase Price per share and the number or kind of
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the tenth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Current Market
Price, as defined in Section 11(d)(i), of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors of the Company.
(b) Immediately upon the action of the Board of Directors of the
Company 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
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<PAGE> 56
Price for each Right so held. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Within ten
days after such action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent of the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24, and other than in connection with the purchase of Common Stock
prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 7(e)) for Common
Stock or Common Stock Equivalents at an exchange ratio of one share of Common
Stock or Common Stock Equivalent per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
of this Agreement (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than an Exempt
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<PAGE> 57
Person), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of shares of Common Stock representing 50% or more of the
shares of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) 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 shares of Common Stock or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders of such Rights
at the last addresses of the holders as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock or Common Stock Equivalents for Rights will be effected and, in the event
of any partial exchange, the number and kind of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
being exchanged (other than Rights which have become void pursuant to the
provisions of Section 7(e)) held by each holder of such Rights.
(c) If there shall not be sufficient shares of Common Stock issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exchange of the Rights.
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<PAGE> 58
Section 25. Notice of Proposed Actions.
(a) If the Company, after the Stock Acquisition Date, shall
propose to (i) effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its Preferred Stock payable in
stock of any class or to make any other distribution to the holders of record of
its Preferred Stock (other than a quarterly cash dividend), (ii) offer to the
holders of record of its Preferred Stock options, warrants, or other rights to
subscribe for or to purchase shares of Preferred Stock (including any security
convertible into or exchangeable for Preferred Stock) or shares of stock of any
class or any other securities, options, warrants, convertible or exchangeable
securities or other rights, (iii) effect any reclassification of its Preferred
Stock or any recapitalization or reorganization of the Company, (iv) effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions not in the
ordinary course of the Company's business, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of record of Rights, in accordance with Section 26, notice of such
proposed action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i), or such dividend or distribution,
or the date on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Preferred Stock, 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)
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<PAGE> 59
above at least 10 days prior to the record date for determining holders of
record of the Preferred Stock for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of record of
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 25 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
(b) If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Agreement are proposed, then, in any such case, the Company
shall give to each holder of Rights, in accordance with Section 26, notice of
the proposal of such transaction at least 10 days prior to consummating such
transaction, which notice shall specify the proposed event and the consequences
of the event to holders of Rights under Section 11(a)(ii) or Section 13, as the
case may be, and, upon consummating such transaction, shall similarly give
notice thereof to each holder of Rights.
(c) If any Section 11(a)(ii) event shall occur, then all
references in this Section 25 to Preferred Stock shall be deemed thereafter to
refer to the Common Stock or other securities for which the Rights are then
exercisable.
Section 26. Notices. Except as provided in Section 21, notices or demands
authorized by this Agreement to be given or made by the Rights Agent or by the
holder of record of any Right Certificate or Right 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:
Resource Bancshares Mortgage Group, Inc.
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<PAGE> 60
7909 Parklane Road
Columbia, South Carolina 29223
Attention: Chairman of the Board
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of record of any
Right Certificate or Right 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:
Attention: Tenders, Exchange Administration
First Chicago Trust Company of New York
525 Washington Boulevard, Suite 4660
Jersey City, New Jersey 07310
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right 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 it appears
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Prior to the Stock Acquisition
Date, the Company may in its sole and absolute discretion 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 the Rights or the Common Stock.
From and after the Stock Acquisition Date, the Company may and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent
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with any other provisions herein, or (iii) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
provided, that no such supplement or amendment shall adversely affect the
interests of the holders of Rights (other than any interest of an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). 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.
Section 28. Determinations and Actions by the Board. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith shall (x) be final, conclusive and
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binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to the holders of
the Rights.
Section 29. Successors. All of 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 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) 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 holders of record of the Right Certificates
(and, prior to the Distribution Date, the Common Stock).
Section 31. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
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Section 34. 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, illegal, 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
Attest: RESOURCE BANCSHARES MORTGAGE
GROUP, INC.
By: /s/ John W. Currie By: /s/ Edward J. Sebastian
------------------------------- ------------------------------
Name: John W. Currie Name: Edward J. Sebastian
Title: Secretary Title: Chairman and CEO
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ Joanne Gorostiola By: /s/ Gerard O'Leary
------------------------------- ------------------------------
Name: Joanne Gorostiola Name: Gerard O'Leary
Title: Assistant Vice President Title: Vice President
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<PAGE> 65
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Resource Bancshares Mortgage Group, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware
(hereinafter called the "Corporation"), hereby certifies that the following
resolution was adopted by the Board of Directors of the Corporation as required
by Section 151 of the General Corporation Law at a meeting duly called and held
on February 6, 1998:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Corporation's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation") the Board of Directors hereby creates a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 500,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
<PAGE> 66
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock) ranking prior
and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of common stock, par value $0.01 per share
(the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends,
and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin
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<PAGE> 67
to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of Common stock and any other capital
stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
- 3 -
<PAGE> 68
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or winding
up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become
- 4 -
<PAGE> 69
authorized but unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock subject to the conditions and restrictions
on issuance set forth herein, in the Certificate of Incorporation, or in any
other Certificate of Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash 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 or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of
- 5 -
<PAGE> 70
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
- 6 -
<PAGE> 71
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chairman of the Board and attested by its Secretary
this _____ day of February, 1998.
