<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CENTURY CASINOS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1271317
(State of incorporation or organization) (IRS Employer Identification No.)
200-220 E. Bennett Ave., Cripple Creek, CO 80813
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [ ]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [X]
Securities Act registration statement file number to which this Form
relates:____________ (if applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
(Title of Class)
<PAGE> 2
Item 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On April 29, 1999, the Board of Directors of Century Casinos, Inc. (the
"Company") adopted a Stockholder Rights Plan (the "Rights Plan"). The purpose of
the Rights Plan is to deter certain coercive takeover tactics and enable the
Board of Directors to represent effectively the interests of stockholders in the
event of a takeover attempt. The Rights Plan does not deter negotiated mergers
or business combinations that the Board of Directors determines to be in the
best interests of the Company and its stockholders.
To implement the Rights Plan the Board of Directors declared a dividend
of one preferred share purchase right (a "Right") for each outstanding share of
common stock (the "Common Shares") of the Company. The dividend will be paid on
May 13, 1999 to the stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Preferred Stock of the Company, par value $.01 per share (the
"Preferred Shares"), at a price of $4.00 per one one-hundredth of a Preferred
Share, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent.
RIGHTS ATTACH TO COMMON SHARES INITIALLY
Initially and until a Distribution Date (as defined below) occurs, the
Rights are attached to all Common Shares and no separate Rights certificates
will be issued. During this initial period,
o the Rights are not exercisable;
o the Rights are transferred with the Common Shares and are not
transferable separately from the Common Shares;
o new Common Share certificates issued will contain a notation
incorporating the Rights Agreement by reference; and
o the transfer of any Common Shares will also constitute the
transfer of the Rights associated with those Common Shares.
DISTRIBUTION OF RIGHTS
Separate certificates evidencing the Rights will be mailed to holders
of record of the Common Shares on the "Distribution Date." The Distribution Date
is the earlier to occur of the following four events:
o the twentieth day after a public announcement that a person or
group of affiliated or associated persons has acquired 20% or
more of the outstanding Common Shares, thereby becoming an
"Acquiring Person" under the Rights Plan; or
o the twentieth day after a public announcement that a person or
group has acquired 15% or more of the outstanding Common Shares,
if the Board determines that such person or group ("Adverse
Person") intends to take actions which would be detrimental to
the long-term interests of the Company or its stockholders or
that
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<PAGE> 3
such ownership would be detrimental to the Company in other
respects, thereby becoming an Acquiring Person; or
o the twentieth day after the commencement of a tender offer or
exchange offer, or an announcement of a person's intent to
commence a tender or exchange offer, that would result in a
person or group beneficially owning 20% or more of the
outstanding Common Shares; or
o the twentieth day after the filing by any person of a
registration statement with respect to a contemplated exchange
offer to acquire beneficial ownership of 20% or more of the
outstanding Common Shares.
In the latter two instances of a Distribution Date, the Board of
Directors may extend the twenty day period, but not beyond the time that a
person or group becomes an Acquiring Person.
Acquisitions by the following persons will not result in the person
becoming an Acquiring Person: The Company, any subsidiary or employee benefit
plan of the Company.
After the Distribution Date, the Rights will be tradable separately
from the Common Shares. After the Distribution Date and after the Company's
right to redeem (as described below) has expired, the Rights will be exercisable
in two different ways depending on the circumstances as set forth below.
RIGHT TO PURCHASE COMPANY STOCK
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share that may be purchased upon exercise of each Right should approximate the
value of one Common Share. For convenience, the discussion relating to the Right
to Purchase Company Stock and the Right to Purchase Acquiring Person Stock, each
immediately below, is expressed in terms of the exercise of a Right to purchase
Common Shares.
If a person or group acquires 20% (or in the case of an Adverse Person,
15%) or more of the outstanding Common Shares (thereby becoming an Acquiring
Person), and the Company's redemption right has expired, each holder of a Right
(except those held by the Acquiring Person and its affiliates and associates)
will have the right to purchase, upon exercise, Common Shares having a value
equal to two times the exercise price of the Right. In other words, the Rights
holders other than the Acquiring Person may purchase Common Shares at a 50%
discount.
For example, at the exercise price of $4.00 per Right, each Right not
owned by an Acquiring Person would entitle its holder to purchase $8.00 worth of
Common Shares (or one one-hundredths of Preferred Shares, as noted above) for
$4.00. Assuming a value of $1.60 per Common Share at such time, the holder of
each valid Right would be entitled to purchase five Common Shares for $4.00.
RIGHT TO PURCHASE ACQUIRING PERSON STOCK
Alternatively, if, in a transaction not approved by the Board of
Directors, the Company is acquired in a merger or other business combination or
50% or more of its assets or earning power are sold after a person or group has
become an Acquiring Person, and the Company's redemption right has expired,
proper provision will be made so that each holder of a Right will thereafter
have the right to purchase, upon exercise, that number of shares of common stock
of the acquiring company as have a market value of two times the exercise price
of the Right. In other words, a
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<PAGE> 4
Rights holder may purchase the acquiring company's common stock at a 50%
discount.
EXCHANGE OF COMPANY STOCK FOR RIGHTS
At any time after any person or group becomes an Acquiring Person and
before the Acquiring Person acquires 50% or more of the outstanding Common
Shares, the Board of Directors may exchange the Rights (other than Rights owned
by the Acquiring Person which will have become void), in whole or in part, for
Common Shares for consideration per Right consisting of one-half of the
securities that otherwise would be issuable.
REDEMPTION
The Rights are redeemable by the Company, in whole but not in part, at
a price of $.001 per Right at any time up to and including the twentieth day
after the time that a person or a group has become an Acquiring Person.
Immediately upon redemption, the right to exercise will terminate and the only
right of holders will be to receive the redemption price.
EXPIRATION OF RIGHTS
The Rights will expire on April 29, 2009 unless the expiration date is
extended by amendment as described below or unless the Rights are earlier
redeemed or exchanged by the Company as described above.
AMENDMENTS
Prior to a Distribution Date, the terms of the Rights may be amended by
the Board of Directors in its discretion without the consent of the Rights
holders. After a Distribution Date, the Board of Directors may, subject to
certain limitations, amend the Rights Agreement to clarify or resolve any
ambiguity, defect or inconsistency, to shorten or lengthen any time period under
the Rights Agreement or to make other changes that do not adversely affect the
interests of the Rights holders (excluding the interests of Acquiring Persons).
MISCELLANEOUS
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are subject to
adjustment under certain circumstances.
Until a Right is exercised, a Rights holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to this Registration Statement on Form 8-A,
dated May 7, 1999. A copy of the Rights Agreement is available to Rights holders
free of charge upon request to the Corporate Secretary of the Company.
This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
attached as an exhibit and is incorporated herein by reference.
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<PAGE> 5
Item 2. EXHIBITS.
1. Rights Agreement, dated as of April 29, 1999, between the
Company and American Securities Transfer & Trust, Inc., as
Rights Agent.
2. Certificate of Designation of Rights, Preferences and
Privileges of Preferred Stock (Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto).
3. Form of Right Certificate (Exhibit B to the Rights Agreement
filed as Exhibit 1 hereto).
4. Summary of Share Purchase Rights (Exhibit C to the Rights
Agreement filed as Exhibit 1 hereto).
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized.
CENTURY CASINOS, INC.
Date: May 7, 1999 By: /s/ NORBERT TEUFELBERGER
------------------------------------
Norbert Teufelberger, Chief
Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
1. Rights Agreement, dated as of April 29, 1999, between the
Company and American Stock Transfer & Trust, Inc., as Rights
Agent.
2. Certificate of Designation of Rights, Preferences and
Privileges of Preferred Stock (Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto).
3. Form of Right Certificate (Exhibit B to the Rights Agreement
filed as Exhibit 1 hereto).
4. Summary of Share Purchase Rights (Exhibit C to the Rights
Agreement filed as Exhibit 1 hereto).
</TABLE>
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<PAGE> 1
EXHIBIT 1
RIGHTS AGREEMENT
BETWEEN
CENTURY CASINOS, INC.
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.
