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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 (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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ROC COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 84-1226771
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
6430 SO. QUEBEC STREET 80111
ENGLEWOOD, COLORADO (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
(TITLE OF CLASS)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On September 17, 1996, the Board of Directors of ROC Communities, Inc. (the
"COMPANY") declared a dividend of one right to purchase preferred stock
("RIGHT") for each outstanding share of the Company's Common Stock, par value
$.01 per share ("COMPANY COMMON STOCK"), to stockholders of record at the close
of business on September 30, 1996 (the "RECORD DATE") and for each share of
Company Common Stock issued (including shares distributed from the Company's
treasury) by the Company thereafter and prior to the Distribution Date (as
defined below). Each Right entitles the registered holder, subject to the terms
of the Rights Agreement (as defined below), to purchase from the Company one
one-thousandth of a share (a "UNIT") of Series A Junior Participating Preferred
Stock, par value $.01 per share ("PREFERRED STOCK"), of the Company, at a
purchase price of $70.00 per Unit (the "PURCHASE PRICE"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the
"RIGHTS AGREEMENT") between the Company and KeyBank National Association, as
Rights Agent (the "RIGHTS AGENT").
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights certificates will be
distributed. The Rights will separate from the Company Common Stock and the
"DISTRIBUTION DATE" will occur upon the earliest to occur of (i) 10 business
days following a public announcement (the date of such announcement being the
"STOCK ACQUISITION DATE") that (a) a person or group of affiliated or associated
persons (an "ACQUIRING PERSON") has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 15% or more of the then outstanding
shares of Company Common Stock or (b) a majority of the independent directors of
the Company has, in accordance with the criteria set forth in the Rights
Agreement, declared a person who beneficially owns at least 10% of the then
outstanding shares of Company Common Stock to be an "ADVERSE PERSON," (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 15% or more of the then outstanding
shares of Company Common Stock (other than a tender or exchange offer for all
outstanding shares of Common Stock at a price and on terms that a majority of
the independent directors of the Company determines to be fair to and otherwise
in the best interests of the Company and its stockholders), and (iii) the date
on which it is publicly announced that a person or group has become the
beneficial owner of 40% or more of the then outstanding shares of Company Common
Stock. Until the Distribution Date, (i) the Rights will be evidenced by Company
Common Stock certificates and will be transferred with and only with such
Company Common Stock certificates, (ii) new Company Common Stock certificates
issued after the Record Date (including shares distributed from the Company's
treasury) will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates evidencing
outstanding Company Common Stock will also constitute the transfer of the Rights
associated with the Company Common Stock evidenced by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on September 30, 2006, unless the Rights are earlier
redeemed or exchanged by the Company.
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As soon as practicable after the Distribution Date, separate Certificates
evidencing the Rights ("RIGHTS CERTIFICATES") will be mailed to holders of
record of Company Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone will represent the
Rights.
In the event (a "FLIP-IN EVENT") that (i) a person becomes an Acquiring
Person (other than pursuant to a Flip-Over Event (as defined below)), (ii) a
majority of the independent directors of the Company declares a person to be an
Adverse Person, (iii) the Company is the surviving corporation in a merger with
an Acquiring Person and shares of Company Common Stock shall remain outstanding,
(iv) an Acquiring Person or an Adverse Person engages in one or more
"self-dealing" transactions specified in the Rights Agreement, or (v) during
such time as there is an Acquiring Person or an Adverse Person, an event occurs
which results in such Acquiring Person's or Adverse Person's ownership interest
being increased by more than 1% (E.G., by means of a reverse stock split or
recapitalization), THEN, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units of Preferred Stock
(or, in certain circumstances, Company Common Stock, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. The exercise price is the Purchase Price multiplied by the number
of Units of Preferred Stock issuable upon exercise of a Right prior to the
Flip-In Event. Notwithstanding the foregoing, following the occurrence of
any Flip-In Event all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person or Adverse Person (or by certain related parties) will be null and void.
In the event (a "FLIP-OVER EVENT") that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation (other
than a merger described in the preceding paragraph), (ii) any person
consolidates or merges with the Company and all or part of the Company Common
Stock is converted or exchanged for securities, cash or property of any other
Person, or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, THEN, in each such case, each holder of a Right (except Rights
which previously have been voided as described above) shall thereafter have the
right to receive, upon exercise, common stock of the Acquiring Person or Adverse
Person having a value equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
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) if
holders of the Preferred Stock are granted 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 the
holders of the Preferred Stock of evidences of indebtedness, cash or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not
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required to issue fractional Units. In lieu thereof, an adjustment in cash
may be made based on the market price of the Preferred Stock prior to the
date of exercise.
At any time prior to the Distribution Date, a majority of the independent
directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "REDEMPTION PRICE"), subject to adjustment in
certain events, payable, at the election of such majority of the independent
directors, in cash, shares of Company Common Stock or such other form of
consideration as the independent directors may determine. Immediately upon
effectiveness of the action of a majority of the independent directors ordering
the redemption of the Rights, the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date, the Company may exchange the
Rights (other than Rights owned by an Acquiring Person or an Adverse Person, or
an affiliate or an associate of an Acquiring Person or an Adverse Person, which
will have become void), in whole or in part, for Units of Preferred Stock at an
exchange ratio determined as provided in the Rights Agreement.
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. Although the distribution of the Rights should
not be taxable to stockholders or to the Company, stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Units of Preferred Stock (or other consideration) or are
exchanged as provided in the preceding paragraph.
Any of the provisions of the Rights Agreement may be amended without the
approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person or Adverse
Person), or to shorten or lengthen any time period under the Rights Agreement;
PROVIDED, HOWEVER, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company. Each Unit of Preferred Stock will have
a minimum preferential quarterly dividend of $.01 per Unit or any higher per
share dividend declared on the Company Common Stock.
In the event of liquidation of the Company, the holder of a Unit of
Preferred Stock will receive a preferred liquidation payment equal to $1.00 per
Unit.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock.
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In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
The Rights may have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by a majority of the independent directors of the Company,
unless the offer is conditioned on a substantial number of Rights being
acquired. However, the Rights should not interfere with any merger or other
business combination approved by a majority of the independent directors because
the Rights may be redeemed by the Company at $.01 per Right at any time on or
prior to the tenth business day following the Stock Acquisition Date (subject to
extension by a majority of the independent directors); PROVIDED, HOWEVER, that
the rights will cease to be redeemable if any person or group acquires
beneficial ownership of 40% or more of the outstanding Company Common Stock.
Thus, the Rights are intended to encourage persons who may seek to acquire
control of the Company to initiate such an acquisition through negotiations with
the Board of Directors. However, the effect of the Rights may be to discourage a
third party from making a partial tender offer or otherwise attempting to obtain
a substantial equity position in the equity securities of, or seeking to obtain
control of, the Company. To the extent any potential acquirors are deterred by
the Rights, the Rights may have the effect of preserving incumbent management in
office.
The Rights Agreement between the Company and the Rights Agent specifying
the terms of the Rights, which includes as Exhibit A the Form of Rights
Certificate, is attached hereto as Exhibit 4.1 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 full text of the
Rights Agreement.
ITEM 2. EXHIBITS.
Exhibit 3.1 Articles Supplementary to the Articles of Incorporation of
ROC Communities, Inc. classifying and designating the Series
A Junior Participating Preferred Stock.
Exhibit 4.1 Rights Agreement, dated as of September 18, 1996, by and
between ROC Communities, Inc. and KeyBank National
Association, as Rights Agent (including the form of Rights
Certificate as Exhibit A).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement on form 8-A
to be signed on its behalf by the undersigned, thereto duly authorized.
September 20, 1996
ROC COMMUNITIES, INC.
By: /s/ GARY P. MCDANIEL
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Gary P. McDaniel
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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Exhibit 3.1 Articles Supplementary to the Articles of Incorporation of
ROC Communities, Inc. classifying and designating the Series
A Junior Participating Preferred Stock.
Exhibit 4.1 Rights Agreement, dated as of September 18, 1996, by and
between ROC Communities, Inc. and KeyBank National
Association, as Rights Agent (including the form of Rights
Certificate as Exhibit A).
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EXHIBIT 3.1
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ARTICLES SUPPLEMENTARY
CLASSIFYING AND DESIGNATING A SERIES OF PREFERRED STOCK
AS
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ROC COMMUNITIES, INC.
Pursuant to Section 2-201 of the General Corporation Law
of the State of Maryland
We, Gary P. McDaniel and Roberta M. Hayhurst, being the President and the
Secretary, respectively, of ROC COMMUNITIES, INC., a corporation organized and
existing under the General Corporation Law of the State of Maryland (the
"Corporation"), in accordance with the provisions of Section 1-301 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Amended and Restated Articles of Incorporation of the Corporation, on September
17, 1996 the Board of Directors adopted the following resolution creating a
series of 120,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Corporation in accordance with the
provisions of its Amended and Restated Articles of
Incorporation, a series of Preferred Stock, par value $.01
per share, of the Corporation be, and it hereby is, created,
with such voting powers, preferences and relative,
participating, optional or other special rights, and such
qualifications, limitations or restrictions thereof, as
follows:
Section 1. DESIGNATION AND AMOUNT. There shall be a series of Preferred
Stock of the Corporation which shall be designated as "Series A Junior
Participating Preferred Stock," par value $.01 per share (hereinafter called
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 120,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors and by the filing of articles of amendment
pursuant to the provisions of the General Corporation Law of the State of
Maryland stating that such increase or reduction has been so authorized;
PROVIDED, HOWEVER, that no decrease shall reduce the number of shares of Series
A Preferred Stock to a number less than that of the shares then outstanding plus
the number of shares of Series A Preferred Stock issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
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Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, each holder of one
one-thousandth (1/1,000) of a share (a "Unit") of Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash
to holders of record on the last business 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 Unit of Series A Preferred Stock, in an amount per
Unit (rounded to the nearest cent) equal to the greater of (a) $.01 or (b)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the common stock, par
value $.01 per share, of the Company (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 a Unit of Series A
Preferred Stock, and (ii) subject to the provision for adjustment hereinafter
set forth, quarterly distributions (payable in kind) on each Quarterly Dividend
Payment Date in an amount per Unit equal to the aggregate per share amount 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 shares of 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 a Unit
of Series A Preferred Stock. In the event the Corporation shall at any time
following September 17, 1996 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
Units of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying each
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or
distribution on Units of the Series A Preferred Stock as provided in paragraph
(A) above at the time it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED, HOWEVER,
that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per Unit
on the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) No dividend or distribution (other than a dividend
payable in shares of Common Stock) shall be paid or payable to the holders of
shares of Common Stock unless, prior thereto, all accrued but unpaid dividends
to the date of such dividend or distribution shall have been paid to the holders
of Units of Series A Preferred Stock.
