<PAGE> 1
As filed with the Securities and Exchange Commission on September 24, 1997
_______________________________________________________________________________
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
__________________
FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of registrant as specified in its Charter)
__________________
MARYLAND 36-3935116
(State of incorporation or organization) (I.R.S. Employer Identification No.)
__________________
311 S. WACKER DRIVE
CHICAGO, ILLINOIS 60606
(Address, including zip code, of principal executive offices)
__________________
Securities to be registered pursuant to Section 12(b) of the Act:
PREFERRED SHARE PURCHASE RIGHTS
(Title of Class)
Name of Exchange on which securities are to be registered:
NEW YORK STOCK EXCHANGE
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On September 4, 1997, the Board of Directors of First Industrial Realty
Trust, Inc. (the "Company") declared, subject to the receipt of certain
regulatory clearances, a dividend distribution of one Right for each
outstanding share of Common Stock, $0.01 par value (the "Common Stock"), of
the Company. The distribution is payable on October 20, 1997 to stockholders
of record as of the close of business on October 19, 1997 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Junior Participating Preferred Stock (the
"Preferred Stock"), at a price of $125 per one one-hundredth of a share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent"), dated September 16, 1997.
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten calendar days following the date
(the "Shares Acquisition Date") of public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") acquired, or
obtained the right to acquire, beneficial ownership of Common Stock or other
voting securities ("Voting Stock") that have 15% or more of the voting power of
the outstanding shares of Voting Stock or (ii) ten calendar days (or such later
date as may be determined by action of the Board of Directors prior to the time
any person or group of affiliated persons becomes an Acquiring Person)
following the commencement or announcement of an intention to make a tender
offer or exchange offer, the consummation of which would result in such person
acquiring, or obtaining the right to acquire, beneficial ownership of Voting
Stock having 15% or more of the voting power of the outstanding shares of
Voting Stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificates. Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of the Company's Common Stock will contain a notation
incorporating the Rights Agreement by reference. The Rights Agreement provides
that, until the Distribution Date, the Rights will be transferred with and only
with the Company's Common Stock and the surrender for transfer of any of the
Company's Common Stock certificates outstanding will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of the close of business on
the Distribution Date and such separate Right Certificates alone will evidence
the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on October 19, 2007, unless earlier
redeemed or exchanged by the Company as described below.
2
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Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Purchase Price of the Right.
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares of Preferred Stock
(or Common Stock or other securities, as the case may be) issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for shares of
the Preferred Stock or convertible securities at less than the current market
price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued (other than fractional shares which are integral
multiples of one one-hundredth of a share of Preferred Stock") and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time after the occurrence of the event set forth under the heading
"Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the Independent Directors) may
exchange the Rights (other than Rights owned by the Acquiring Person which
shall have become void), in whole or in part, at
3
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an exchange ratio of one share of Common Stock (or a fraction of a share
of Preferred Stock having the same market value) per Right (subject to
adjustment).
At any time prior to 5:00 P.M. New York City time or the tenth calendar
day following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require that there be Independent Directors in office and that a
majority of the Independent Directors concur in such decision. Immediately
upon the action of the Board of Directors of the Company electing to redeem the
Rights with, if required, the concurrence of the Independent Directors, the
Company shall make announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised or exchanged, 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.
Terms of the Preferred Stock
The Preferred Stock will rank junior to all other series of the Company's
preferred stock with respect to payment of dividends and as to distributions of
assets in liquidation. Each share of Preferred Stock will have a quarterly
dividend rate per share equal to the greater of $1.00 or 100 times the per
share amount of any dividend (other than a dividend payable in shares of Common
Stock or a subdivision of the Common Stock) declared from time to time on the
Common Stock, subject to certain adjustments. The Preferred Stock will not be
redeemable. In the event of liquidation, the holders of the Preferred Stock
will be entitled to receive a preferred liquidation payment per share of $1.00
(plus accrued and unpaid dividends) or, if greater, an amount equal to 100
times the payment to be made per share of Common Stock, subject to certain
adjustments. Generally, each share of Preferred Stock will vote together with
the Common Stock and any other series of cumulative preferred stock entitled to
vote in such manner and will be entitled to 100 votes, subject to certain
adjustments. In the event of any merger, consolidation, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or other property, each share of Preferred
Stock will be entitled to receive 100 times the aggregate amount of stock,
securities, cash and/or other property, into which or for which each share of
Common Stock is changed or exchanged, subject to certain adjustments. The
foregoing dividend, voting and liquidation rights of the Preferred Stock are
protected against dilution in the event that additional shares of Common Stock
are issued pursuant to a stock split or stock dividend or distribution.
Because of the nature of the Preferred Stock's dividend, voting, liquidation
and other rights, the value of the one one-hundredth of a share of Preferred
Stock purchasable with each Rights is intended to approximate the value of one
share of Common Stock.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the Board
of
4
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Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board (in certain circumstances, with the concurrence of the Independent
Directors) in order to cure any ambiguity, defect or inconsistency, or to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person); provided, however, that no
supplement or amendment may be made after the Distribution Date which changes
those provisions relating to the principal economic terms of the Rights.
The term "Independent Directors" means any member of the Board of
Directors of the Company who either (i) was a member of the Board on the date
of the Rights Agreement or (ii) is subsequently elected to the Board if such
person is recommended or approved by a majority of the Independent Directors,
but shall not include an Acquiring Person, or an affiliate or associate of an
Acquiring Person, or any representative of the foregoing entities.
A copy of the Rights Agreement is filed herewith as Exhibit 99.1. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such Exhibit, which is hereby
incorporated herein by reference.