AS RIGHTS AGENT
-----------------------------------
DATED AS OF APRIL 29, 1999
----------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. CERTAIN DEFINITIONS............................................................................................-1-
SECTION 2. APPOINTMENT OF RIGHTS AGENT....................................................................................-5-
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.................................................................................-5-
SECTION 4. FORM OF RIGHT CERTIFICATES.....................................................................................-7-
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION...................................................................-7-
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES........................................................-7-
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS..................................................-8-
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.............................................................-9-
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK.....................................................-10-
SECTION 10. PREFERRED STOCK RECORD DATE..................................................................................-11-
SECTION 11. ADJUSTMENTS TO PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS.................................-11-
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES...................................................-15-
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.........................................-16-
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES......................................................................-18-
SECTION 15. RIGHTS OF ACTION.............................................................................................-19-
SECTION 16. AGREEMENT OF RIGHT HOLDERS...................................................................................-19-
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER............................................................-20-
SECTION 18. CONCERNING THE RIGHTS AGENT..................................................................................-20-
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT....................................................-20-
SECTION 20. DUTIES OF RIGHTS AGENT.......................................................................................-21-
SECTION 21. CHANGE OF RIGHTS AGENT.......................................................................................-22-
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES...........................................................................-23-
SECTION 23. REDEMPTION...................................................................................................-23-
SECTION 24. NOTICE OF CERTAIN EVENTS.....................................................................................-24-
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 25. NOTICES......................................................................................................-24-
SECTION 26. SUPPLEMENTS AND AMENDMENTS...................................................................................-25-
SECTION 27. EXCHANGE.....................................................................................................-25-
SECTION 28. SUCCESSORS...................................................................................................-26-
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC....................................................-26-
SECTION 30. BENEFITS OF THIS RIGHTS AGREEMENT............................................................................-26-
SECTION 31. SEVERABILITY.................................................................................................-27-
SECTION 32. GOVERNING LAW................................................................................................-27-
SECTION 33. COUNTERPARTS; EFFECTIVENESS..................................................................................-27-
SECTION 34. DESCRIPTIVE HEADINGS.........................................................................................-27-
</TABLE>
EXHIBITS:
EXHIBIT A CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES A PREFERRED STOCK
EXHIBIT B FORM OF RIGHT CERTIFICATE
EXHIBIT C SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
<PAGE> 4
RIGHTS AGREEMENT
This Rights Agreement, dated as of April 29, 1999, is made between
Century Casinos, Inc., a Delaware corporation (the "Company"), and American
Securities Transfer & Trust, Inc., a Colorado corporation, as Rights Agent (the
"Rights Agent"),
WITNESSETH
WHEREAS, on April 29, 1999 (the "Declaration Date") the Board of
Directors of the Company authorized and declared a dividend distribution of one
right (a "Right") for each share of the Common Stock, par value $0.01 per share,
of the Company (the "Common Stock") outstanding at the close of business on May
13, 1999 (the "Record Date") and has further authorized the issuance of one
Right (as such number may hereafter be adjusted pursuant to the provisions of
this Rights Agreement) with respect to each share of Common Stock issued between
the Record Date and the earliest of the Distribution Date and the Expiration
Date (as such terms are hereinafter defined). Each Right shall represent the
right to purchase, upon the terms and subject to the conditions hereinafter set
forth, one one-hundredth (1/100th) of a share (subject to adjustment) of the
Series A Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of
the Company having the rights and preferences set forth in the form of
Certificate of Designation of Rights, Preferences and Privileges of Series A
Preferred Stock attached hereto as EXHIBIT A;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated;
"Acquiring Person" shall mean any Adverse Person or any Person who or
which, together with all Affiliates (as hereinafter defined) and Associates (as
hereinafter defined) of such Person, shall, subsequent to the Declaration Date,
become the Beneficial Owner (as hereinafter defined) of 20% or more of the
shares of Common Stock then outstanding, but shall not include (x) any Exempt
Person (as hereinafter defined), or (y) any Person who becomes a Beneficial
Owner of 20% or more of the shares of Common Stock then outstanding solely
because (1) of a change in the aggregate number of shares of Common Stock
outstanding since the last date on which such Person acquired Beneficial
Ownership of any shares of Common Stock, or (2) it acquired such Beneficial
Ownership in the good faith belief that such acquisition would not (A) cause
such Beneficial Ownership to exceed 20% of the shares of Common Stock then
outstanding and such Person relied in good faith in computing the percentage of
its Beneficial Ownership on publicly filed reports or documents of the Company
which are inaccurate or out-of-date, or (B) otherwise cause a Distribution Date
or the adjustment provided for in Section 11 to occur. Notwithstanding clause
(y) of the prior sentence, if any Person that is not an Acquiring Person because
of the operation of such clause (y) does not reduce its Beneficial Ownership of
shares of Common Stock to less than 20% by the close of business on the fifth
Business Day after notice from the Company (the date of notice being the first
day) that such Person's Beneficial Ownership of Common Stock so equals or
exceeds 20%, such Person shall, at the end of such five Business Day period,
become an Acquiring Person (and clause (y) shall no longer apply to such
Person). For purposes of this definition, the determination whether any Person
acted in "good faith" shall be conclusively determined by the Board of
Directors, acting by a vote of those directors of the Company whose approval
would be required to redeem the Rights under Section 23.
(b) "Adverse Person" means a Person who or which, together with all
Affiliates (as hereinafter defined) and Associates (as hereinafter defined) of
such Person, as to which the Board of Directors has, after consultation with
such advisors and such other investigation as it considers necessary, made the
following determinations: (i) such Person any time after the Rights Dividend
Declaration Date has become the Beneficial Owner of a substantial (but in no
event less than 15% of the shares of Common Stock then outstanding) amount of
Common Stock; and (ii) (A) such Person intends to cause the Company or its
Affiliates to repurchase such Common Stock beneficially owned by such Person or
to exert pressure against
<PAGE> 5
the Company or its Affiliates to take any action or enter into any transaction
or series of transactions with the intent or effect of providing such Person
with short-term gains or profits under circumstances in which the Board of
Directors of the Company determines that the long-term interests of the Company
and its stockholders would not be served by taking such action or entering into
such transaction or series of transactions; or (B) Beneficial Ownership of
Common Stock by such Person is reasonably likely to have a material adverse
effect on the business, competitive position, prospects, business reputation, or
financial condition of the Company and its Subsidiaries. No delay or failure by
the Board of Directors to make a determination that any Person is an Adverse
Person will in any way waive or otherwise adversely affect the power of the
Board of Directors to declare any Person an Adverse 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 of this Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," and shall be deemed to have "Beneficial Ownership" of,
any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, is deemed to beneficially own (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement) or has the right to dispose of;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), arrangement or understanding (whether or not in writing), or upon
the exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person
shall not be deemed the "Beneficial Owner" of or to "beneficially own," or to
have the "Beneficial Ownership" of, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for payment
or exchange; or (B) the right to vote, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of or to "beneficially
own," or to have the "Beneficial Ownership" of, any security under this clause
(ii)(B) as a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (1) arises solely from
a revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act, and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such Person
or any of such Person's Affiliates or Associates has any agreement (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause (B) of
subparagraph (ii) of this definition) or disposing of any voting securities of
the Company.
"Board of Directors" shall mean the Board of Directors of the Company
or any duly authorized committee thereof.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Colorado are authorized or
obligated by law or executive order to close.
"Certificate of Designation" shall mean the Certificate of Designation
of Rights, Preferences and
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<PAGE> 6
Privileges of Series A Preferred Stock, a copy of which is attached hereto as
EXHIBIT A.
"Close of business" on any given date shall mean 5:00 P.M., Denver,
Colorado time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day, "Close of business" shall mean 5:00 P.M., Denver, Colorado time,
on the next succeeding Business Day.
"Common Stock" when used with reference to the Company shall mean the
shares of Common Stock, par value $0.01 per share, of the Company, or any other
shares of capital stock of the Company into which the Common Stock shall be
reclassified or changed. "Common Stock" when used with reference to any Person
other than the Company shall mean the Common Stock (or, in the case of a trust,
partnership or other unincorporated entity, the equivalent equity interest) with
the greatest voting power of such Person (or, (i) if such Person is a Subsidiary
of another Person, the Person which ultimately controls such first-mentioned
Person, or (ii) if such Person is ultimately controlled by two or more Persons,
the controlling Person having Common Stock or equivalent equity interests with
the greatest current aggregate market value (as determined pursuant to Section
13(b) hereof)), together with all rights and benefits (however denominated or
constituted) relating to such Common Stock (including, without limitation, any
rights or warrants to acquire additional shares of such Common Stock or other
securities or assets, or to participate in any trust for the benefit of holders
of such shares, or to share in the benefits of any agreements or other
arrangements for the benefit of such holders), whether or not such rights are
yet exercisable, and together with any other securities which are represented by
the certificates for such shares or are transferred in connection with transfers
of such shares.
"Current Market Price" per share of Common Stock or Preferred Stock
("Stock") on any date shall be deemed to be the average of the daily closing bid
price per share of Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in
the event that the Current Market Price per share of Stock is determined during
a period following the announcement by the issuer of such Stock of (A) a
dividend or distribution on such Stock, or (B) any subdivision, combination or
reclassification of such Stock, and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification of such Stock, then, and
in such case, the "Current Market Price" shall be proportionately adjusted to
take into account ex-dividend or ex-distribution trading and calculated as if
such ex-dividend or record date had occurred on the first day of 30-day period.
The closing bid price for each day shall be the bid price as reported on the
Nasdaq SmallCap Market or, if the Stock is not authorized for quotation on the
Nasdaq SmallCap Market, the Nasdaq National Market, or as reported in the
principal consolidated transaction reporting system with respect to securities
listed or the principal national securities exchange on which the Stock is
listed or admitted to trading or, if the Stock is not listed or admitted to
trading on any national securities exchange, the last price or, if not so
quoted, the average of the closing bid prices per share for the securities in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") or such other
system then in use, or, if on any such date the security is not quoted by such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Stock selected by the Board of
Directors. If on any such date no market maker is making a market in the Stock
the fair value of such shares on such date as determined in good faith by the
Board of Directors shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the shares of the
Stock are listed or admitted to trading or traded is open for the transaction of
business or, if the Stock is not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly held or
not so listed or traded, "Current Market Price" per share shall mean the fair
value per share of Common Stock as determined in good faith by the Board of
Directors.
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 traded, the "Current Market Price" per share of the Preferred Stock
shall be conclusively deemed to be an amount equal to the Current Market Price
per share of the Common Stock, as determined (appropriately adjusted to reflect
any stock split, stock dividend or similar
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<PAGE> 7
transaction occurring after the date hereof), multiplied by 100. If neither the
Common Stock nor the Preferred Stock are publicly held or so listed or traded,
the "Current Market Price" per share of the Preferred Stock shall mean the fair
market value per share as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive and binding for all purposes.