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(D) Dividends shall begin to accrue and be cumulative on
each outstanding Unit of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such Unit of Series A Preferred
Stock, unless the date of issue of such Unit is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such Unit
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of Units 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 Units of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such Units shall be allocated PRO RATA on a Unit-by-Unit basis among
all such Units of Series A Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of Units of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of Units of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time following the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the number of votes per share to which holders of Units 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 or by law, the
holders of Units of Series A Preferred Stock and the holders of shares 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) (i) Whenever, at any time or times, dividends payable
on any Unit or Units of Series A Preferred Stock shall be in arrears in an
amount equal to at least two full quarterly dividends (whether or not declared
and whether or not consecutive), the holders of record of the outstanding Units
of Series A Preferred Stock shall have the exclusive right, voting separately as
a single class, to elect two directors of the Corporation at a special meeting
of stockholders of the Corporation or at the Corporation's next annual meeting
of stockholders, and at each subsequent annual meeting of stockholders, as
provided below. At elections for such directors, the holders of Units of
Series A Preferred Stock shall be entitled to cast one vote for each Unit of
Series A Preferred Stock held.
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(ii) Upon the vesting of such right of the holders of
Units of Series A Preferred Stock, the maximum authorized number of members of
the Board of Directors shall automatically be increased by two and the two
vacancies so created shall be filled by vote of the holders of the outstanding
Preferred Stock as hereinafter set forth. A special meeting of the stockholders
of the Corporation then entitled to vote shall be called by the Chairman or the
President or the Secretary of the Corporation, if requested in writing by the
holders of record of not less than 10% of the Units of Series A Preferred Stock
then outstanding. At such special meeting, or, if no such special meeting shall
have been called, then at the next annual meeting of stockholders of the
Corporation, the holders of the Units of Series A Preferred Stock shall elect,
voting as above provided, two directors of the Corporation to fill the aforesaid
vacancies created by the automatic increase in the number of members of the
Board of Directors. At any and all such meetings for such election, the holders
of a majority of the outstanding Units of Series A Preferred Stock shall be
necessary to constitute a quorum for such election, whether present in person or
by proxy, and such two directors shall be elected by the vote of at least a
plurality of Units held by such stockholders present or represented at the
meeting. Any director elected by holders of Units of Series A Preferred Stock
pursuant to this Section may be removed at any annual or special meeting, by
vote of a majority of the stockholders voting as a class who elected such
director, with or without cause. In case any vacancy shall occur among the
directors elected by the holders of Units of Series A Preferred Stock pursuant
to this Section, such vacancy may be filled by the remaining director so
elected, or his successor then in office, and the director so elected to fill
such vacancy shall serve until the next meeting of stockholders for the election
of directors. After the holders of Units of Series A Preferred Stock shall have
exercised their right to elect directors in any default period and during the
continuance of such period, the number of directors shall not be further
increased or decreased except by vote of the holders of Units of Series A
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Preferred Stock.
(iii) The right of the holders of Units of Series A
Preferred Stock, voting separately as a class, to elect two members of the Board
of Directors of the Corporation as aforesaid shall continue until, and only
until, such time as all arrears in dividends (whether or not declared) on the
Units of Series A Preferred Stock shall have been paid or declared and set apart
for payment, at which time such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the event of each and every
subsequent default of the character above-mentioned. Upon any termination of
the right of the holders of the Units of Series A Preferred Stock as a class to
vote for directors as herein provided, the term of office of all directors then
in office elected by the holders of Units of Series A Preferred Stock pursuant
to this Section shall terminate immediately. Whenever the term of office of the
directors elected by the holders of Units of Series A Preferred Stock pursuant
to this Section shall terminate and the special voting powers vested in the
holders of the Preferred Stock pursuant to this Section shall have expired, the
maximum number of members of the Board of Directors of the Corporation shall be
such number as may be provided for in the By-laws of the Corporation,
irrespective of any increase made pursuant to the provisions of this Section.
(D) Except as set forth herein, holders of Units 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.
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Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Units of Series A Preferred Stock as provided in
herein are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding Units of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Units of 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 Units and all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock;
PROVIDED, HOWEVER, that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
Units of 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 Units, 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 Units or
shares of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section, purchase or otherwise acquire such Units or shares at such
time and in such manner.
Section 5. REACQUIRED SHARES. Any Units of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such Units shall, upon their cancellation, become authorized but
unissued Units of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
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Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any voluntary liquidation, dissolution or winding up of
the Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of Units of Series A Preferred Stock shall have received $1.00 per Unit, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of Units of Series A Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding Units of Series A Preferred Stock and shares of Common Stock,
respectively, holders of Units of Series A Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio, on a per Unit or share basis,
as the case may be, of the Adjustment Number to 1 with respect to such Units of
Series A Preferred Stock and shares of Common Stock, on a per Unit and a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time following the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 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 converted into other stock
or securities, cash and/or any other property, then in any such case the Units
of Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the event
the Corporation shall at any time (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the
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<PAGE>
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or conversion of Units of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. REDEMPTION. The Units of a Series A Preferred Stock shall
not be redeemable by the Corporation; PROVIDED, HOWEVER, that the foregoing
shall not limit the ability of the Corporation to purchase or otherwise deal in
such Units to the extent otherwise permitted hereby and by law.
Section 9. RANKING. The Series A Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock (whether with or
without par value) as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.
Section 10. AMENDMENT. Neither these Articles Supplementary nor
the Articles of Incorporation of the Corporation may 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 a majority or more of the outstanding Units
of Series A Preferred Stock, voting separately as a class.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's Units or fractional shares,
to exercise voting rights, receive dividends, participate in distributions and
to have the benefit of all other rights of holders of Series A Preferred Stock."
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<PAGE>
IN WITNESS WHEREOF, these Articles Supplementary have been executed on
behalf of the Corporation by its President and attested by its Secretary this
18th day of September, 1996.
ROC COMMUNITIES, INC.
By: /s/ GARY P. MCDANIEL
-----------------------------------
Gary P. McDaniel
President
(SEAL)
ATTEST:
By: /s/ ROBERTA M. HAYHURST
------------------------
Roberta M. Hayhurst
Secretary
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<PAGE>
EXHIBIT 4.1
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
ROC COMMUNITIES, INC.
and
KEYBANK NATIONAL ASSOCIATION
Rights Agent
--------------------
RIGHTS AGREEMENT
Dated as of September 18, 1996
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . . . 5
SECTION 3. Issue of Rights Certificates . . . . . . . . . . . . . . . . . . 5
SECTION 4. Form of Rights Certificates. . . . . . . . . . . . . . . . . . . 7
SECTION 5. Countersignature and Registration. . . . . . . . . . . . . . . . 8
SECTION 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . 8
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. . 9
SECTION 8. Cancellation and Destruction of Rights Certificates. . . . . . . 11
SECTION 9. Reservation and Availability of Capital Stock. . . . . . . . . . 11
SECTION 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . 12
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. . . . . . . . . . . . . . . . . . . 12
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares. . . 22
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . 25
SECTION 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . 26
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder. . . . . . . 27
SECTION 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . 27
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent . . . 28
SECTION 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . 28
SECTION 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . 30
SECTION 22. Issuance of New Rights Certificates . . . . . . . . . . . . . . 31
SECTION 23. Redemption and Termination. . . . . . . . . . . . . . . . . . . 31
SECTION 24. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . 32
SECTION 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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SECTION 26. Supplements and Amendments. . . . . . . . . . . . . . . . . . . 33
SECTION 27. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 28. Determinations and Actions by the Board of Directors, Etc. . . 34
SECTION 29. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . 34
SECTION 30. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 33. Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 34. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
EXHIBIT A. Form of Rights Certificate . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B. Summary of Rights and Preferred Stock. . . . . . . . . . . . . B-1
EXHIBIT C. Form of Articles Supplementary for Preferred Stock . . . . . . C-1
ii
<PAGE>
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 18, 1996 (the "AGREEMENT"), between
ROC Communities, Inc., a Maryland corporation (the "COMPANY"), and KeyBank
National Association, a national banking association (the "RIGHTS AGENT").