-----------------------------------
Chairman of the Board
Attest:
- ------------------------------
Secretary
- 7 -
<PAGE> 72
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-__ _______ Rights
NOT EXERCISABLE AFTER FEBRUARY 16, 2008 OR UNDER CERTAIN
CIRCUMSTANCES EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. IF THE RIGHTS REPRESENTED
BY THIS CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING
PERSON OR A TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY SUCH
PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY WILL BECOME NULL AND VOID.
Right Certificate
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
This certifies that _________________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of February 6, 1998 (the "Rights Agreement")
between Resource Bancshares Mortgage Group, Inc., a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, a New York corporation
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M., Columbia, South Carolina time, on February 16, 2008, at the
principal office of the Rights Agent, or its successors as Rights Agent, one
one-hundredth of a fully paid and nonassessable share of Series A Junior
Participating Preferred Stock, $.01 par value per share ("Preferred Stock"), of
the
<PAGE> 73
Company at a purchase price of $83.00 as the same may from time to time be
adjusted in accordance with the Rights Agreement ("Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares of Preferred Stock which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of February 6, 1998 (the "Record Date")
based on the shares of Preferred Stock of the Company as constituted at such
date. As provided in the Rights Agreement, the Purchase Price and the number of
shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company
and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right
B-2
<PAGE> 74
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.01 per Right or (ii) may be exchanged in whole or in
part for shares of common stock, $.01 par value per share of the Company
("Common Stock") or common stock equivalents.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than, except as set
forth above, fractions that are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof, cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders
B-3
<PAGE> 75
(except as provided in the Rights Agreement) or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
B-4
<PAGE> 76
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ______________ ____.
ATTEST: RESOURCE BANCSHARES
MORTGAGE GROUP, INC.
By:
- ---------------------------- ---------------------------
Secretary Name:
Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By
-------------------------
Authorized signature
B-5
<PAGE> 77
[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)
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ___________ , ____
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
-----------------------------------
<PAGE> 78
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are 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 pursuant to the Rights Agreement);
and (2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ____________, ____
----------------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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<PAGE> 79
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
Exercise the Right Certificate.)
To: Resource Bancshares Mortgage Group, Inc.
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
Please insert social security
or other identifying number
- --------------------------------------------
(Please print name and address)
- --------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- --------------------------------------------
(Please print name and address)
- --------------------------------------------
Dated: ______________, ____
----------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
<PAGE> 80
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
-----------------------------------
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) 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 pursuant to the Rights Agreement);
and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or any
transferee of such Persons.
Dated: ______________, _____
----------------------------------
Signature
- 2 -
<PAGE> 81
EXHIBIT C
RESOURCE BANCSHARES MORTGAGE GROUP, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On February 6, 1998, the Board of Directors (the "Board") of Resource
Bancshares Mortgage Group, Inc. (the "Company") adopted a Rights Agreement (the
"Rights Agreement") and authorized and declared a dividend of one Preferred
Stock Purchase Right (a "Right") for each outstanding share of common stock,
par value $.01 per share ("Common Stock") of the Company. The dividend is
payable on February 16, 1998 to the stockholders of record on that date (the
"Record Date"), and with respect to Common Stock issued thereafter until the
Distribution Date (as hereinafter defined) or the expiration or earlier
redemption or exchange of the Rights. Except as set forth below, each Right
entitles the registered holder to purchase from the Company at any time after
the Distribution Date one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share ("Preferred Stock") at
a price of $83.00 per one one-hundredth of a share, subject to adjustment (the
"Purchase Price"). The description and terms of the Rights are set forth in the
Rights Agreement.