"Distribution Date" shall have the meaning set forth in Section 3
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"Exempt Person" shall include (i) the Company, (ii) any Subsidiary (as
hereinafter defined) of the Company or (iii) any employee benefit plan of the
Company or any of its Subsidiaries, or any entity holding shares of Common Stock
which was organized, appointed or established by the Company or any Subsidiary
of the Company for or pursuant to the terms of any such plan.
"Person" shall mean any individual, firm, corporation, trust,
partnership or other entity, whether similar or dissimilar to the foregoing.
"Preferred Stock" shall mean the Series A Preferred Stock, par value
$0.01 per share, of the Company having the rights and preferences set forth in
the form of Certificate of Designation of Rights, Preferences and Privileges of
Series A Preferred Stock attached to this Agreement as EXHIBIT A.
"Purchase Price" with respect to each Right shall mean $4.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references hereto
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"Redemption Price" with respect to each Right shall mean $0.001, as
such amount may from time to time be adjusted in accordance with Section 23. All
references herein to the Redemption Price shall mean the Redemption Price in
effect at the time in question.
"Right Certificate" shall mean a certificate representing a Right in
substantially the form attached hereto as EXHIBIT B.
"Rights" shall mean the rights to purchase shares of Preferred Stock
(or other securities) as provided in this Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in effect on
the date in question, unless otherwise specifically provided.
"Stock Acquisition Date" shall mean 5:00 P.M., Denver, Colorado time,
on the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such; PROVIDED, HOWEVER, that if such Person
is determined not to have become an Acquiring Person pursuant to clause (y) of
the definition of Acquiring Person above, then no Stock Acquisition Date shall
be deemed to have occurred.
"Subsidiary" shall mean, with respect to any Person, any other Person
of which securities or other ownership interests having ordinary voting power,
in the absence of contingencies, to elect a majority of the board of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation), are
at the time directly or indirectly owned by such first Person.
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<PAGE> 8
The terms set forth below are defined in the Sections indicated below:
<TABLE>
<CAPTION>
TERM SECTION
---- -------
<S> <C>
Declaration Date RECITAL
Distribution Date 3(a)
Equivalent Shares 11(b)
Exchange Consideration 27
Expiration Date 7(a)
Final Expiration Date 7(a)
Principal Party 13(b)
Record Date RECITAL
Right RECITAL
Rights Agent RECITAL
Summary of Rights 3(b)
</TABLE>
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights Agents shall
be as the Company shall determine.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the twentieth day
after the Stock Acquisition Date (including any such date which is after the
Declaration Date and prior to the issuance of the Rights), (ii) the close of
business on the twentieth day (or such later day as may be determined by action
of the Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement of a tender or
exchange offer by any Person (other than an Exempt Person) to acquire (when
added to any equity securities as to which such Person is the Beneficial Owner
immediately prior to such commencement) Beneficial Ownership of 20% or more of
the issued and outstanding Common Stock (including any such date which is after
the Declaration Date and prior to the issuance of the Rights), and (iii) the
close of business on the twentieth day (or such later day as may be determined
by action of the Board of Directors of the Company prior to such time as any
Person becomes an Acquiring Person) after the filing by any Person (other than
an Exempt Person) of a registration statement under the Securities Act, with
respect to a contemplated exchange offer to acquire (when added to any equity
securities as to which such Person is the Beneficial Owner immediately prior to
such filing) beneficial ownership of 20% or more of the issued and outstanding
Common Stock (including any such date which is after the Declaration Date and
prior to the issuance of the Rights) (the earliest of such dates referred to in
clauses (i), (ii) and (iii) of this Section 3(a) being herein referred to as the
"Distribution Date"), (A) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for shares of Common Stock also shall be deemed to be Right Certificates (as
such term is hereinafter defined)) and not by separate Right Certificates, and
(B) the Rights (and the right to receive Right Certificates) will be
transferable only in connection with the transfer of the underlying Common
Stock; PROVIDED, that if the Distribution Date would be prior to the Record
Date, the Record Date shall be the Distribution Date, and PROVIDED, FURTHER,
that (x) if, following the occurrence of the Stock Acquisition Date and prior to
the Distribution Date, (1) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock of the
Company in one transaction or a series of transactions (not directly or
indirectly involving the Company or any of its Subsidiaries) such that such
Person is thereafter the Beneficial Owner of less than 20% (or, in the case of
an Adverse Person, 15%) of the outstanding Common Stock of the Company, (2)
there are no other Persons, immediately following the occurrence of the event
described in clause (1), who are Acquiring Persons, and (3) the Board of
Directors of the Company shall so approve, then, for purposes of this Agreement,
the Stock Acquisition Date shall be deemed never to have occurred, and (y) if a
tender or exchange offer referred to in clauses (ii) or (iii) above is canceled
or withdrawn prior to the Distribution Date, such offer shall be deemed, for
purposes of this Agreement, never to have been made. As soon as practicable
after the Company has notified the Rights Agent of the occurrence of the
Distribution Date, the Rights Agent will send, by first-class, insured, postage
prepaid mail, to each record holder of the Common
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<PAGE> 9
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 Right Certificates,
evidencing one Right for each share of Common Stock so held, subject to
adjustment as herein provided. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form of EXHIBIT C hereto (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of the Common Stock on
the Record Date, as shown by the records of the Company, at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date (or
the earlier redemption, exchange, expiration or termination of the Rights), the
Rights will be evidenced solely by such certificates for Common Stock registered
in the names of the holders of the Common Stock and the registered holders of
the Common Stock shall also be registered holders of the associated Rights.
Until the Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights), the surrender for transfer of any certificate for
Common Stock in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificates.
(c) The Company will mail to any record holder of a Right (including,
prior to the Distribution Date, a record holder of Common Stock) a copy of this
Rights Agreement, without charge, within ten Business Days of a written request
therefor.
(d) Rights shall be issued in respect of all shares of Common Stock
which are issued or sold out of treasury after the Record Date but prior to the
Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights). All certificates for Common Stock issued or sold
after the Record Date but prior to the earlier of the Distribution Date and the
Expiration Date shall be deemed also to be certificates for Rights and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Century Inc. (the "Company") and American Securities Transfer
& Trust, Inc., as Rights Agent, dated as of April 29, 1999, as
it may from time to time be supplemented or amended pursuant
to its terms (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 may be redeemed, may expire, or may be
evidenced by separate certificates and no longer be evidenced
by this certificate. The Company will mail to the holder of
record of this certificate a copy of the Rights Agreement
without charge within ten business days after receipt of a
written request therefor. Under certain circumstances, as set
forth in the Rights Agreement, Rights issued to, or held by,
any Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, may become null
and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights) the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any of such certificates shall also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificates. Notwithstanding this clause (d), the omission of a legend shall
not affect the enforceability of any part of this Rights Agreement or the rights
of any holder of Rights.
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<PAGE> 10
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall be substantially in
the form of EXHIBIT B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Rights Agreement, or as may be required to comply with any applicable law,
rule or regulation or with any rule or regulation of any stock exchange or
quotation system on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 7, Section 11 and Section
22 hereof, the Right Certificates, whenever issued, shall be dated as of the
Distribution Date, and on their face shall entitle the holders thereof to
purchase such number of one one-hundredths (1/100ths) of one share of Preferred
Stock as shall be set forth therein at the Purchase Price set forth therein, but
the number and type of shares of Preferred Stock and other securities
purchasable upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein. To the extent provided in Section
4(b) hereof, certain Rights Certificates shall contain the legend provided for
therein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights which are null and void pursuant to Section
11(a)(iii) hereof and any Right Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence shall contain (to the
extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby are
null and void.
The provisions of Section 11(a)(iii) hereof shall be operative
whether or not the foregoing legend is contained on any such Right Certificate.
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, Vice Chairman of the Board, Chief Executive
Officer, President or Chief Financial Officer, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company whose manual or facsimile signature is affixed to the
Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the Person who
signed such Right Certificates had not ceased to be such officer of the Company.
Any Right Certificate may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Right Certificates upon exercise or transfer,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 11(a)(iii), Section 14 and
Section 27 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 Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become null and void pursuant to Section 11(a)(iii) hereof or
that have been exchanged pursuant to Section 27 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate or Right
-7-
<PAGE> 11
Certificates, representing, in the aggregate, the same number of Rights as the
Right Certificate or Right Certificates surrendered then represented. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate or Right
Certificates until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner, former Beneficial Owner and transferee
Beneficial Owner (and Associates and Affiliates of the foregoing) as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
11(a)(iii), Section 14 and Section 27 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment by such holder of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 11(a)(iii), Section 23 and Section 27 hereof,
each Right shall entitle the registered holder thereof, upon exercise thereof as
provided herein, to purchase for the Purchase Price at any time after the
Distribution Date and prior to the earlier of (i) the close of business on April
29, 2009 (the "Final Expiration Date"), (ii) the date and time that the Rights
are redeemed as provided in Section 23 hereof and (iii) the time at which all
exercisable Rights are exchanged pursuant to Section 27 hereof (the earlier of
(i), (ii) and (iii) herein being referred to as the "Expiration Date"), one
one-hundredth (1/100th) of a share of Preferred Stock, subject to adjustment
from time to time as provided in Section 11.