WHEREAS, effective September 17, 1996 (the "RIGHTS DIVIDEND DECLARATION
DATE"), the Board of Directors of the Company authorized and declared a
distribution of one preferred stock purchase right ("RIGHT") for each share of
common stock, par value $.01 per share, of the Company (the "COMPANY COMMON
STOCK") outstanding at the Close of Business on September 30, 1996 (the "RECORD
DATE"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant hereto) for each share of Company Common Stock
issued between the Record Date (whether originally issued or delivered from the
Company's treasury) and, except as otherwise provided in Section 22, the
Distribution Date, each Right initially representing the right to purchase, upon
the terms and subject to the conditions hereinafter set forth, one Unit of
Preferred Stock (each as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect to such a
plan acting in such capacity) who or which, alone or together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the shares of Company Common Stock then outstanding, which shares
were acquired by such Person other than pursuant to a Permitted Offer; PROVIDED,
HOWEVER, that the term "Acquiring Person" shall not include any Person who is
the Beneficial Owner of 15% or more of the Company Common Stock then outstanding
by virtue of ownership of Company Common Stock by such Person's Affiliates
and/or Associates, which Affiliates and/or Associates are deemed to be
Affiliates and/or Associates solely by reason of each of them being directors or
officers of the Company or members of a slate of directors, proposed by
management, standing for election to such Board. Notwithstanding the foregoing,
(i) no Person shall become an "Acquiring Person" as a result of an acquisition
of Company Common Stock which, by reducing the number of shares of the Company
Common Stock outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% or more of the Company Common Stock
then outstanding; PROVIDED, HOWEVER, that if a Person shall become the
Beneficial Owner of 15% or more of the Company Common Stock by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Company Common Stock other than as
a direct or indirect result of any corporate action taken by the Company, then
such Person shall be deemed to be an "Acquiring Person"; and (ii) if a majority
of the Independent Directors determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the first sentence
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of this definition, has become such inadvertently (including, without
limitation, because (a) such Person was unaware that it Beneficially Owned
15% or more of the Company Common Stock or (b) such Person was aware of the
extent of such Beneficial Ownership but such Person acquired Beneficial
Ownership of such shares of Company Common Stock without the intention to
change or influence the control of the Company and without actual knowledge
of the consequences of such Beneficial Ownership under this Agreement), and
such Person divests itself as promptly as practicable of a sufficient number
of shares of Company Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the first sentence of this
definition, then such Person shall not be deemed to be, or have been, an
"Acquiring Person" for any purposes of this Agreement, and no Stock
Acquisition Date shall be deemed to have occurred. All questions as to
whether a Person who would otherwise be an Acquiring Person has become such
inadvertently shall be determined in good faith by a majority of the
Independent Directors, which determination shall be conclusive for all
purposes.
"ADVERSE PERSON" shall mean any Person declared to be an Adverse Person by
a majority of the Independent Directors upon determination that the criteria set
forth in Section 11(a)(ii)(B) apply to such Person.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as in effect
on the date hereof.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be deemed to
"beneficially own," any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of the
General Rules and Regulations under the Exchange Act (the "EXCHANGE ACT
REGULATIONS") as in effect on the date hereof; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," any securities under this subparagraph (i) as a result of an
agreement, arrangement or understanding to vote such securities if such
agreement, arrangement or understanding (A) arises solely from a revocable
proxy given in response to a proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the Exchange Act
and the Exchange Act Regulations, and (B) is not reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or successor
report);
(ii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such 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 acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (i) of this
paragraph (c)) or disposing of such securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time or upon
the satisfaction of conditions) pursuant to any
2
<PAGE>
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise; PROVIDED, HOWEVER, that under this definition a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," (A) securities tendered pursuant to a tender or exchange offer made
in accordance with Exchange Act Regulations by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities that may be issued upon
exercise of Rights at any time prior to the occurrence of a Triggering
Event, or (C) securities that may be issued upon exercise of Rights from
and after the occurrence of a Triggering Event, which Rights were acquired
by such Person or any of such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(c) or Section 22 hereof (the
"ORIGINAL RIGHTS") or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights.
Notwithstanding the foregoing, nothing contained in this definition
shall cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired in a BONA FIDE firm commitment underwriting pursuant to
an underwriting agreement with the Company.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in New York City are authorized or obligated by law
or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., New York City
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 p.m., New York City time, on the next succeeding Business
Day.
"COMMON STOCK" of any Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or, if such Person shall
have no capital stock, the equity securities or other equity interest having
power to control or direct the management of such Person.
"COMPANY COMMON STOCK" has the meaning set forth in the Whereas Clause.
"DISTRIBUTION DATE" has the meaning set forth in Section 3(a).
"EXPIRATION DATE" shall mean the earliest of (i) the Final Expiration Date,
(ii) the time at which the Rights are redeemed (or deemed redeemed) as provided
in Section 23 hereof and (iii) the time at which all Rights then outstanding and
exercisable are exchanged (or deemed exchanged) pursuant to Section 34 hereof.
"FINAL EXPIRATION DATE" shall mean the Close of Business on September 30,
2006.
"40% PERSON" shall mean any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to such a plan acting
in such capacity) who or which, alone
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<PAGE>
or together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 40% or more of the shares of Company Common Stock then
outstanding, which shares were acquired by such Person other than pursuant to
a Permitted Offer; PROVIDED, HOWEVER, that the term "40% Person" shall not
include any Person who is the Beneficial Owner of 40% or more of the Company
Common Stock then outstanding by virtue of ownership of Company Common Stock
by such Person's Affiliates and/or Associates, which Affiliates and/or
Associates are deemed to be Affiliates and/or Associates solely by reason of
each of them being directors or officers of the Company or members of a slate
of directors, proposed by management, standing for election to such Board.
"INDEPENDENT DIRECTOR" shall mean a member of the Board of Directors of the
Company who is not, and has never been, an officer or employee of the Company,
who is not an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and who either (i) was a member of the Board of
Directors of the Company prior to the date hereof or (ii) subsequently became a
director of the Company and whose election or nomination for election is
approved or recommended by a vote of a majority of the Board of Directors of the
Company, which majority includes a majority of the Independent Directors then on
the Board of Directors or (iii) has been a member of the Board of Directors of
the Company for at least 24 months.
"PERMITTED OFFER" shall mean a tender or exchange offer by any Person for
all outstanding shares of Company Common Stock which a majority of the
Independent Directors determines, based upon the advice of a nationally
recognized investment banking firm and such other advice as the Independent
Directors deem appropriate, is fair from a financial point of view to the
stockholders of the Company (other than such Person) and otherwise in the best
interests of the Company and its stockholders (other than such Person). A
Permitted Offer will cease to be such if, prior to the acquisition of Beneficial
Ownership of any Company Common Stock pursuant thereto, a majority of the
Independent Directors so determines, and in such event the tender or exchange
offer shall be deemed for purposes of Section 3 commenced on the date of such
determination.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
"PREFERRED STOCK" shall mean the Series A Junior Participating Preferred
Stock, par value $.01 per share, of the Company having such voting powers,
designation, preferences and relative, participating, optional or other special
rights and qualifications, limitations and restrictions as are described in the
form of Articles Supplementary attached as EXHIBIT C hereto.
"PURCHASE PRICE" has the meaning set forth in Section 7(b).
"RECORD DATE" has the meaning set forth in the Whereas Clause.
"RIGHT" has the meaning set forth in the Whereas Clause.
"RIGHTS CERTIFICATE" has the meaning set forth in Section 3(a).
4
<PAGE>
"RIGHTS DIVIDEND DECLARATION DATE" has the meaning set forth in the Whereas
Clause.
"SECTION 11(a)(ii) EVENT" shall mean any event described in Section
11(a)(ii)(A), (B), (C) or (D) hereof.
"SECTION 13 EVENT" shall mean any event described in clause (x), (y) or (z)
of Section 13(a) hereof.
"STOCK ACQUISITION DATE" shall mean the first date of public announcement
(including, without limitation, the filing of any report pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or by the Company that an Adverse Person has
become such.
"SUBSIDIARY" shall mean, with reference to any Person, any other Person of
which an amount of voting securities or equity interests sufficient to elect at
least a majority of the directors or equivalent governing body of such other
Person is beneficially owned, directly or indirectly, by such first-mentioned
Person, or otherwise controlled by such first-mentioned Person.
"SUMMARY OF RIGHTS" has the meaning set forth in Section 3(b).
"TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or any Section
13 Event.
"UNIT" has the meaning set forth in Section 7(b).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
co-rights agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earliest of (i)
the Close of Business on the tenth Business Day after the Stock Acquisition
Date, (ii) the Close of Business on the tenth Business Day (or such later date
as may be determined by action of a majority of the Independent Directors prior
to such time) after the date that a tender or exchange offer (other than a
Permitted Offer) by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such a plan acting in
such capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 15% or more of
the shares of Company Common Stock then outstanding, and (iii) the first date of
public announcement (including, without limitation, the filing of any report
pursuant to Section 13(d) of the Exchange Act) by the Company or a 40% Person
that a 40% Person has become such (the earliest of (i), (ii) and (iii) above
being the "DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares
5
<PAGE>
of Company Common Stock shall be deemed also to be certificates for Rights)
and not by separate certificates, and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of Company
Common Stock (including a transfer to the Company). As soon as practicable
after the Distribution Date, the Rights Agent will send, by first-class,
insured, postage-prepaid mail, to each record holder of shares of Company
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form attached hereto as EXHIBIT A
hereto (the "RIGHTS CERTIFICATES"), evidencing one Right for each share of
Company Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Company
Common Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights and Preferred Stock, in a form which may be
appended to certificates that represent shares of Company Common Stock, in
substantially the form of EXHIBIT B attached hereto (the "SUMMARY OF RIGHTS"),
by first-class, postage-prepaid mail, to each record holder of shares of Company
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) Rights shall, without any further action, be issued in respect of all
shares of Company Common Stock which are issued (including any shares of Company
Common Stock held in treasury) after the Record Date but prior to the earlier of
the Distribution Date and the Expiration Date. Certificates, representing such
shares of Company Common Stock, issued after the Record Date shall bear the
following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between ROC Communities, Inc. (the "Company") and
KeyBank National Association (the "RIGHTS AGENT") dated as
of September 18, 1996, as it may be amended from time to
time (the "RIGHTS AGREEMENT"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt
of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person or
an Adverse Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person
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<PAGE>
or by any subsequent holder, may become null and void and
nontransferable."
With respect to certificates representing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have appended
to them the Summary of Rights), until the earlier of the Distribution Date and
the Expiration Date, the Rights associated with the shares of Company Common
Stock represented by such certificates shall be evidenced by such certificates
alone and registered holders of the shares of Company Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights Certificates (and
the form of election to purchase and the form of assignment to be printed on the
reverse side thereof) shall each be substantially in the form set forth in
EXHIBIT A attached hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or any
rule or regulation thereunder or with any rule or regulation of any stock
exchange or automated quotation system on which the Rights may from time to time
be listed or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated
as of the Record Date and on their face shall entitle the holders thereof to
purchase such number of Units of Preferred Stock as shall be set forth therein
at the price set forth therein, but the amount and type of securities, cash or
other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights,
shares of Company Common Stock or the Company or (B) a transfer which a majority
of the Independent Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) hereof shall, upon the written direction of a majority of the Independent
Directors, contain (to the extent feasible) the following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person or an
Adverse Person (as such terms are defined in the Rights
Agreement). Accordingly, this
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Rights Certificate and the Rights represented hereby may become
null and void and nontransferable in the circumstances specified
in Section 7(e) of such Agreement."