Initially the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate Right Certificates
will be distributed. The Rights will become exercisable and separate from the
shares of Common Stock upon the earlier to occur of (i) 10 days after the date
(the "Stock Acquisition Date") of a public announcement that a person or group
of affiliated or associated persons has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person") ; or (ii) 10 business days
(or such later date as the Board may determine) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming the beneficial
owner of 15% or more of the outstanding shares of Common Stock (the earlier of
such dates being called the "Distribution Date"). Shares of Common Stock
beneficially owned by the Company or any subsidiary of the Company will not be
considered outstanding for purposes of calculating the percentage ownership of
any person.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with, and only with, the shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration), new Common
Stock certificates issued after the Record Date upon transfer or new issuance
of shares of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation, will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the shares of
<PAGE> 82
Common Stock as of the close of business on the Distribution Date, and such
separate Right Certificates alone will evidence the Rights. The Rights are not
exercisable until the Distribution Date. The Rights will expire at the close of
business on February 16, 2008, unless earlier redeemed by the Company as
described below.
Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock of the Company: (i)
the Company, any subsidiary of the Company, or any employee benefit plan of the
Company or of any subsidiary of the Company and (ii) any person who would
otherwise become an Acquiring Person solely by virtue of a reduction in the
number of outstanding shares of Common Stock unless and until such person shall
become the beneficial owner of any additional shares of Common Stock.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive, upon payment of the
Purchase Price, shares of Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the Purchase Price of the Right. Notwithstanding the foregoing, all rights that
are, or were, beneficially owned by an Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding shares of Common Stock immediately
prior to the consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of the Company's
assets, cash flow or earning power is sold or transferred, other than in the
ordinary course of the Company's business, then each holder of a Right (except
Rights which have previously been voided as set forth above) shall thereafter
have the right (the "Flip-Over Right") to receive, upon exercise and payment of
the Purchase Price, common shares of the acquiring company having a value equal
to two times the Purchase Price. If a transaction would otherwise result in a
holder's having a Flip-In as well as a Flip-Over Right, then only the Flip-Over
Right will be exercisable; if a transaction results in a holder's having a
Flip-Over Right subsequent to a transaction resulting in a holder's having a
Flip-In Right, a holder will have Flip-Over Rights only to the extent such
holder's Flip-In Rights have not been exercised.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above). However,
no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1%.
C-2
<PAGE> 83
The number of outstanding Rights and the number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 100 times the dividend declared per share of Common
Share. In the event of liquidation, the holders of the Preferred Stock will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 100 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of Common Stock. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
To the extent that, after the triggering of Flip-In Rights,
insufficient shares of Common Stock are available for the exercise in full of
the Rights, holders of Rights will receive upon exercise shares of Common Stock
to the extent available and then cash, property or other securities of the
Company, in proportions determined by the Company, so that the aggregate value
received is equal to twice the Purchase Price.
The Company is not required to issue fractional Preferred Shares
(other than factions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company be evidenced by
depository receipts), and in lieu thereof, a payment in cash will be made to
the holder of such Rights equal to the same fraction of the current value of
one one-hundredth of a share of Preferred Stock. Following the triggering of
the Flip-In Rights, the Company will not be required to issue fractional shares
of Common Stock upon exercise of the Rights and, in lieu thereof, a payment in
cash will be made to the holder of such Rights equal to the same fraction of
the current market value of a share of Common Stock.
In general, the Company may redeem the Rights at a price of $.01 per
Right (subject to adjustment), at any time before the close of business on the
Stock Acquisition Date.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the then
outstanding and exercisable Rights (other than Rights
C-3
<PAGE> 84
owned by an Acquiring Person, which will have become null and void), in whole
or in part, for shares of Common Stock, each Right being exchangeable for one
share of Common Stock, or common stock equivalents equal to one share of Common
Stock, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
stockholders under presently existing federal income tax law, and will not
change the way in which stockholders can presently trade the Company's shares
of Common Stock. If the Rights should become exercisable, stockholders,
depending on then existing circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally
may be amended by the Board of Directors of the Company. On or after the Stock
Acquisition Date, the Company may amend the Rights Agreement only to (i) cure
any ambiguity, (ii) correct or supplement any provision which may be defective
or inconsistent with the other provisions of the Rights Agreement, or (iii)
change or supplement the Rights Agreement in any other manner which the Company
may deem necessary or desirable, provided that no amendment shall adversely
affect the interests of the holders of Rights (other than any interest of an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being
acquired. Accordingly, the existence of the Rights may deter certain acquirors
from making takeover proposals or tender offers. However, the rights plan helps
ensure that the Company's stockholders receive fair and equal treatment in the
event of any proposed takeover of the Company. The adoption of the plan is not
in response to any specific takeover threat or proposal, but is a precaution
taken to protect the rights of the Company's stockholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission (Commission File No. 000-21786). A copy of the Rights Agreement is
available free of charge from the Company, 7909 Parklane Road, Columbia, South
Carolina 29223, Attention: Steven F. Herbert. 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 in this summary
description by reference.
C-4