(b) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth (1/100th)
of a share of Preferred Stock as to which the Rights are exercised, at or prior
to the Expiration Date.
(c) The Purchase Price for each one one-hundredth (1/100th) of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be $4.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall, except as otherwise provided in this Section 7(c), be
payable in lawful money of the United States of America in accordance with
Section 7(d) below. In lieu of the cash payment referred to in the immediately
preceding sentence, following the occurrence of a Distribution Date, the
registered holder of a Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part upon surrender
of the Right Certificate together with an election to exercise such Rights
without payment of cash on the reverse side thereof duly completed. With respect
to any such Rights as to which such an election is made, the holder shall
receive a number of one one-hundredths (1/100ths) of a share of Preferred Stock
or other securities having a value equal to the
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<PAGE> 12
difference between (i) the value of the Preferred Stock or other securities that
would have been issuable upon payment of the Purchase Price and (ii) the
Purchase Price. For purposes of this Section 7(c), the value of any securities
shall be the Current Market Value thereof (or of the security to which such
security is deemed for purposes of this Agreement to be an equivalent). For
purposes of this Section 7(c), Current Market Value shall mean the closing price
of any such securities on the Trading Day immediately preceding the Distribution
Date.
(d) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth (1/100th) of a share of Preferred Stock (or other
securities, as the case may be) to be purchased, and an amount equal to any
applicable transfer tax, in cash or by certified check or bank draft payable to
the order of the Company, or a duly completed election to exercise without
payment of cash, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i)(A) requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the total number of shares of Preferred Stock to be purchased
or acquired and/or (B) requisition from the depositary agent depositary receipts
representing such number of fractional shares of Preferred Stock as are to be
purchased, in which case certificates for the fractional shares of Preferred
Stock so represented shall be deposited with the depositary agent (and the
Company hereby irrevocably authorizes and directs its transfer agent and any
such depositary agent to comply with all such requests), (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt thereof, promptly deliver any
such cash to or upon the order of the registered holder of such Right
Certificate; PROVIDED, that in the case of a purchase of securities other than
Preferred Stock, the Rights Agent shall promptly take the appropriate actions
corresponding to the foregoing clauses (i) through (iii). In the event that the
Company is obligated to issue other securities and/or distribute other property
pursuant to Section 9 or Section 11 hereof, the Company will make all
arrangements necessary so that such other securities, or other property are
available for distribution by the Rights Agent, if and when appropriate.
(e) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
whatsoever with respect to a registered holder of Rights upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and non-transferable pursuant
to Section 11(a)(iii) surrendered or presented for any purpose shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Right
Certificate purchased or acquired by the Company. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right
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<PAGE> 13
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it shall use its best efforts
to at all times 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.
(b) In the event that there shall not be sufficient shares of Preferred
Stock issued but not outstanding or authorized but unissued to permit the
exercise or exchange of Rights in accordance with Section 11 and Section 27, the
Company covenants and agrees that it will take all such action as may be
necessary to authorize additional Preferred Stock for issuance upon the exercise
or exchange of Rights pursuant to Section 11 and Section 27; PROVIDED, HOWEVER,
that if the Company is unable to cause the authorization of additional shares of
Preferred Stock, then the Company shall, or in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (A) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Preferred Stock and
requiring payment therefor, (B) upon due exercise of a Right and payment of the
Purchase Price for each share of Preferred Stock as to which such Right is
exercised, issue equity securities (including shares of Common Stock) having a
value equal to the value of the Preferred Stock which otherwise would have been
issuable pursuant to Section 11 or Section 27, or (C) upon due exercise of a
Right and payment of the Purchase Price, for each share of Preferred Stock as to
which such Right is exercised, distribute a combination of Preferred Stock, cash
and/or other equity and/or debt securities having an aggregate value equal to
the value of the Preferred Stock which otherwise would have been issuable
pursuant to Section 11 or Section 27. To the extent that any legal or
contractual restrictions (pursuant to agreements or instruments in effect prior
to the Distribution Date to which it is party) prevent the Company from paying
the full amount payable in accordance with the foregoing sentence, the Company
shall pay to holders of the Rights as to which such payments are being made all
amounts which are not then restricted on a pro rata basis as such payments
become permissible under such legal or contractual restrictions until such
payments have been paid in full.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred Stock and/or Common
Stock or other securities delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares of Preferred Stock or Common
Stock or other securities (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(d) The Company covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock and/or Common Stock or other securities, as the
case may be, upon exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
involved in the transfer or delivery of Right Certificates or the issuance or
delivery of certificates or depository receipts for shares of Preferred Stock
and/or Common Stock or other securities, as the case may be, in a name other
than that of the registered holder of the Right Certificate evidencing rights
surrendered for exercise or to issue or deliver any certificates or depository
receipts for shares of Preferred Stock and/or Common Stock or other securities,
as the case may be, upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(e) So long as the shares of Preferred Stock issuable upon the exercise
of the Rights may be listed on any national securities exchange or quoted on
Nasdaq, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange or quoted on Nasdaq upon official notice of issuance
of such exercise.
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<PAGE> 14
(f) The Company shall, unless an appropriate exemption from the
provisions of the Securities Act is available, use its best efforts (i) to file,
as soon as practicable following the Stock Acquisition Date or at such earlier
date as may be required by law, as the case may be, a registration statement
under the Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act and the
rules and regulations promulgated by the Securities Exchange Commission
thereunder) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the expiration of the Rights. The
Company will also take such action as may be appropriate to ensure compliance
with the securities or "blue sky" laws of the various states in connection with
the Rights and the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date set forth in
clause (i) of the first sentence of this Section 9(f), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective; PROVIDED, HOWEVER, that no such suspension shall remain
effective after, and the Rights without any further action by the Company or any
other Person shall become exercisable immediately upon, the effectiveness of
such Registration Statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable (x) unless and
until the registration statement under the Securities Act referred to above
shall have been declared effective by the Securities and Exchange Commission,
(y) in any jurisdiction, unless and until any requisite state securities or
"blue sky" qualification in such jurisdiction shall have been obtained, and (z)
in a jurisdiction in which the exercise of such Right shall not then be
permitted under applicable law.
SECTION 10. PREFERRED STOCK RECORD DATE. Each Person (other than the
Company) in whose name any certificate or depository receipt for Preferred
Stock, Common Stock and/or other securities, as the case may be, is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such Preferred Stock, Common Stock and/or other securities,
as the case may be, represented thereby on, and such certificate or depository
receipt shall be dated the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the transfer books of the Company for
the Preferred Stock, Common Stock and/or other securities are closed, such
Person shall be deemed to have become the record holder of such shares of
Preferred Stock, Common Stock and/or other securities on, and such certificate
or depository receipt shall be dated, the next succeeding Business Day on which
the transfer books of the Company for the Preferred Stock, Common Stock and/or
other securities are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a holder of shares of Preferred Stock, Common Stock and/or other securities
of the Company with respect to 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. ADJUSTMENTS TO PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares subject to purchase
upon exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the date
of this Rights Agreement (A) declare or pay a dividend on the Preferred Stock
which is payable in shares of Preferred Stock or other securities of the
Company, (B) subdivide or split the outstanding shares of Preferred Stock into a
greater number of shares, (C) combine or consolidate the outstanding shares of
Preferred Stock into a smaller number of shares of Preferred Stock or effect a
reverse split of the outstanding shares of Preferred Stock or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such
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<PAGE> 15
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving entity), except as otherwise provided in
this Section 11, the Purchase Price in effect at the time of the record date for
such dividend or the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock or interests therein issuable upon exercise of a Right on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of an
amount equal to (x) the Purchase Price in effect immediately prior to the record
date or effective date of such dividend, subdivision, combination or
reclassification multiplied by (y) the number of one one-hundredths (1/100ths)
of a share of Preferred Stock, or the number of shares of capital stock, as the
case may be, as to which a Right was exercisable immediately prior to such date,
the aggregate number and kind of shares of Preferred Stock or of capital stock
or interests therein which, if such Right had been exercised immediately prior
to such date he would have owned upon such exercise and been entitled to
receive, or would be deemed to have owned, 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) Subject to the second proviso of the first sentence of
Section 3(a), and Sections 13(a) and 27 of this Agreement, in the event that the
Stock Acquisition Date occurs, then, subject to the last sentence of Section
23(b) hereof, and in each such case, proper provision shall be made so that each
holder of a Right (except as otherwise provided in clause (iii) below)
thereafter (or, if the Distribution Date has not then occurred, upon the
Distribution Date) shall have the right to receive, upon exercise thereof at a
price equal to the current Purchase Price in accordance with this Rights
Agreement, such number of one one-hundredths (1/100ths) of a share of Preferred
Stock as shall equal the result obtained by multiplying the Purchase Price by a
fraction, the numerator of which is the number of one one-hundredths (1/100ths)
of a share of Preferred Stock for which a Right is then exercisable, and the
denominator of which is 50% of the then Current Market Price of the Company's
Common Stock on the Stock Acquisition Date.