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, the
President or one of its Vice Presidents under its corporate seal reproduced
thereon attested by its Secretary, Treasurer or one of its Assistant
Secretaries. The signature of any of these officers on the Rights Certificates
may be manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature of such
Rights Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized signatory, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES. (a)
Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and executed the certificate set forth in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) of the
Rights represented by such Rights Certificate or Affiliates or Associates
thereof as the Company shall reasonably request; whereupon the Rights Agent
shall, subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment
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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
Rights Certificates.
(b) If a Rights Certificate shall be mutilated, lost, stolen or destroyed,
then upon request by the registered holder of the Rights represented thereby and
upon payment to the Company and the Rights Agent of all reasonable expenses
incident thereto, there shall be issued, in exchange for and upon cancellation
of the mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and representing the
equivalent number of Rights, but, in the case of loss, theft or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Prior to the Expiration Date, the registered holder of any Rights
Certificate may, subject to the provisions of Sections 7(e) and 9(c) hereof,
exercise the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price (as
hereinafter defined) for the number of Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share (each such
one one-thousandth of a share being a "UNIT") of Preferred Stock upon exercise
of Rights shall be $70.00, subject to adjustment from time to time as provided
in Sections 11 and 13(a) hereof (such purchase price, as so adjusted, being the
"PURCHASE PRICE"), and shall be payable in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation in good standing
organized under the laws of the United States or any State of the United States,
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 (such institution being the "DEPOSITARY AGENT"), certificates
representing the Preferred Stock that may be acquired upon exercise of the
Rights and shall cause such Depositary Agent to enter into an agreement pursuant
to which the Depositary Agent shall issue receipts representing Units of the
Preferred Stock so deposited. Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price for the Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) to
be purchased thereby as set forth below and an amount equal to any applicable
transfer tax or evidence satisfactory to the Company of payment of such tax, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from the Depositary Agent depositary receipts representing such
number of Units of Preferred Stock as are to be purchased and the Company will
direct the Depositary Agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such
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depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered holder of
such Rights Certificate. In the event that the Company is obligated to issue
Company Common Stock, other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such Company Common Stock, other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made
in cash or by certified or bank check or money order payable to the order of
the Company.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of any Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Adverse Person, or an
Associate or Affiliate of an Acquiring Person or an Adverse Person, (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such Associate
or Affiliate) which becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) which becomes a transferee prior
to or concurrently with the Acquiring Person or Adverse Person becoming such and
which receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person (or any such
Associate or Affiliate) to holders of equity interests in such Acquiring Person
or Adverse Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person or Adverse Person (or such Associate or Affiliate) has
any continuing agreement, arrangement or understanding regarding the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer which a
majority of the Independent Directors has determined to be part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights or any other Person as a result
of its failure to make any determination under this Section 7(e) or such Section
4(b) with respect to any Acquiring Person or Adverse Person or any Affiliate,
Associate or transferee of any Acquiring Person or Adverse Person.
(f) Notwithstanding anything in this Agreement or any Rights Certificate
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 by such registered holder unless such registered holder
shall have (i) completed and executed the certificate following 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
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identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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 Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company shall at all times prior to the Expiration Date cause to be reserved and
kept available, out of its authorized and unissued shares of Preferred Stock,
the number of shares of Preferred Stock that, as provided in this Agreement,
will be sufficient to permit the exercise in full of all outstanding Rights.
Upon the occurrence of any events resulting in an increase in the aggregate
number of shares of Preferred Stock (or other equity securities of the Company)
issuable upon exercise of all outstanding Rights above the number then reserved,
the Company shall make appropriate increases in the number of shares so
reserved.
(b) If the Units of Preferred Stock to be issued and delivered upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"REGISTRATION DATE"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"REGISTRATION STATEMENT"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement and (B) the Expiration Date, and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary to ensure that
all Units of Preferred Stock (and, following the occurrence of a Triggering
Event, any other securities
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that may be delivered upon exercise of Rights) shall be, at the time of
delivery of the certificates or depositary receipts for such securities, duly
and validly authorized and issued and fully paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax imposed
in connection with the issuance or delivery of the Rights Certificates or upon
the exercise of Rights; PROVIDED, HOWEVER, the Company shall not be required to
pay any such tax imposed in connection with the issuance or delivery of Units of
Preferred Stock, or any certificates or depositary receipts for such Units of
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or assets, as the case may be) to any person other than the
registered holder of the Rights Certificates evidencing the Rights surrendered
for exercise. The Company shall not be required to issue or deliver any
certificates or depositary receipts for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, any other securities, cash or assets, as
the case may be) to, or in a name other than that of, the registered holder upon
the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights 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 Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Units of
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Rights 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, following the occurrence
of a Triggering Event, other securities) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
securities on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are open; and FURTHER
PROVIDED that if delivery of Units of Preferred Stock is delayed pursuant to
Section 9(c) hereof, such Persons shall be deemed to have become the record
holders of such Units of Preferred Stock only when such Units first become
deliverable. Prior to the exercise of the Rights evidenced thereby, the holder
of a Rights Certificate shall not be entitled to any rights of a stockholder of
the Company with respect to securities for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares
(or fractional shares) of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine
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the outstanding Preferred Stock into a smaller number of shares, 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 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 Units of Preferred Stock or
capital stock, as the case may be, issuable on such date upon exercise of
the Rights, 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
Units of Preferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date, such holder
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Person shall become an Acquiring Person, other than
pursuant to any transaction which constitutes a Section 13 Event; or
(B) a majority of the Independent Directors shall declare by
resolution any Person to be an Adverse Person, upon a determination
that such Person, alone or together with its Affiliates and
Associates, has, at any time after this Agreement has been filed with
the Securities and Exchange Commission as an exhibit to a filing under
the Exchange Act, become the Beneficial Owner of a number of shares of
Company Common Stock which the Independent Directors determine to be
substantial (which number of shares shall in no event represent less
than 10% of the outstanding shares of Company Common Stock) and a
determination by the Independent Directors, after reasonable inquiry
and investigation, including consultation with such persons as such
directors shall deem appropriate and consideration of such factors
selected by such directors as are permitted by applicable law, that
(a) such Beneficial Ownership by such Person is intended to cause the
Company to repurchase the shares of Common Stock beneficially owned by
such Person or to cause pressure on the Company to take action or
enter into a transaction or series of transactions intended to provide
such Person with short-term financial gain under circumstances where
the Independent Directors determine that the best long-term interests
of the Company would not be served by taking such action or entering
into such transaction or series of transactions at that time, or (b)
such Beneficial Ownership is causing or reasonably likely to cause a
material adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's ability to
maintain its competitive position) on the business or prospects of the
Company, on the Company's employees, customers or suppliers or on the
communities in which the Company operates or is located; or
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(C) any Acquiring Person (for purposes of this Section
11(a)(ii)(C) and of Section 11(a)(ii)(D), the term "Acquiring Person"
shall be deemed to include an Adverse Person) or any Associate or
Affiliate of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the Company or
otherwise combine with the Company and the Company shall be the
continuing or surviving corporation of such merger or combination and
Company Common Stock shall remain outstanding and unchanged, (2)
shall, in one transaction or a series of transactions, transfer any
assets to the Company or to any of its Subsidiaries in exchange (in
whole or in part) for shares of Company Common Stock, for other equity
securities of the Company or any such Subsidiary, or for securities
exercisable for or convertible into shares of equity securities of the
Company or any of its Subsidiaries (whether Company Common Stock or
otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of
such equity securities or securities exercisable for or convertible
into such equity securities (other than pursuant to a PRO RATA
distribution to all holders of Company Common Stock), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of transactions,
to, from or with the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such a plan
acting in such capacity, assets (including securities) on terms and
conditions less favorable to the Company or such Subsidiary or plan
than those that could have been obtained in arm's-length negotiations
with an unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a) hereof, (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of the Company's Subsidiaries or any employee
benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such a plan acting in such
capacity (other than transactions, if any, consistent with those
engaged in, as of the date hereof, by the Company and such Acquiring
Person or such Associate or Affiliate), assets (including securities)
having an aggregate fair market value of more than $5,000,000, other
than pursuant to a transaction set forth in Section 13(a) hereof, (5)
shall sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries
or any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such a plan
acting in such capacity, any material trademark or material service
mark, other than pursuant to a transaction set forth in Section 13(a)
hereof, (6) shall receive, or any designee, agent or representative of
such Acquiring Person or any Affiliate or Associate of such Acquiring
Person shall receive, any compensation from the Company or any of its
Subsidiaries other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (7) shall receive the benefit,
directly or indirectly (except proportionately as a holder of Company
Common Stock or as required by law or governmental regulation), of any
loans, advances, guarantees, pledges or other financial assistance or
any tax
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credits or other tax advantage provided by the Company or any
of its Subsidiaries or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such a plan acting in such capacity; or
(D) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of
its Subsidiaries, other than a transaction or transactions to which
the provisions of Section 13(a) apply (whether or not with or into or
otherwise involving an Acquiring Person), which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries that is directly
or indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
THEN, immediately upon the date of the occurrence of an event
described in Section 11(a)(ii)(A)-(D) hereof (a "SECTION 11(a)(ii)
EVENT"), proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu
of the number of Units of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, such number of Units of Preferred Stock as shall
equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of Units of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event (such product thereafter being, for all purposes of
this Agreement other than Section 13 hereof, the "PURCHASE PRICE"),
and (y) dividing that product by 50% of the then current market price
(determined pursuant to Section 11(d) hereof) per Unit of Preferred
Stock on the date of such first occurrence (such number of Units of
Preferred Stock being 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 Section
11(a)(ii) Event occurring after the initial occurrence of a Section
11(a)(ii) Event.