(iii) Notwithstanding any provision of this Agreement other
than the second proviso of the first sentence of Section 3(a), from and after
the Stock Acquisition Date, any rights beneficially owned by (A) an Acquiring
Person or any Associate or Affiliate thereof, (B) a transferee of an Acquiring
Person or any Associate of Affiliate thereof, (C) a transferee of an Acquiring
Person (or Associate or Affiliate thereof) who becomes the transferee of such
Rights concurrently with such Acquiring Person becoming such or at any time
thereafter, or (D) a transferee of an Acquiring Person (or Associate or
Affiliate thereof) who becomes a transferee prior to the Acquiring Person
becoming such and receives such Rights pursuant to either (1) a transfer
(whether or not for consideration) by the Acquiring Person to holders of its
stock or other equity securities or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 11(a)(iii) shall be and
become null and void, and any existing or subsequent holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to insure that the
provisions of this Section 11(a)(iii) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder. No
Right Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be canceled.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of shares of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or securities having the
same rights, privileges and preferences as the Preferred Stock ("Equivalent
Shares")) or securities convertible into Preferred Stock or Equivalent Shares at
a price per share of Preferred Stock or per Equivalent Share (or having a
conversion
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<PAGE> 16
or exercise price per share of Preferred Stock, if a security convertible into
or exercisable for Preferred Shares or Equivalent Shares) less than the Current
Market Price per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such date by a fraction, the
numerator of which shall be the sum of (i) the number of shares of Preferred
Stock and Equivalent Shares outstanding on such record date, plus (ii) the
number of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent Shares to be so
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 sum of (A) the number of shares of Preferred
Stock and Equivalent Shares outstanding on such record date plus (B) the number
of additional shares of Preferred Stock and/or Equivalent Shares to be offered
for subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of on Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid by delivery
of consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agents and shall be conclusive and binding on the Rights
Agent and the holders of Rights. Shares of Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of shares of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving entity) of evidences of indebtedness or
assets (other than a regular periodic cash dividend or a dividend payable in
shares of Preferred Stock), or convertible securities, subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the difference between (i) the Current
Market Price per share of Preferred Stock on such record date, minus (ii) the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive and binding on the Rights Agent and the
holder of Rights) of the portion of the assets or evidences of indebtedness to
be so distributed or of such convertible securities, subscription rights or
warrants applicable to one share of Preferred Stock and the denominator of which
shall be such Current Market Price per share of Preferred Stock; PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of on Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment to
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% to the Purchase Price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 11(d) 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 one-millionth of a share of Preferred Stock, or one
one-hundredth interest in any other share or security, as the case may be,
whichever is of lesser value. Notwithstanding the first sentence of this Section
11(d), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(e) In the event that at any time, as a result of an adjustment made
pursuant to Section 11 or Section 13 hereof, the holder of any Right thereafter
exercised shall be entitled to receive upon exercise of such Right any
securities other than shares of Preferred Stock or interests therein, thereafter
the number or amount of
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<PAGE> 17
such other securities 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 Section 11(a), (b), (c), (d), (f), (g), (h),
(i), (j) and (l), 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
securities.
(f) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths
(1/100ths) of a share of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustments as provided
herein.
(g) Unless the Company shall have exercised its election as provided in
Section 11(h) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(a), (b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths (1/100ths) of a share of Preferred Stock (calculated to the
nearest one one-millionth of a share of Preferred Stock) obtained by (i)
multiplying (A) the number of one one-hundredths (1/100ths) of a share of
Preferred Stock covered by a Right immediately prior to this adjustment by (B)
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.
(h) 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 one one-hundredths (1/100ths) of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths (1/100ths) of a share of Preferred Stock for which such Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one one-millionth of a share of Preferred
Stock) obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(h), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holder shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths (1/100ths) of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredths (1/100ths) of a share of Preferred Stock which were expressed
in the initial Right Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par or stated value, if any, of the Preferred
Stock issuable upon exercise of the Rights, the Company shall take any action
which may, in the opinion of its counsel, be necessary in order that the Company
may
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<PAGE> 18
validly and legally issue, as fully paid and nonassessable, such number of
shares of Preferred Stock at such adjusted Purchase Price.
(k) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the number of shares of Preferred Stock and other securities of the Company, if
any, issuable upon such exercise on the basis of 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 of Preferred Stock upon the occurrence of the event requiring such
adjustment.
(l) 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 it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the
Current Market Price, (iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or exchangeable
for shares of Preferred Stock, (iv) dividends on the Preferred Stock payable
solely in Preferred Stock or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to the
holders of its Preferred Stock, shall not be taxable to such stockholders.
(m) The Company covenants and agrees that it shall not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer, in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries taken as a whole, to any other Person or
Persons if (A) at the time or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments outstanding or
agreements or arrangements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (B)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of a Person who constitutes, or would constitute, the
"Principal Party" for the purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise then by payment of dividends in Common Stock) into
a greater or lesser number of shares of Common Stock, then in any such case (i)
the number of one one-hundredths (1/100ths) of shares of Preferred Stock
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths (1/100ths) of a share
of Preferred Stock so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and (ii) each
share of Common Stock outstanding immediately after such event shall be issued
with respect to it that number of rights which each share of Common Stock
outstanding immediately prior to such event have issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
(o) The Company covenants and agrees that after the Distribution Date
it will 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 substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for
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<PAGE> 19
such adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing 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.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person, and the Company
shall not be the continuing or surviving entity of such consolidation or merger,
(y) any Person shall consolidate with, or merge with and into the Company, and
the Company shall be the continuing or surviving entity of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole and calculated on the basis of the Company's most
recent regularly prepared financial statements) to any other Person or Persons,
then, and in each such case, appropriate provision shall be made so that (i)
each holder of a Right, except as provided in Section 11(a)(iii) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price multiplied by the number of one one-hundredths (1/100ths)
of a share of Preferred Stock for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of shares of Preferred
Stock, such number of validly authorized and issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the Principal Party (as
hereinafter defined, including the Company as successor thereto or as the
surviving entity), not subject to any rights of call or first refusal, liens,
encumbrances or other claims, as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-hundredths
(1/100ths) of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of any event described in Section
13(a)(x), (y) or (z) hereof, and (B) dividing that product (which, following the
first occurrence of any event referred to in Section 13(a)(x), (y) or (z), shall
be referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of Common Stock of
such Principal Party on the date of consummation of such consolidation, merger,
sale or transfer; (ii) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply to
such Principal Party and (iv) such Principal Party shall take such steps
(including, but not limited to, the authorization and reservation of a
sufficient number of shares of its Common Stock to permit exercise of all
outstanding Rights in accordance with this Section 13(a)) in connection with
such consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights, PROVIDED, that upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of the Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price,
such cash, shares, rights, warrants and other property which the holder would
have been entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the occurrence of any
event described in Section 13(a)(x), (y) or (z).
(b) "Principal Party" shall mean
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<PAGE> 20
(i) in the case of any transaction described in clause (x) or
(y) of Section 13(a) hereof: (A) the Person that is the issuer of any securities
into which shares of Common Stock of the Company is converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Stock of which has the greatest aggregate market value of shares outstanding or
(B) if no securities are so issued, (x) the Person that is the other party to
the merger, or, if there is more than one such Person, the Person the Common
Stock of which has the greatest aggregate market value of shares outstanding or
(y) if the Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the corporation if it
survives) or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (z) of
Section 13(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions or, if each person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so
transferred or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons as is the issuer
of Common Stock having the greatest aggregate market value of shares
outstanding;
PROVIDED, HOWEVER, that in any such case described in the foregoing clause
(b)(i) or (ii), (A) if the Common Stock of such Person is not at such time and
has not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and (B) if such
Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stock of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value of shares outstanding, or (C)
if such Person is owned, directly or indirectly, by a joint venture formed by
two or more persons that are not owned, directly or indirectly, by the same
person, the rules set forth in (A) and (B) above shall apply to each of the
owners having an interest in the venture as if the Person owned by the joint
venture was a Subsidiary of both or all of such joint venturers, and the
Principal Party in each such case shall bear the obligations set forth in this
Section 13 in the same ratio as its interest in such Person bears to the total
of such interests.
(c) The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The Company shall not agree to consummate or consummate any such
consolidation, merger, sale or 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 so providing, confirming that the requirements of
Sections 13(a) and (b) hereof promptly shall be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to Sections 13(a)
and (b) hereof and further providing that, as soon as practicable after the date
of any consolidation, merger or sale of assets mentioned in Section 13(a), the
Principal Party will
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, will use its
best efforts to cause such registration statement to become effective as soon as
practicable after such filing and to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the date of
expiration of the Rights, and similarly comply with applicable state securities
laws; and
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of the Rights to
be reported by Nasdaq or such other system then in use; and
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<PAGE> 21
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If any event described in this
Section 13 shall occur at any time after the occurrence of a Stock Acquisition
Date, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a) hereof.
(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 Bylaws 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 the transaction referred to in this Section 13, shares
of Common Stock of such Principal Party at less than the Current Market Price
per share 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 Section 13, then, in
such event, the corporation hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the Corporation
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights existing or arising subsequent to the Distribution Date,
there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the Current Market Value of a whole Right.
For the purposes of this Section 14(a), the Current Market Value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights otherwise would have been
issuable. The closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the closing bid and asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date Rights are not quoted by any such
organization and no professional market maker is making such a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors shall be used.
(b) The Company shall not be required to issue fractional interests in
the shares of Preferred Stock (other than fractional interests which are
integral multiples of one one-hundredth (1/100th) of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence
fractional interests in shares of Preferred Stock (other than fractions which
are integral multiplies of one one-hundredth (1/100th)
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<PAGE> 22
of a share of Preferred Stock). Fractional interests in shares of Preferred
Stock in integral multiples of one one-hundredth (1/100th) of a share of
Preferred Stock may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; PROVIDED, that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Stock represented by such depositary receipts. In lieu of fractional interests
in shares of Preferred Stock, the Company shall pay to the registered holders of
Right Certificates at the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the Current Market
Value of one share of Preferred Stock or other securities of the Company. For
purposes of this Section 14(b), the Current Market Value of one share of
Preferred Stock shall be the closing price of one share of Preferred Stock for
the Trading Day immediately prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the Current Market Value of one share of
Common Stock. For purposes of this Section 14(c), the Current Market Value of
one share of Common Stock shall be the closing price of one share of Common
Stock for the Trading Date immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights subsequent to the Distribution
Date, or any fractional share of Preferred Stock upon exercise of Rights (except
as provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Agreement, to the extent any such rights exist, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of Common Stock); and any registered
holder of any Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Rights 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 Rights Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Rights Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate certificates fully executed;
(c) subject to Section 6, Section 7(f) and Section 11(a) hereof, the
Company and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated 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, shall be affected by any notice to the
contrary; and
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<PAGE> 23
(d) notwithstanding anything in this Rights Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; PROVIDED, HOWEVER, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Preferred Stock or any interest therein or any other securities of the Company
which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of Directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 24 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
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 its capacity as Rights Agent in
reliance upon any Right Certificate or certificate for Common Stock or 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 be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any trust, corporation or other entity into which the Rights Agent
or any successor Rights Agent may be merged or with which it may be
consolidated, or any trust, corporation or other entity resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party or any trust, corporation or other entity succeeding to the
corporate trust business of the Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further action on the part of any of the parties hereto, provided
that such trust, corporation or other entity 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 Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this Rights
Agreement.
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<PAGE> 24
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly set forth in this Rights Agreement and no
implied duties or obligations shall be read into this Rights Agreement against
the Rights Agent. The Rights Agent undertakes the duties and obligations imposed
by this Rights Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound;
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person or
any Affiliate or Associate thereof 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 herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the Vice
Chairman of the Board, the President or the Chief Financial Officer and by the
Secretary or an Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agents shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including certain of the Rights becoming void pursuant to Section
11(a)(iii) hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13 or 23
hereof, or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock to be issued
pursuant to this Rights Agreement or any Right Certificate or as to whether any
shares of Preferred Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Rights Agreement.
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<PAGE> 25
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President or the Chief
Financial Officer 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.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, PROVIDED reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Rights Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
(l) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including reasonable
fees and expenses of counsel) which the Rights Agent may incur resulting from
its actions as Rights Agent pursuant to this Rights Agreement; PROVIDED,
HOWEVER, that the Rights Agent shall not be indemnified or held harmless with
respect to any such loss, liability, damage or expense incurred by the Rights
Agent as a result of, or arising out of, its own negligence, bad faith or wilful
misconduct. In no case shall the Company be liable with respect to any action,
proceeding, suit or claim against the Rights Agent unless the Rights Agent shall
have notified the Company, by letter or by facsimile confirmed by letter, of the
assertion of an action, proceeding, suit or claim against the Rights Agent,
promptly after the Rights Agent shall have notice of any such assertion of an
action, proceeding, suit or claim or have been served with the summons or other
first legal process giving information as to the nature and basis of the action,
proceeding, suit or claim. The Company shall be entitled to participate at its
own expense in the defense of any such action, proceeding, suit or claim, and,
if the Company so elects, the Company shall assume the defense of any such
action, proceeding, suit or claim. In the event that the Company assumes such
defense, the Company shall not thereafter be liable for the fees and expenses of
any additional counsel retained by the Rights Agent, so long as the Company
shall retain counsel satisfactory to the Rights Agent, in the exercise of its
reasonable judgment, to defend such action, proceeding, suit or claim. The
Rights Agent agrees not to settle any litigation in connection with any action,
proceeding, suit or claim with respect to which it may seek indemnification from
the Company without the prior written consent of the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the shares of Common Stock and Preferred Stock, if any, by
registered or certified mail, and, subsequent to the Distribution Date, to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock, if any, by
registered or certified mail, and
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<PAGE> 26
subsequent to the Distribution Date, to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state at the United
States, in good standing, having a principal office in the United States of
America, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by federal
or state authority. 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 such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock and, subsequent to the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares of
Preferred Stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Rights Agreement. In
addition, if deemed necessary or appropriate by the Board of Directors of the
Company, the Company may issue Right Certificates representing the appropriate
number of Rights in connection with the issuance or sale of Common Stock
following the Distribution Date but prior to the Expiration Date; PROVIDED,
HOWEVER, that (a) 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 Right Certificate would be issued, and (b) no such Right
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.
(a) The Company may, by resolution of the Board of Directors, at its
option, at any time prior to the earlier to occur of (i) the close of business
on the twentieth day following the Stock Acquisition Date, and (ii) the close of
business on the Final Expiration Date, elect to redeem all but not less than all
of the then outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock or Preferred
Stock (based on the Current Market Price of the Common Stock or Preferred Stock,
as applicable at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors.
(b) If, following the occurrence of a Stock Acquisition Date and prior
to the Distribution Date, (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock of the
Company in one transaction, or a series of transactions (not directly or
indirectly involving the Company or any of its Subsidiaries), which did not
result in an event described in Section 13 hereof, such that such Person is
thereafter a Beneficial Owner of less than 20% of the outstanding Common Stock
of the Company, (ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are Acquiring Persons, and
(iii) the Board of Directors of the Company shall so
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<PAGE> 27
approve, then the Company's right of redemption provided in subparagraph (a) of
this Section 23 shall be reinstated and thereafter all outstanding Rights shall
again be subject to the provisions of this Section 23. Notwithstanding anything
to the contrary contained in this Rights Agreement, the Rights shall not be
exercisable after the first occurrence of a Stock Acquisition Date until such
time as the Company's right of redemption hereunder has expired.
(c) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if such redemption is subject to
conditions, immediately upon satisfaction of such conditions), evidence of which
shall have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly (but, in any event, within ten days)
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent and
the holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than as specifically set forth in this Section 23,
and other than in connection with the purchase, acquisition or redemption of
Common Stock prior to the Distribution Date.
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 securities of the Company
of any class to the holders of its shares of Preferred Stock or to make any
other distribution to the holders of shares of Preferred Stock (other than a
regular periodic cash dividend), or (ii) to offer to the holders of its shares
of Preferred Stock rights, options or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or securities convertible into shares
of Preferred Stock, or (iii) to effect any reclassification of its shares of
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, to the extent feasible and in accordance
with Section 25, a notice of such proposed action, which notice shall specify
the record date for the purposes of such share 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 Common 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), (ii) or (v) above at least 20 days prior to the record
date for determining holders of Preferred Stock for purposes of such action, and
in the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Preferred Stock, whichever shall be the earlier. The failure to give
notice required by this Section 24 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
(b) Notwithstanding anything in this Rights Agreement to the contrary,
prior to the Distribution Date a filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this Rights
Agreement and no other notice need be given.
SECTION 25. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agents or by the holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock) to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address if filed in writing with the
Rights Agent) as follows:
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<PAGE> 28
Century Casinos, Inc.
999 18th Street, Suite 1810
Denver, Colorado 80202
Attention: Chairman
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
any Right Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows
American Securities Transfer & Trust, Inc.
938 Quail
Lakewood, Colorado 80215
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate representing
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,
the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Rights Agreement (including, without
limitation, the date on which the Distribution Date shall occur, the definition
of Acquiring Person, the time during which the Rights may be redeemed or any
provision of the Certificate of Designation) without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the third to last sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Rights Agreement without the approval of any holders of Rights
Certificates in order (a) to cure any ambiguity, (b) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (c) to shorten or lengthen any time period hereunder or
(d) to change or supplement the provisions hereof in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificate (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); PROVIDED, HOWEVER, that
this Rights Agreement may not be supplemented or amended to lengthen, pursuant
to clause (c) of this sentence, (i) a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable or (ii) any
other time period unless such lengthening is for the purposes 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 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. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
SECTION 27. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after a Stock Acquisition Date (and, if the Distribution Date has not then
occurred, after the Distribution Date), mandatorily exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
shall have become null and void and nontransferable pursuant to the provisions
of Section 11(a)(iii) hereof) for consideration per Right consisting of one-half
of the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) (the consideration issuable per Right
pursuant to this Section 27 being the "Exchange Consideration"). The Board of
Directors of the Company may, at its option, issue, in substitution for
Preferred Stock, shares of Common Stock in an amount per whole share of
Preferred Stock equal to the Formula Number (as defined in the Certificate of
Designation) if there are sufficient shares of Common Stock issued but not
outstanding or authorized but unissued. If the Board of Directors of the Company
elects to exchange all the Rights for Exchange Consideration pursuant to this
Section 27 prior to the physical distribution of the Rights Certificates, the
Company may distribute the Exchange Consideration
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<PAGE> 29
in lieu of distributing Right Certificates, in which case for purposes of this
Rights Agreement holders of Rights shall be deemed to have simultaneously
received and surrendered for exchange Rights Certificates on the date of such
distribution. Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than an
Exempt Person), which, together with all Affiliates and Associates of such
Person, becomes the beneficial owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to Section 27(a) hereof, and without any further
action and without any notice, the right to exercise such Right shall terminate
and the only right with respect to such Rights thereafter of the holder of such
Rights shall be to receive the Exchange Consideration. Promptly after the action
of Board of Directors ordering the exchange of any Rights pursuant to Section
27(a) hereof, the Company shall publicly announce such action, and within ten
calendar days thereafter shall give 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; PROVIDED, HOWEVER, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. 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 the Rights for the Exchange
Consideration 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 null
and void pursuant to the provisions of Section 11(a)(iii) hereof) held by each
holder of Rights.