(iii) In lieu of issuing Units of Preferred Stock in accordance
with Section 11(a)(ii) hereof, the Company, acting by resolution of a
majority of the Independent Directors, may (and in the event that the
number of shares of Preferred Stock which are authorized by the Company's
Articles 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),
the Company, acting by resolution of a majority of the Independent
Directors, shall): (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "CURRENT
VALUE") over (2) the Purchase Price (such excess being the "SPREAD"), and
(B) with respect to each Right (subject to Section 7(e)), make
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adequate provision to substitute for such Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Company Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred
stock (such other shares being "PREFERRED STOCK EQUIVALENTS")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by a majority of the Independent
Directors after receiving advice from a nationally recognized investment
banking firm selected by a majority of the Independent Directors which has
not performed any services for the Company or any Subsidiary of the Company
in the prior five years; PROVIDED, HOWEVER, that if pursuant to the
introductory clause of this Section 11(a)(iii) the Company shall have
elected or been required to deliver value pursuant to clause (B) above and
shall not have made adequate provision to deliver such value within thirty
days following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred to herein
as the "SECTION 11(a)(iii) 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, Units of Preferred Stock
(to the extent available) and then, if necessary, cash, which Units of
Preferred Stock and/or cash shall have an aggregate value equal to the
Spread. To the extent that the Company determines that some action need be
taken pursuant to the first sentence of this Section 11(a)(iii), the
Company shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights. For purposes of this
Section 11(a)(iii), the value of a Unit of Preferred Stock shall be the
current market price (as determined pursuant to Section 11(d) hereof) per
Unit of Preferred Stock on the Section 11(a)(iii) Trigger Date and the
value of any preferred stock equivalent shall be deemed to have the same
value as the Preferred Stock on such date.
(b) In the event the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
calendar days after such record date) shares (or fractional shares) of
Preferred Stock (or shares having substantially the same rights, privileges
and preferences as shares of Preferred Stock ("EQUIVALENT PREFERRED
STOCK")) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
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 (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, then 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 sum of 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 so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current
market price, and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock
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and/or Equivalent Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In the event 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 a majority of the Independent Directors, 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 or any
Subsidiary shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In the event the Company shall fix a record date for a
distribution to all holders of shares 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 paid out
of funds legally available therefor), assets (other than a dividend payable
in shares of 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) hereof), then 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 (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date less the fair market value (as determined in good faith
by a majority of the Independent Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holder of the Rights) of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants distributable in respect of a share of Preferred Stock,
and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock.
Such adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall 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, the
"current market price" per share of Company Common Stock or Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such shares for the ten consecutive
Trading Days (as such term is hereinafter defined) immediately prior
to such date; PROVIDED, HOWEVER, if prior to the expiration of such
requisite ten Trading Day period the issuer announces either (A) a
dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights), or
(B) any subdivision, combination or reclassification of such shares,
then, following the ex-dividend date for such dividend or the record
date for such subdivision, as the case may be, the "current market
price" shall be properly adjusted to take into account such event.
The closing price for each day shall be, if the shares are listed and
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admitted to trading on a national securities exchange, as reported in
the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on
which such shares are listed or admitted to trading or, if such shares
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the Nasdaq Stock Market ("Nasdaq") or such other system
then in use, or, if on any such date such shares are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such
shares selected by a majority of the Independent Directors. If on any
such date no market maker is making a market in such shares, the fair
value of such shares on such date as determined in good faith by a
majority of the Independent Directors shall be used. If such shares
are 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 a majority of the Independent Directors, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term "TRADING
DAY" shall mean, if such shares are listed or admitted to trading on
any national securities exchange, a day on which the principal
national securities exchange on which such shares are listed or
admitted to trading is open for the transaction of business or, if
such shares are not so listed or admitted, a Business Day.
(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 above for Company Common Stock in clause (i)
of this Section 11(d) (other than the fourth sentence thereof). If
the current market price per 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 clause
(i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such amount may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of Company Common
Stock. If neither Company Common Stock nor 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 a majority of the Independent Directors
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.
(iii) For all purposes of this Agreement, the "current market
price" of a Unit of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided by 1,000.
(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 1% in the Purchase Price; PROVIDED,
HOWEVER, that any adjustments
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which by reason of this Section 11(e) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent
or to the nearest one-thousandth of a share of Company Common Stock or
Common Stock or other share or ten-thousandth 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 and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, 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 Preferred
Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i), (j),
(k), (l) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
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 Units of Preferred
Stock (or other securities or amount of cash or combination thereof) that
may be acquired from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of Units of Preferred Stock (calculated to the nearest one ten-thousandth
of a Unit) obtained by (i) multiplying (x) the number of Units of Preferred
Stock covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of Units of Preferred Stock that may be acquired
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
Units of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) 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
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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 Rights Certificates have been
issued, shall be at least ten days later than the date of such public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Rights Certificates to be so 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 Rights 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 Units of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per Unit and the number of Units of
Preferred Stock which were expressed in the Initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the number of Units of
Preferred Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such
fully paid and non-assessable number of Units 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 that number of Units of Preferred Stock and shares of other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Units of Preferred Stock and shares
of 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 their good faith judgment a majority of the
Independent Directors shall determine to be advisable
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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 holders or shall reduce the taxes
payable by such holders.
(n) The Company shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), 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 Person which constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have distributed or
otherwise transferred to its shareholders or other persons holding an
equity interest in such Person Rights previously owned by such Person or
any of its Affiliates and Associates; PROVIDED, HOWEVER, this Section 11(n)
shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Company Common Stock payable in shares of
Company Common Stock, (ii) subdivide the outstanding shares of Company
Common Stock, (iii) combine the outstanding shares of Company Common Stock
into a smaller number of shares, or (iv) issue any shares of its capital
stock in a reclassification of Company Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights
associated with each share of Company Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights
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thereafter associated with each share of Company Common Stock following
any such event shall equal the result obtained by multiplying the number
of Rights associated with each share of Company Common Stock immediately
prior to such event by a fraction the numerator of which shall be the
total number of shares of Company Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be
the total number of shares of Company Common Stock outstanding immediately
following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such certificate, and
mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that, following the Stock Acquisition Date, directly
or indirectly, either (x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or merge with or 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 Company Common Stock shall be
converted into or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer) to any
Person or Persons (other than the Company or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
(any such event being a "SECTION 13 EVENT"), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, such number of validly
authorized and issued, fully paid and non-assessable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), which shares shall
not be subject to any liens, encumbrances, rights of first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of Units of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such Units for which a Right would be exercisable hereunder but for the
occurrence of such Section 11(a)(ii) Event by the Purchase Price which would be
in effect hereunder but for such first occurrence) and (2) dividing that product
(which, following the first
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occurrence of a Section 13 Event, shall be the "PURCHASE PRICE" for all
purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such 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" shall thereafter
be deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (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
connection with the consummation of any such transaction as may be necessary
to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no further effect following the first occurrence of any Section
13 Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), (A) the Person that is the issuer of
any securities into which shares of Company Common Stock are converted in
such merger or consolidation, or, if there is more than one such issuer,
the issuer of Common Stock that has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof) and (B) if no
securities are so issued, the Person that is the other party to such merger
or consolidation, or, if there is more than one such Person, the Person the
Common Stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
largest 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 transferred pursuant to such transaction or transactions or
if the Person receiving the largest portion of the assets or earning power
cannot be determined, whichever Person the Common Stock of which has the
highest aggregate current market price (determined pursuant to Section
11(d) hereof);
PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act ("REGISTERED
COMMON STOCK"), or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person that has Registered Common Stock
outstanding, "Principal Party" shall refer to such other Person; (2) if the
Common Stock of such Person is not Registered Common Stock or such Person is not
a corporation, and such Person is a direct or indirect Subsidiary of another
Person but is not a direct or indirect Subsidiary of another Person which has
Registered Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such first-mentioned Person; (3) if the Common Stock
of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and
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one or more of such other Persons has Registered Common Stock outstanding,
"Principal Party" shall refer to whichever of such other Persons is the
issuer of the Registered Common Stock having the highest aggregate current
market price (determined pursuant to Section 11(d) hereof); and (4) if the
Common Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is directly or indirectly controlled by
more than one Person, and none of such other Persons have Registered Common
Stock outstanding, "Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest shareholders equity or, if no
such ultimate parent entity is a corporation, shall refer to whichever
ultimate parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any Section 13 Event transfer 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 such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that the Principal Party, at its own expense, will:
(i) (A) file on an appropriate form, as soon as practicable following
the execution of such agreement, a registration statement under the
Securities Act with respect to the Common Stock that may be acquired upon
exercise of the Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the requirements of
the Securities Act) until the Expiration Date, and (C) as soon as
practicable following the execution of such agreement, take such action as
may be required to ensure that any acquisition of such Common Stock upon
the exercise of the Rights complies with any applicable state security or
"blue sky" laws; and
(ii) use its best efforts either (A) to list (or continue the listing
of) the Common Stock of the Principal Party on a national securities
exchange or (B) to cause such Common Stock to be reported by NASDAQ or such
other transaction reporting system then in use; and
(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 under the
Exchange Act.
(d) 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 or By-laws or other instrument
governing its corporate 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) hereof) 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 shall not consummate any such
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<PAGE>
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 cancelled, 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.
(e) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
(f) Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 13 shall not be applicable to a transaction described
in clause (x) or (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons who acquired shares of Company Common Stock pursuant to
a Permitted Offer (or a wholly-owned Subsidiary of any such Person or Persons),
(ii) the price per share of Company Common Stock being offered in such
transaction is not less than the price per share of Company Common Stock paid to
all holders of Company Common Stock whose shares were purchased pursuant to such
Permitted Offer, and (iii) the form of consideration being offered to the
remaining holders of shares of Company Common Stock pursuant to such transaction
is the same as the form of consideration paid to holders of the Company Common
Stock pursuant to such Permitted Offer.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if
the Rights are listed or admitted to trading on a national securities exchange,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by a majority
of the Independent Directors. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by a majority of the Independent Directors shall be
used and such determination shall be described in a statement filed with the
Rights Agent and the holders of the Rights.