SECTION 28. SUCCESSORS. All the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Rights Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. Except as explicitly otherwise provided
herein, the Board of Directors of the Company shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors or to the Company, or as
may be necessary or advisable in the administration of this Rights Agreement,
including without limitation, the right and power to (a) interpret the
provisions of this Rights Agreement and (b) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Rights Agreement and a determination of whether there is an Acquiring Person).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (ii) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors in good faith, shall (i) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties, and (ii) not subject the Board of Directors to
any liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
-26-
<PAGE> 30
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 32. GOVERNING LAW. THIS RIGHTS AGREEMENT, EACH RIGHT AND EACH
RIGHT CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO
BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
SECTION 33. COUNTERPARTS; EFFECTIVENESS. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument. This Rights Agreement shall be
effective as of the close of business on the date hereof.
SECTION 34. DESCRIPTIVE HEADINGS. The captions herein are included for
convenience of reference only, do not constitute a part of this Rights Agreement
and shall be ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the date and year first above written.
CENTURY CASINOS, INC.
By: /S/ ERWIN HAITZMANN
-------------------------------------
Erwin Haitzmann, Chairman
Attest:
/S/ NORBERT TEUFELBERGER
- ----------------------------------
Norbert Teufelberger, Secretary
AMERICAN SECURITIES TRANSFER & TRUST, INC.
as Rights Agent
By: /S/ LAURA SISNEROS
-------------------------------------
Name Laura Sisneros
And Title: Vice-President/Trust Officer
--------------------------------
Attest:
/S/ KATHLEEN HEAGERTY
- ----------------------------------
Name
And Title: Operations Manager
------------------------
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<PAGE> 31
EXHIBIT A
CERTIFICATE OF DESIGNATION OF
RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES A PREFERRED STOCK
OF
CENTURY CASINOS, INC.
Pursuant to Section 151 of the Delaware General Corporation law:
The undersigned hereby certifies that the following resolution has been adopted
by the Board of Directors of Century Casinos, Inc., a Delaware corporation (the
"Corporation") as required by Section 151 of the Delaware General Corporation
Law, pursuant to an action by unanimous written consent, dated April 29, 1999;
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Corporation in accordance
with the provisions of its Certificate of Incorporation, the
Board of Directors hereby creates a series of Preferred Stock,
par value $ .01 per share, of the Corporation and hereby
states the designation and number of shares, and fixes the
relative rights, preferences and limitations thereof (in
addition to the provisions set forth in the Certificate of
Incorporation of the Corporation, which are applicable to the
Preferred Stock of all classes and series), as follows:
Series A Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock shall be
1,000,000 shares of Series A Preferred Stock and shall have a par value of $0.01
per share. Such number of shares may be increased or decreased by resolution of
the Board of Directors; PROVIDED, that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, cash dividends in an
amount per whole share (rounded to the nearest cent) equal to the Formula Number
(as defined below) then in effect times the aggregate per share amount of all
cash dividends declared or paid on the Common Stock. In addition, if the
Corporation shall pay any dividend or make any distribution on the Common Stock
payable in assets, securities or other forms of noncash consideration (other
than dividends or distributions solely in shares of Common Stock), then, in each
such case, the Corporation shall simultaneously pay or make on each whole
outstanding share of Series A Preferred Stock, a dividend or distribution in
like kind equal to the Formula Number then in effect times such dividend or
distribution on each share of the Common Stock. As used herein, the "Formula
Number" shall be 100; PROVIDED, HOWEVER, that if at any time after May 13, 1999,
the Corporation shall (i) declare or pay any dividend or make any distribution
on the Common Stock, payable in shares of Common Stock, (ii) subdivide (by a
stock split or otherwise), the outstanding shares of Common Stock into a larger
number of shares of Common Stock, or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares of
A-1
<PAGE> 32
Common Stock, then in each such case the Formula Number in effect
immediately prior to such event shall be adjusted to a number determined by
multiplying the Formula Number then in effect 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 (and rounding the result to the
nearest whole number); and provided further, that, if at any time after May 13,
1999, the Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then in
each such event the Formula Number shall be appropriately adjusted to reflect
such merger, reclassification, or change so that each share or Series A
Preferred Stock continues to be the economic equivalent of a Formula Number of
shares of Common Stock prior to such merger, reclassification or change.
(b) The Corporation shall declare each dividend immediately prior to or
at the same time it declares any cash or non-cash dividend or distribution on
the Common Stock in respect of which a dividend is required to be paid. No cash
or non-cash dividend or distribution on the Common Stock in respect of which a
dividend is required shall be paid or set aside for payment on the Common Stock
unless a dividend in respect of such dividend shall have been paid.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied by the
maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein, in any other Certificate of
Amendment creating a series of Preferred Stock or any similar stock, or by law,
the holders of shares of Series A Preferred Stock and the holders of 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) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever dividends are in arrears or the Corporation shall be in
default in payment thereof, thereafter and until all declared and unpaid
dividends on shares of Series A Preferred Stock outstanding shall have been paid
or set aside for payment in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions
on or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on the shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior or on a parity (either as to
dividends or upon liquidation, dissolution or winding up) to or with the Series
A Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire
A-2
<PAGE> 33
shares of any such junior or 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) redeem or purchase or otherwise acquire for consideration
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Restated Certificate of Incorporation, or in any other Certificate of Amendment
or Certificate of Designation creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to the declared and unpaid
dividends and distributions thereon to the date of such payment, plus an amount
equal to the greater of (i) $0.01 per whole share, or (ii) an aggregate amount
per share equal to the Formula Number then in effect times the aggregate amount
to be distributed per share to holders of Common Stock, or (b) to the holders of
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, unless
simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of Series A Preferred Stock shares are entitled under clause
(a)(i) of this sentence and to which the holders of such parity shares are
entitled in each case upon such liquidation, dissolution or winding up.
Section 7. CONSOLIDATION, MERGER, ETC. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share equal to the Formula Number then in effect
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event that both this Section 7 and
Section 2 appear to apply to a transaction, this Section 7 shall control.
Section 8. EFFECTIVE TIME OF ADJUSTMENTS.
(a) Adjustments to the Series A Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event requiring
such adjustments occurs.
(b) The Corporation shall give prompt written notice to each holder of
a share of Series A Preferred Stock of the effect on any such shares of any
adjustment to the dividend rights or rights upon liquidation, dissolution or
winding up of the Corporation required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Corporation to give such notice shall
not affect the validity of or the force or effect of or the requirement for such
adjustment.
A-3
<PAGE> 34
Section 9. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.
Section 10. RANK. Unless otherwise provided in the Restated Certificate
of Incorporation or a Certificate of Designation relating to a subsequent series
of Preferred Stock of the Corporation, the Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets, junior
to all series of any other class of the Corporation's Preferred Stock.
Section 11. FRACTIONAL SHARES. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredths (1/100ths)
of a share or any integral multiple of such fraction which shall entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series A Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
one-hundredths (1/100ths) of a share or any integral multiple thereof, or (2) to
issue depository receipts evidencing such authorized fraction of a share of
Series A Preferred Stock pursuant to an appropriate agreement between the
Corporation and a depository selected by the Corporation; provided that such
agreement shall provide that the holders of such depository receipts shall have
the rights, privileges and preferences to which they are entitled as holders of
the Series A Preferred Stock.
Section 12. AMENDMENT. The Restated Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, CENTURY CASINOS, INC. has caused this Certificate
to be signed this 29th day of April 1999.
/S/ NORBERT TEUFELBERGER
---------------------------------------------
Norbert Teufelberger, Chief Financial Officer
A-4
<PAGE> 35
EXHIBIT B
FORM OF RIGHT CERTIFICATE
CERTIFICATE NO. ____________ ____________ RIGHTS
NOT EXERCISABLE AFTER APRIL 29, 2009 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID AND NON-TRANSFERABLE.
RIGHT CERTIFICATE
CENTURY CASINOS, INC.
This certifies that __________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of April 29, 1999 (the "Rights
Agreement") between Century Casinos, Inc., a Delaware corporation (the
"Company"), and American Securities Transfer & Trust, Inc., as Rights Agent (the
"Rights Agent"), unless the rights evidenced hereby shall have been previously
redeemed by the Company, to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 p.m. Denver, Colorado time on April 29, 2009, at the principal office or
offices of the Rights Agent designated for such purpose, or at the office of its
successor as Rights Agent or its successors as Rights Agent, one one-hundredth
(1/100th) of a fully paid and non-assessable share of Series A Preferred Stock,
par value $0.01 per share (the "Preferred Stock") of the Company, at a cash
purchase price of $4.00 per one one-hundredth (1/100th) of a share of Preferred
Stock, as the same may from time to time be adjusted in accordance with the
Rights Agreement (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the form of election to purchase and the related
certificate duly executed. The number of Rights evidenced by this Right
Certificate (and the number of fractional shares of Preferred Stock which may be
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of __________, ____, based on
the shares of Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events, and in certain circumstances
may be exercised to purchase securities other than shares of Preferred Stock or
securities of issuers other than the Company.
If the Rights evidenced by this Rights Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the office of the Company and the
Rights Agent and are also available free of charge upon written request mailed
to the Rights Agent at:
B-1
<PAGE> 36
American Securities Transfer & Trust, Inc.
938 Quail
Lakewood, Colorado 80215
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate may be redeemed by the Board of Directors at a
redemption price of $.001 per Right (payable in cash or other consideration)
appropriately adjusted as provided in the Rights Agreement at any time prior to
the earlier to occur of (i) 10 business days after a Stock Acquisition Date (as
defined in the Rights Agreement), and (ii) the Final Expiration Date.
No fractional shares of Preferred Stock (other than integral multiples
of one one-hundredth (1/100th) of a share, which may, at the election of the
Company, be evidenced by depositary receipts) will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or 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 Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ______________, _______
CENTURY CASINOS, INC.
By:
- -------------------------------------- ----------------------------
Norbert Teufelberger, Secretary Erwin Haitzmann, Chairman
Countersigned:
AMERICAN SECURITIES TRANSFER & TRUST, INC.
as Rights Agent
By:
--------------------------------------
Name and Title:
---------------------------
B-2
<PAGE> 37
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the
Right Certificate.)
To: CENTURY CASINOS, INC.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase one one-hundredth (1/100th) of
a share of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other Person which may be issuable
upon the exercise of the Rights) and requests that certificates for such
securities be issued in the name of and delivered to:
Please insert social security
or other identifying number
- -----------------------------------------
(Please print name and address)
- -----------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
OPTIONAL ELECTION TO EXERCISE WITHOUT PAYMENT OF CASH:
- -----------------------------------------
(Please print name and address)
- -----------------------------------------
With respect to the exercise of ______________ of the Rights specified
above, the undersigned hereby elects to exercise such Rights without payment of
cash and to receive a number of one one-hundredths (1/100ths) of a share of
Preferred Stock or other securities having a value (as determined pursuant to
the Rights Agreement) equal to the difference between (i) the value of the
Preferred Stock or other securities that would have been issuable upon exercise
thereof upon payment of the Purchase Price as provided in the Rights Agreement,
and (ii) the amount of such Purchase Price.
Dated: ,
-------------------- ----
-----------------------------
Signature
Medallion Guaranteed:
B-3
<PAGE> 38
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
1. the Rights evidenced by this Right Certificate ____are ____are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it
____did ____did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ,
-------------------- ----
------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate)
FOR VALUE RECEIVED _________________________________________ hereby
sells, assigns and transfers unto:
----------------------------------------
(Please print name and address of transferee)
---------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________________
Attorney, to transfer the within Right Certificate on the books of Century
Casinos, Inc. with full power of substitution.
Dated: ,
-------------------- ----
------------------------------
Signature
Medallion Guaranteed:
B-4
<PAGE> 39
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
1. the Rights evidenced by this Right Certificate ____are ____are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it
____did ____did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
-------------------- ----
------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE> 40
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
DISTRIBUTION OF RIGHTS: On April 29, 1999, the Board of Directors of
Century Casinos, Inc., a Delaware corporation (the "Company") authorized and
declared a dividend of one right (a "Right") for each issued and outstanding
share of the Common Stock, par value $0.01 per share (the "Common Stock") of the
Company. The dividend is payable to the stockholders of record on May 13, 1999
(the "Record Date"). All Rights are issued pursuant to, and will be subject to
the terms and conditions of, the Rights Agreement between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent, dated as of April
29, 1999. The following is a brief summary of the terms of the Rights.
Each Right, when exercisable, will entitle the registered holder
thereof to purchase from the Company one or more one-hundredths (1/100th) of a
share of non-redeemable Series A Preferred Stock, par value $0.01 per share, of
the Company (the "Preferred Stock") at an exercise price of $4.00 per Right (the
"Purchase Price"), subject to certain adjustments.
The terms of each one one-hundredth of a share of Preferred Stock will
be equivalent to those of a share of the Company's Common Stock. Each one
one-hundredth of a share of Preferred Stock will have the same voting rights as
a share of Common Stock. Each one one-hundredth (1/100th) of a share of
Preferred Stock will be entitled to dividends per one one-hundredth (1/100th) of
a share equal to dividends which may from time to time be declared on a share of
Common Stock. In the event of liquidation or merger, the Preferred Stock holders
will be entitled to a priority return which will result in the one one-hundredth
(1/100th) of a share of Preferred Stock being treated identically to a share of
Common Stock. These rights are protected by customary anti-dilution provisions.
EXERCISE OF RIGHTS: The Rights initially will be represented by the
certificates evidencing the Common Stock and will not be exercisable, or
transferable apart from the Common Stock, until the earliest to occur of:
(i) the twentieth day after the acquisition by a person or
group of affiliated or associated persons (other than an Exempt Person)
of beneficial ownership of 20% (or 15%, if the Board determines that
such person or group ("Adverse Person") intends to take actions which
would be detrimental to the long-term interests of the Company or its
stockholders or that such ownership would be detrimental to the Company
in other respects) or more of the outstanding Common Stock; PROVIDED,
that if within said 20-day period the Acquiring Person reduces his
beneficial ownership to less than 20% (or 15% for an Adverse Person),
then he shall be deemed not to be an Acquiring Person and the Stock
Acquisition Date (as defined below) shall be deemed not to have
occurred;
(ii) the twentieth day after the commencement of a tender or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of affiliated or associated persons of
20% or more of the outstanding Common Stock; PROVIDED, that if within
said 20-day period the person withdraws the tender or exchange offer,
then such offer shall be deemed not to have been made; and
(iii) the twentieth day after the date of filing of a
registration statement for any such exchange offer under the Securities
Act of 1933, as amended.
Under the Rights Agreement, any of the above three dates, under (i),
(ii) or (iii), is a "Distribution Date." Any person or group described in item
(i) above is referred to as an "Acquiring Person," and the date upon which a
person or group first becomes an Acquiring Person is referred to as the "Stock
Acquisition
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<PAGE> 41
Date." An "Exempt Person" is defined as the Company, a subsidiary of the
company, an employee benefit plan of the Company, or any of its subsidiaries.
The Rights (unless sooner redeemed) will first become exercisable on
the Distribution Date, at which time the Company will distribute separate Right
Certificates representing the Rights to its then current stockholders, and it is
expected that the Rights could then begin trading separately from the Common
Stock. The Rights will expire on April 29, 2009, unless this date is extended or
unless the Rights are earlier redeemed or exchanged by the Company.
ANTI-TAKEOVER PROVISIONS: Following the Distribution Date, each Right
initially would give holders (other than the Acquiring Person, its affiliates
and transferees) the right to purchase, for the Purchase Price, one
one-hundredth (1/100th) of a share of Preferred Stock. On a Stock Acquisition
Date which follows the commencement of a tender offer or an exchange offer, or
on the Distribution Date with respect to any other Stock Acquisition Date, the
Rights would give holders (other than the Acquiring Person, its affiliates and
transferees) the right to purchase from the Company, for the Purchase Price,
that number of one one-hundredths (1/100ths) of a share of Preferred Stock
having a market value of twice the Purchase Price. Alternatively, before an
Acquiring Person acquires 50% of the outstanding Common Stock, the Board of
Directors may exchange each Right, except for the Rights held by the Acquiring
Person, in whole or in part, for half of the number of one one-hundredths of a
share of the Preferred Stock or shares of the Common Stock which the holders
could otherwise purchase by exercising the Rights.
Further, in a merger, consolidation or sale or transfer of 50% or more
of the consolidated assets or earning power of the Company occurring after the
Rights become exercisable, each Right will be converted into the right to
purchase, for the Purchase Price, that number of shares of common stock of the
surviving entity or (in certain circumstances) its parent corporation, which at
the time of such transaction will have a market value of two times the Purchase
Price of the Right.
Following the Distribution Date, exercisable Rights may be exercised,
at the option of the holder thereof, without the payment of the Purchase Price
in cash. In any such case, the holder would receive a number of one
one-hundredths (1/100ths) of a share of Preferred Stock having a value equal to
the difference between the value of the Preferred Stock that would have been
issuable upon payment of the Purchase Price and the Purchase Price.
AMENDMENT OF PLAN: The Board may amend the Rights Agreement in any and
all respects and particulars at any time before a Distribution Date. Afterwards
the Board may amend the Rights Agreement only to eliminate ambiguities or to
provide additional benefits to the holders of the Rights (other than any
Acquiring Person).
REDEMPTION OF RIGHTS: At any time prior before the date which is twenty
days after the Stock Acquisition Date, the Board may redeem the outstanding
Rights at a price of $.001 per Right. If during the 20-day period the Acquiring
Person reduces its beneficial ownership to less than 20%, the Rights will again
be redeemable. Subsequent to 20 days following the Stock Acquisition Date, the
Rights are not redeemable.
VOTING OR DIVIDEND RIGHTS: 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.
EFFECT OF RIGHTS: The Rights have certain anti-takeover effects. The
Rights may cause substantial dilution to a person or group that attempts to
acquire the Company on terms not approved by the Board of Directors of the
Company. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors prior to the time that holders of
the Rights become entitled to exercise their Rights for Preferred Stock (or
common stock of the surviving entity in a merger with the Company), since until
that time the Rights may be redeemed by the Board of Directors of the Company at
$.001 per Right.
EXPIRATION OF RIGHTS: The Rights will expire on April 29, 2009, unless
earlier redeemed by the Company.
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