(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-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one
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<PAGE>
one-thousandth of a share of Preferred Stock). In lieu of such fractional
shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the then current market price
of a share of Preferred Stock on the day of exercise, determined in
accordance with Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, on 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 Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Company 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
Rights Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
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(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 any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, HOWEVER, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as promptly as practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of Units of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights 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, except as provided in Section 24 hereof, to
receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability hereunder.
(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 Rights Certificate or
certificate for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to have been signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if the
Rights Agent has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
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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 shareholder services businesses 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 document or any further act on the part
of any of the parties hereto; PROVIDED, HOWEVER, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights 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 Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") 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 specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; PROVIDED, HOWEVER, that so long as any Person is an
Acquiring Person hereunder, such certificate shall be signed and delivered by a
majority of the Independent Directors; 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.
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(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 Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), 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 have any responsibility for the validity of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or failure by the Company to
satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of the certificate
describing any such adjustment contemplated by Section 12); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or any other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any Units of Preferred Stock or any other securities will, when so
issued, be validly authorized and issued, fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer;
PROVIDED, HOWEVER, that so long as any Person is an Acquiring Person hereunder,
the Rights Agent shall accept such instructions and advice only from a majority
of the Independent Directors and shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with such instructions of
the majority of the Independent Directors. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the
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effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed 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. If such certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on the Rights
Agent additional ministerial responsibilities, but no discretionary
responsibilities), the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section
7(e) hereof and shall not be charged with any knowledge to the contrary.
(l) The Rights Agent shall have no duties or obligations other than those
specifically set forth in this Agreement, or as may subsequently be agreed to in
writing by the Company and the Rights Agent.
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 thirty days' prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the
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resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
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) a corporation
organized and doing business under the laws of the United States or any state
of the United States in good standing, shall be authorized to do business as
a banking institution in the State of New York, shall be authorized under
such laws to exercise corporate trust or stock transfer powers, shall be
subject to supervision or examination by federal or state authorities and
shall have at the time of its appointment as Rights Agent a combined capital
and surplus of at least $100,000,000 or (b) an Affiliate of a corporation
described in clause (a) of this sentence. 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 Preferred Stock and
the Company Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights 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.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a majority of the Independent Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired under the Rights Certificates. In addition, in
connection with the issuance or sale of shares of Company Common Stock following
the Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Independent Directors, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) Subject to Section 30
hereof, the Company may, at its option, by action of a majority of the
Independent Directors, at any time prior to the earlier of (i) the Distribution
Date or (ii) the Final Expiration Date, redeem all but not less than all of 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
the "REDEMPTION
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PRICE"). The Company may, at its option, by action of a majority of the
Independent Directors, pay the Redemption Price in cash, shares of Company
Common Stock (based on the "current market price," as defined in Section
11(d) hereof, of the shares of Company Common Stock at the time of
redemption), or such other form of consideration as such majority of the
Independent Director deems appropriate.
(b) Immediately upon the action of a majority of the Independent Directors
ordering the redemption of the Rights, evidence of which shall be filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of a majority of the Independent 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 for Company
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.
SECTION 24. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend paid out of funds legally available therefor), (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for or
to purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), (iv) to effect
any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares 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) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier; PROVIDED, HOWEVER, no such notice shall be
required pursuant to this Section 24, if any Subsidiary of the Company effects a
consolidation or merger
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with or into, or effects a sale or other transfer of assets or earnings power
to, any other Subsidiary of the Company.
(b) In case any Section 11(a)(ii) Event hereof shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof.
SECTION 25. NOTICES. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
ROC Communities, Inc.
c/o KeyCorp Shareholder Services, Inc.
6430 So. Quebec Street
Englewood, Colorado 80111
Attention: Gary P. McDaniel
Tel. No.: (303) 741-3707
Fax No.: (303) 741-3715
and if to the Rights Agent, at its address at:
KeyBank National Association
1515 Arapahoe Street
Suite 1505
Denver, Colorado 80202
Attention: Merryl Rapp
Tel. No.: (303) 629-7935
Fax No.: (303) 629-7916
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage-prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Company Common Stock. From and after the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
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necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Adverse
Person or an Affiliate or Associate of an Acquiring Person or an Adverse
Person); PROVIDED, HOWEVER, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) subject to
Section 30 hereof, a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company or, so
long as any Person is an Acquiring Person hereunder, from the majority of the
Independent Directors which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Purchase Price, the Expiration Date or the
number of Units of Preferred Stock for which a Right is exercisable, or which
has the effect of exempting from any provision of this Agreement, or of
rendering any otherwise applicable provision of this Agreement in applicable to,
any acquisition by any Person of Beneficial Ownership of Company Common Stock or
any transaction between any Person, on the one hand, and the Company or any
Subsidiary of or successor to the Company, on the other hand, without in each
such case the approval of a majority of the Independent Directors. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Common Stock.
SECTION 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
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) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, 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 (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of 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
or by a majority of the Independent Directors in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board or any member
thereof to any liability to the holders of the Rights.
SECTION 29. 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 Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of
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Company 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 registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered holders
of shares of Company Common Stock).
SECTION 30. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Independent Directors determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, then the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the Close of Business on the tenth Business Day following the
date of such determination by a majority of the Independent Directors.
SECTION 31. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Maryland applicable to contracts executed in and
to be performed entirely in such State.
SECTION 32. COUNTERPARTS. This Agreement may be executed (including by
facsimile) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. CAPTIONS. The captions contained in this Agreement are for
descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 34. EXCHANGE. (a) The Company may at any time prior to the
Distribution Date, upon resolution of a majority of the Independent Directors,
exchange all or part of the then outstanding Rights (which shall not include
Rights that have become void pursuant to Section 7(e) hereof) for Units of
Preferred Stock at an exchange ratio specified in the following sentence, as
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof. Subject to such adjustment, each
Right may be exchanged for that number of Units of Preferred Stock obtained by
dividing the Adjustment Spread (as defined below) by the then current market
price (determined pursuant to Section 11(d) hereof) per Unit of Preferred Stock
on the earlier of (i) the Stock Acquisition Date and (ii) the date on which a
tender or exchange offer (other than a Permitted Offer) by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such a plan acting in such capacity) is first published or sent
or given within the meaning of Rule 14d-4(a) of the Exchange Act Regulations or
any successor rule, if upon consummation thereof such Person would be the
Beneficial Owner of 15% or more of the shares of Company Common Stock then
outstanding (such exchange ratio being the "EXCHANGE RATIO"). The "ADJUSTMENT
SPREAD" shall equal (x) the
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aggregate market price on the date of such event of the number of Adjustment
Shares determined pursuant to Section 11(a)(ii), minus (y) the Purchase Price.
(b) Immediately upon the action of a majority of the Independent Directors
ordering the exchange of any Rights pursuant to Section 34(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 Units of Preferred Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange shall state the method by which the
exchange of Units of Preferred Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected PRO RATA based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Preferred 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 are
not sufficient to permit any exchange of Rights as contemplated in accordance
with this Section 34, the Company shall take all such action as may be necessary
to authorize additional shares of Preferred Stock for issuance upon exchange of
the Rights or make adequate provision to substitute (i) cash, (ii) Company
Common Stock or other equity securities of the Company, (iii) debt securities of
the Company, (iv) other assets, or (v) any combination of the foregoing, having
an aggregate value equal to the Adjustment Spread, where such aggregate value
has been determined by a majority of the Independent Directors.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or to distribute certificates which evidence fractional Units.
In lieu of fractional Units, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exchanged as herein provided an
amount in cash equal to the same fraction of the current market price
(determined pursuant to Section 11(d) hereof) of one Unit of Preferred Stock.
36
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
ROC COMMUNITIES, INC.
By: /s/ GARY P. MCDANIEL
-------------------------------------
Gary P. McDaniel
President and Chief Executive Officer
KEYBANK NATIONAL ASSOCIATION
By: /s/ MERRYL RAPP
-------------------------------------
Merryl Rapp
Vice President/Manager
37
<PAGE>
EXHIBIT A
TO RIGHTS AGREEMENT
[Form of Rights Certificate]
Certificate No. R- Rights
--------- ---------
NOT EXERCISABLE AFTER SEPTEMBER 30, 2006 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE REDEEMED OR EXCHANGED BY THE
COMPANY. 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. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
RIGHTS CERTIFICATE
ROC COMMUNITIES INC.
This certifies that ___________________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement, dated as of September 18, 1996 (the "RIGHTS AGREEMENT"),
between ROC Communities, Inc., a Maryland corporation (the "COMPANY"), and
KeyBank National Association, a national banking association, as Rights Agent
(the "RIGHTS AGENT"), to purchase from the Company at any time after the
Distribution Date and prior to the Expiration Date (each as defined in the
Rights Agreement), at the office of the Rights Agent, one one-thousandth of a
fully paid and non-assessable share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "PREFERRED STOCK"), of the Company
_____________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
A-1
<PAGE>
at a purchase price (the "PURCHASE PRICE") of $70.00 per one one-thousandth
of a share (each such one one-thousandth of a share being a "UNIT") of
Preferred Stock, upon presentation and surrender of this Rights Certificate
with the Election to Purchase and related certificate duly executed.
Capitalized terms used but not defined in this Rights Certificate that are
defined in the Rights Agreement shall have the meanings ascribed to them in
the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Adverse Person or an Affiliate or Associate of any such Acquiring Person or
Adverse Person, (ii) under certain circumstances specified in the Rights
Agreement, a transferee of any such Acquiring Person or Adverse Person, or
Associate or Affiliate of any such Acquiring Person or Adverse Person, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person or an Adverse
Person, or an Affiliate or Associate of an Acquiring Person or an Adverse
Person, such Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
THE NUMBER OF RIGHTS EVIDENCED BY THIS RIGHTS CERTIFICATE (AND THE NUMBER
OF UNITS WHICH MAY BE PURCHASED UPON EXERCISE THEREOF) SET FORTH ABOVE, AND THE
PURCHASE PRICE PER UNIT SET FORTH ABOVE, ARE SUBJECT TO MODIFICATION AND
ADJUSTMENT UPON THE OCCURRENCE OF CERTAIN EVENTS AS PROVIDED IN THE RIGHTS
AGREEMENT.
In certain circumstances, the Rights evidenced hereby may entitle the
registered holder thereof to purchase capital stock of an entity other than the
Company or receive common stock, cash or other assets, all as provided in the
Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, at any time prior to the
earlier of (i) the Stock Acquisition Date or (ii) the Final Expiration Date, the
Rights evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right, payable at the Company's option
in cash, common stock of the Company or other consideration, subject to
adjustment in certain events as provided in the Rights Agreement.
A-2
<PAGE>
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities 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 (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ,
------------------ -----
ATTEST: ROC COMMUNITIES, INC.
By:
- ------------------------------ -------------------------------
Name: Name:
Title: Title:
Countersigned:
KEYBANK NATIONAL ASSOCIATION,
as Rights Agent
By:
--------------------------
Authorized Signatory
A-3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(Please print name of transferee)
- --------------------------------------------------------------------------------
(Please print address of transferee)
this Rights evidenced by this Rights Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint _______
___________________, with full power of substitution, to transfer said Rights
on the books of the within-named Company.
Dated: ,
------------------ ------
Signature:
-----------------------------------------
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:
-----------------------------
A-4
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights 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 Adverse Person or an Affiliate or Associate of any
such Acquiring Person or Adverse Person (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Adverse Person or an Affiliate or Associate of an
Acquiring Person or an Adverse Person.
Dated: ,
-------------------- -----
Signature:
-----------------------------------------
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:
---------------------------------
NOTICE
The signature to the foregoing Assignment and related Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial institution
acceptable to the Rights Agent in its sole discretion or by a participant in the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Adverse Person or an Affiliate or
Associate thereof and, in the case of an Assignment, will affix a legend to that
effect on any Rights Certificates issued in exchange for this Rights
Certificate.
A-5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise the Rights evidenced by this Rights Certificate)
To: ROC COMMUNITIES, INC.
The undersigned hereby irrevocably elects to exercise ________________
Rights evidenced by this Rights Certificate to purchase the Units of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
Please insert social security
or other identifying number:
----------------------------
- --------------------------------------------------------------------------------
(Please print name)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print address)
If such number of Rights shall not be all of the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
------------------------------
- --------------------------------------------------------------------------------
(Please print name)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print address)
Dated: ,
-------------------- ------
Signature:
-----------------------------------------
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:
------------------------------
A-6
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not beneficially owned or being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Adverse Person or an Affiliate or Associate of any
such Acquiring Person or Adverse Person (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Adverse Person or an Affiliate or Associate of an
Acquiring Person or an Adverse Person.
Dated: ,
-------------------- ------
Signature:
-----------------------------------------
(Sign exactly as your name appears on the
other side of this Rights Certificate)
Signature Guarantee:
------------------------------
NOTICE
The signature to the foregoing Election to Purchase and related Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial institution
acceptable to the Rights Agent in its sole discretion or by a participant in the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Adverse Person or an Affiliate or
Associate thereof and, in the case of an exercise of less than all of the Rights
evidenced by this Rights Certificate, will affix a legend to that effect on any
Rights Certificates issued for the balance of such Rights in exchange for this
Rights Certificate.
A-7
<PAGE>
EXHIBIT B
TO RIGHTS AGREEMENT
SUMMARY OF
RIGHTS AND PREFERRED STOCK
On September 17, 1996, the Board of Directors of ROC Communities, Inc. (the
"COMPANY") declared a dividend of one right to purchase preferred stock
("RIGHT") for each outstanding share of the Company's Common Stock, par value
$.01 per share ("COMPANY COMMON STOCK"), to stockholders of record at the close
of business on September 30, 1996 (the "RECORD DATE") and for each share of
Company Common Stock issued (including shares distributed from the Company's
treasury) by the Company thereafter and prior to the Distribution Date (as
defined below). Each Right entitles the registered holder, subject to the terms
of the Rights Agreement (as defined below), to purchase from the Company one
one-thousandth of a share (a "UNIT") of Series A Junior Participating Preferred
Stock, par value $.01 per share ("PREFERRED STOCK"), of the Company, at a
purchase price of $70.00 per Unit (the "PURCHASE PRICE"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the
"RIGHTS AGREEMENT") between the Company and KeyBank National Association, as
Rights Agent (the "RIGHTS AGENT").
Copies of the Rights Agreement and the Articles Supplementary for the
Preferred Stock have been filed with the Securities and Exchange Commission as
exhibits to a Registration Statement on Form 8-A dated September 19, 1996 (the
"FORM 8-A") and are publicly available. Copies of the Rights Agreement and the
Articles Supplementary are also available free of charge from the Company. This
summary description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Rights Agreement and the Articles Supplementary, including the definitions
therein of certain terms, which Rights Agreement and Articles Supplementary are
incorporated herein by reference.
DESCRIPTION OF THE RIGHTS
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights certificates will be
distributed. The Rights will separate from the Company Common Stock and the
"DISTRIBUTION DATE" will occur upon the earlier of (i) 10 business days
following a public announcement (the date of such announcement being the "STOCK
ACQUISITION DATE") that (a) a person or group of affiliated or associated
persons (an "ACQUIRING PERSON") has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 15% or more of the then outstanding
shares of Company Common Stock or (b) a majority of the independent directors of
the Company has, in accordance with the criteria set forth in the Rights
Agreement, declared a person who beneficially owns at least 10% of the then
outstanding shares of Company Common Stock to be an "ADVERSE PERSON," (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person becomes an Acquiring Person)
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 15%
B-1
<PAGE>
or more of the then outstanding shares of Company Common Stock (other than a
tender or exchange offer for all outstanding shares of Common Stock at a
price and on terms that a majority of the independent directors of the
Company determines to be fair to and otherwise in the best interests of the
Company and its stockholders), and (iii) the date on which it is publicly
announced that a person or group has acquired beneficial ownership of 40% or
more of the then outstanding shares of Company Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by Company Common Stock
certificates and will be transferred with and only with such Company Common
Stock certificates, (ii) new Company Common Stock certificates issued after
the Record Date (including shares distributed from the Company's treasury)
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates evidencing outstanding
Company Common Stock will also constitute the transfer of the Rights
associated with the Company Common Stock evidenced by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on September 30, 2006, unless the Rights are earlier
redeemed or exchanged by the Company.
As soon as practicable after the Distribution Date, separate Certificates
evidencing the Rights ("RIGHTS CERTIFICATES") will be mailed to holders of
record of Company Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone will represent the
Rights.
In the event (a "FLIP-IN EVENT") that (i) a person becomes an Acquiring
Person (other than pursuant to a Flip-Over Event (as defined below)), (ii) a
majority of the independent directors of the Company declares a person to be an
Adverse Person, (iii) the Company is the surviving corporation in a merger with
an Acquiring Person and shares of Company Common Stock shall remain outstanding,
(iv) an Acquiring Person or an Adverse Person engages in one or more
"self-dealing" transactions specified in the Rights Agreement, or (v) during
such time as there is an Acquiring Person or an Adverse Person, an event occurs
which results in such Acquiring Person's or Adverse Person's ownership interest
being increased by more than 1% (E.G., by means of a reverse stock split or
recapitalization), THEN, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units of Preferred Stock
(or, in certain circumstances, Company Common Stock, cash, property or other
securities of the Company) having a value equal to two times the exercise price
of the Right. The exercise price is the Purchase Price multiplied by the number
of Units of Preferred Stock issuable upon exercise of a Right prior to the Flip-
In Event. Notwithstanding the foregoing, following the occurrence of any Flip-
In Event all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or Adverse
Person (or by certain related parties) will be null and void.
For example, at an exercise price of $70.00 per Right, each Right not owned
by an Acquiring Person or an Adverse Person (or by certain related parties)
following a Flip-In Event would entitle its holder to purchase $140.00 worth of
Preferred Stock (or other consideration, as noted above), based upon its then
current market price (determined based upon the market price of the Company
Common Stock), for $70.00. Assuming that the Preferred Stock had a
B-2
<PAGE>
current market price of $25.00 per Unit at such time, the holder of each
valid Right would be entitled to purchase 5.6 Units of Preferred Stock for
$70.00.
In the event (a "FLIP-OVER EVENT") that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation (other
than a merger described in the preceding paragraph), (ii) any person
consolidates or merges with the Company and all or part of the Company Common
Stock is converted or exchanged for securities, cash or property of any other
Person, or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, THEN, in each such case, each holder of a Right (except Rights
which previously have been voided as described above) shall thereafter have the
right to receive, upon exercise, common stock of the Acquiring Person or Adverse
Person having a value equal to two times the exercise price of the Right. Flip-
In Events and Flip-Over Events are collectively referred to herein as
("TRIGGERING EVENTS").
The Purchase Price payable, and the number of Units of Preferred Stock
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) if
holders of the Preferred Stock are granted 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 the
holders of the Preferred Stock of evidences of indebtedness, cash or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time prior to the Distribution Date, a majority of the independent
directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "REDEMPTION PRICE"), subject to adjustment in
certain events, payable, at the election of such majority of the independent
directors, in cash, shares of Company Common Stock or such other form of
consideration as the independent directors may determine. Immediately upon
effectiveness of the action of a majority of the independent directors ordering
the redemption of the Rights, the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
At any time prior to the Distribution Date, the Company may exchange the
Rights (other than Rights owned by an Acquiring Person or an Adverse Person, or
an affiliate or an associate of an Acquiring Person or an Adverse Person, which
will have become void), in whole or in part, for Units of Preferred Stock at an
exchange ratio determined as provided in the Rights Agreement.
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. Although the distribution of the Rights should
not be taxable to stockholders or to
B-3
<PAGE>
the Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Units of
Preferred Stock (or other consideration) or are exchanged as provided in the
preceding paragraph.
Any of the provisions of the Rights Agreement may be amended without the
approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person or Adverse
Person), or to shorten or lengthen any time period under the Rights Agreement;
PROVIDED, HOWEVER, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
DESCRIPTION OF PREFERRED STOCK
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company. Each Unit of Preferred Stock will have
a minimum preferential quarterly dividend of $.01 per Unit or any higher per
share dividend declared on the Company Common Stock.
In the event of liquidation of the Company, the holder of a Unit of
Preferred Stock will receive a preferred liquidation payment equal to $1.00 per
Unit.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
B-4
<PAGE>
EXHIBIT C
TO RIGHTS AGREEMENT
FORM OF
ARTICLES SUPPLEMENTARY
CLASSIFYING AND DESIGNATING A SERIES OF PREFERRED STOCK
AS
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ROC COMMUNITIES, INC.
Pursuant to Section 2-201 of the General Corporation Law
of the State of Maryland
We, Gary P. McDaniel and Roberta M. Hayhurst, being the President and the
Secretary, respectively, of ROC COMMUNITIES, INC., a corporation organized and
existing under the General Corporation Law of the State of Maryland (the
"Corporation"), in accordance with the provisions of Section 1-301 thereof, DO
HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Amended and Restated Articles of Incorporation of the Corporation, on September
17, 1996 the Board of Directors adopted the following resolution creating a
series of 120,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Corporation in accordance with the
provisions of its Amended and Restated Articles of
Incorporation, a series of Preferred Stock, par value $.01
per share, of the Corporation be, and it hereby is, created,
with such voting powers, preferences and relative,
participating, optional or other special rights, and such
qualifications, limitations or restrictions thereof, as
follows:
Section 1. DESIGNATION AND AMOUNT. There shall be a series of Preferred
Stock of the Corporation which shall be designated as "Series A Junior
Participating Preferred Stock," par value $.01 per share (hereinafter called
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 120,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors and by the filing of articles of amendment
pursuant to the provisions of the General Corporation Law of the State of
Maryland stating that such increase or reduction has been so authorized;
PROVIDED, HOWEVER, that no decrease shall reduce the number of shares of Series
A Preferred Stock to a number less than that of the shares then
C-1
<PAGE>
outstanding plus the number of shares of Series A Preferred Stock issuable
upon exercise of outstanding rights, options or warrants or upon conversion
of outstanding securities issued by the Corporation.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, each holder of one
one-thousandth (1/1,000) of a share (a "Unit") of Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash
to holders of record on the last business 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 Unit of Series A Preferred Stock, in an amount per
Unit (rounded to the nearest cent) equal to the greater of (a) $.01 or (b)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the common stock, par
value $.01 per share, of the Company (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 a Unit of Series A
Preferred Stock, and (ii) subject to the provision for adjustment hereinafter
set forth, quarterly distributions (payable in kind) on each Quarterly Dividend
Payment Date in an amount per Unit equal to the aggregate per share amount 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 shares of 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 a Unit
of Series A Preferred Stock. In the event the Corporation shall at any time
following September 17, 1996 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
Units of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying each
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or
distribution on Units of the Series A Preferred Stock as provided in paragraph
(A) above at the time it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED, HOWEVER,
that in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per Unit
on the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
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(C) No dividend or distribution (other than a dividend
payable in shares of Common Stock) shall be paid or payable to the holders of
shares of Common Stock unless, prior thereto, all accrued but unpaid dividends
to the date of such dividend or distribution shall have been paid to the holders
of Units of Series A Preferred Stock.
(D) Dividends shall begin to accrue and be cumulative on
each outstanding Unit of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such Unit of Series A Preferred
Stock, unless the date of issue of such Unit is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such Unit
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of Units 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 Units of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such Units shall be allocated PRO RATA on a Unit-by-Unit basis among
all such Units of Series A Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of Units of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of Units of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time following the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the number of votes per share to which holders of Units 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 or by law, the holders
of Units of Series A Preferred Stock and the holders of shares 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) (i) Whenever, at any time or times, dividends payable on
any Unit or Units of Series A Preferred Stock shall be in arrears in an amount
equal to at least two full quarterly dividends (whether or not declared and
whether or not consecutive), the holders of record of the outstanding Units of
Series A Preferred Stock shall have the exclusive right, voting separately as a
single class, to elect two directors of the Corporation at a special meeting
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of stockholders of the Corporation or at the Corporation's next annual
meeting of stockholders, and at each subsequent annual meeting of
stockholders, as provided below. At elections for such directors, the
holders of Units of Series A Preferred Stock shall be entitled to cast one
vote for each Unit of Series A Preferred Stock held.
(ii) Upon the vesting of such right of the holders of
Units of Series A Preferred Stock, the maximum authorized number of members
of the Board of Directors shall automatically be increased by two and the two
vacancies so created shall be filled by vote of the holders of the
outstanding Preferred Stock as hereinafter set forth. A special meeting of
the stockholders of the Corporation then entitled to vote shall be called by
the Chairman or the President or the Secretary of the Corporation, if
requested in writing by the holders of record of not less than 10% of the
Units of Series A Preferred Stock then outstanding. At such special meeting,
or, if no such special meeting shall have been called, then at the next
annual meeting of stockholders of the Corporation, the holders of the Units
of Series A Preferred Stock shall elect, voting as above provided, two
directors of the Corporation to fill the aforesaid vacancies created by the
automatic increase in the number of members of the Board of Directors. At
any and all such meetings for such election, the holders of a majority of the
outstanding Units of Series A Preferred Stock shall be necessary to
constitute a quorum for such election, whether present in person or by proxy,
and such two directors shall be elected by the vote of at least a plurality
of Units held by such stockholders present or represented at the meeting.
Any director elected by holders of Units of Series A Preferred Stock pursuant
to this Section may be removed at any annual or special meeting, by vote of a
majority of the stockholders voting as a class who elected such director,
with or without cause. In case any vacancy shall occur among the directors
elected by the holders of Units of Series A Preferred Stock pursuant to this
Section, such vacancy may be filled by the remaining director so elected, or
his successor then in office, and the director so elected to fill such
vacancy shall serve until the next meeting of stockholders for the election
of directors. After the holders of Units of Series A Preferred Stock shall
have exercised their right to elect directors in any default period and
during the continuance of such period, the number of directors shall not be
further increased or decreased except by vote of the holders of Units of
Series A Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Preferred
Stock.
(iii) The right of the holders of Units of Series A
Preferred Stock, voting separately as a class, to elect two members of the
Board of Directors of the Corporation as aforesaid shall continue until, and
only until, such time as all arrears in dividends (whether or not declared)
on the Units of Series A Preferred Stock shall have been paid or declared and
set apart for payment, at which time such right shall terminate, except as
herein or by law expressly provided, subject to revesting in the event of
each and every subsequent default of the character above-mentioned. Upon any
termination of the right of the holders of the Units of Series A Preferred
Stock as a class to vote for directors as herein provided, the term of office
of all directors then in office elected by the holders of Units of Series A
Preferred Stock pursuant to this Section shall terminate immediately.
Whenever the term of office of the directors elected by the holders of Units
of Series A Preferred Stock pursuant to this Section shall terminate and the
special voting powers vested in the holders of the Preferred Stock pursuant
to this Section shall have expired, the maximum number of members of the
Board of Directors of the Corporation shall be such number as may be provided
for in the By-laws of the Corporation, irrespective of any increase made
pursuant to the provisions of this Section.
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(D) Except as set forth herein, holders of Units 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.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Units of Series A Preferred Stock as provided in
herein are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding Units of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Units of 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 Units and all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock; PROVIDED, HOWEVER, that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any
Units of 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 Units, 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 Units or
shares of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section, purchase or otherwise acquire such Units or shares at such
time and in such manner.
Section 5. REACQUIRED SHARES. Any Units of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such Units shall, upon their cancellation,
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become authorized but unissued Units of Preferred Stock and may be reissued
as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any voluntary liquidation, dissolution or winding up of
the Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of Units of Series A Preferred Stock shall have received $1.00 per Unit, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of Units of Series A Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding Units of Series A Preferred Stock and shares of Common Stock,
respectively, holders of Units of Series A Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio, on a per Unit or share basis,
as the case may be, of the Adjustment Number to 1 with respect to such Units of
Series A Preferred Stock and shares of Common Stock, on a per Unit and a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) In the event the Corporation shall at any time following the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 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 converted into other stock
or securities, cash and/or any other property, then in any such case the Units
of Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for
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adjustment hereinafter set forth) equal the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Corporation shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or conversion of Units
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. REDEMPTION. The Units of a Series A Preferred Stock shall
not be redeemable by the Corporation; PROVIDED, HOWEVER, that the foregoing
shall not limit the ability of the Corporation to purchase or otherwise deal in
such Units to the extent otherwise permitted hereby and by law.
Section 9. RANKING. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock (whether with or
without par value) as to the payment of dividends and the distribution of
assets, unless the terms of any such series shall provide otherwise.
Section 10. AMENDMENT. Neither these Articles Supplementary nor
the Articles of Incorporation of the Corporation may 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 a majority or more of the outstanding Units
of Series A Preferred Stock, voting separately as a class.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's Units or fractional shares,
to exercise voting rights, receive dividends, participate in distributions and
to have the benefit of all other rights of holders of Series A Preferred Stock."
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IN WITNESS WHEREOF, these Articles Supplementary have been executed on
behalf of the Corporation by its President and attested by its Secretary this
18th day of September, 1996.
ROC COMMUNITIES, INC.
By:
-------------------------------
Gary P. McDaniel
President
(SEAL)
ATTEST:
By:
-------------------------------
Roberta M. Hayhurst
Secretary
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