5
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ITEM 2. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<S> <C>
99.1 Rights Agreement between First Industrial Realty Trust, Inc. and
First Chicago Trust Company of New York, dated September 16, 1997
</TABLE>
6
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly cause this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized.
September 18, 1997 FIRST INDUSTRIAL REALTY TRUST, INC.
(Registrant)
By: /s/ Michael J. Havala
-----------------------
Michael J. Havala
Chief Financial Officer
7
<PAGE> 1
EX-99.1
===============================================================================
FIRST INDUSTRIAL REALTY TRUST, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent
RIGHTS AGREEMENT
Dated as of
September 16, 1997
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
Page
----
<S> <C> <C>
Section 1. Certain Definitions......................................... 1
Section 2. Appointment of Rights Agent................................. 7
Section 3. Issue of Right Certificates................................. 7
Section 4. Form of Right Certificates.................................. 10
Section 5. Countersignature and Registration........................... 11
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.............................................. 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights................................................. 13
Section 8. Cancellation and Destruction of Right Certificates.......... 16
Section 9. Reservation and Availability of Shares of Capital Stock..... 16
Section 10. Preferred Stock Record Date................................. 18
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights................................................. 19
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.. 29
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power............................................. 30
Section 14. Fractional Rights and Fractional Shares..................... 33
Section 15. Rights of Action............................................ 34
Section 16. Agreement of Right Holders.................................. 35
</TABLE>
-i-
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<TABLE>
Page
----
<S> <C> <C>
Section 17. Right Certificate Holder Not Deemed a Stockholder.......... 36
Section 18. Concerning the Rights Agent................................ 36
Section 19. Merger or Consolidation or Change of Name of Rights Agent.. 37
Section 20. Duties of Rights Agent..................................... 38
Section 21. Change of Rights Agent..................................... 41
Section 22. Issuance of New Right Certificates......................... 42
Section 23. Redemption and Termination................................. 42
Section 24. Exchange................................................... 44
Section 25. Notice of Certain Events................................... 45
Section 26. Notices.................................................... 46
Section 27. Supplements and Amendments................................. 47
Section 28. Successors................................................. 48
Section 29. Determinations and Actions by the Board of Directors....... 48
Section 30. Benefits of this Agreement................................. 49
Section 31. Severability............................................... 49
Section 32. Governing Law.............................................. 49
Section 33. Counterparts............................................... 50
Section 34. Descriptive Headings....................................... 50
EXHIBIT A Articles Supplementary, Description and Certain Terms
of Participating Preferred Stock......................... A-1
EXHIBIT B Form of Right Certificate.................................. B-1
EXHIBIT C Summary of Rights to Purchase Preferred Stock.............. C-1
</TABLE>
-ii-
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RIGHTS AGREEMENT
Rights Agreement, dated as of September 16, 1997 between First
Industrial Realty Trust, Inc., a Maryland corporation (the "Company"), and
First Chicago Trust Company of New York, a New York corporation (the "Rights
Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company on September 4, 1997
(the "Rights Dividend Declaration Date") authorized and declared a dividend
distribution (the "Distribution") of one Right for each outstanding share of
the Common Stock, $0.01 par value, of the Company (the "Common Stock")
outstanding at the close of business on October 19, 1997 (the "Record Date")
and has authorized and directed the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) in
respect of each share of Common Stock issued (whether originally issued or
delivered from the Company's treasury stock) between the Record Date and the
earlier of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined), each Right initially representing the right to purchase,
under certain circumstances, one one-hundredth of a share of Junior
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the Articles Supplementary attached hereto as Exhibit
A, upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of securities of the Company constituting a
Substantial Block (as such term is hereinafter defined), but shall not
include (i) the Company, any Sub-
<PAGE> 5
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sidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any Person organized, appointed or
established by the Company or any Subsidiary of the Company for or
pursuant to the terms of any such plan, (ii) any Person who or which,
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of a Substantial Block solely as a result of a change in
the aggregate number of shares of Voting Stock outstanding since the last
date on which such Person acquired Beneficial Ownership of any shares of
the Voting Stock constituting all or a portion of such Substantial Block;
and (iii) any Person who or which, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of a Substantial
Block in the good faith belief that such acquisition would not (x) cause
such Person and its Affiliates and Associates to become the Beneficial
Owner of a Substantial Block and such Person relied in good faith in
computing the percentage of its voting power on publicly filed reports or
documents of the Company which are inaccurate or out-of-date or (y)
otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a) to occur. Notwithstanding clause (ii) or (iii) of the
prior sentence, if any Person that is not an Acquiring Person due to such
clause (ii) or (iii) does not cease to be the Beneficial Owner of a
Substantial Block 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 is the Beneficial Owner of a Substantial Block, such
Person shall, at the end of such five Business Day period, become an
Acquiring Person (and such clause (ii) or (iii) 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 of the Company, acting by a vote of those directors of
the Company whose approval would be required to redeem the Rights under
Section 23.
(b) "Act" shall have the meaning set forth in Section 9(c) hereof.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "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 Ex-
<PAGE> 6
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change Act of 1934, as amended (the "Exchange Act"), as in effect on
the date hereof.
(e) "Agreement" shall have the meaning set forth in the
introduction hereto.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to acquire
(whether such right is exercisable immediately or only after the
passage of time or upon the occurrence of an event) pursuant to any
agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise, provided,
however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," (1) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, (2) securities issuable upon
exercise of Rights at any time prior to the occurrence of a
Triggering Event or (3) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering Event, which Rights
were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section
3(a) hereof ("Original Rights") or pursuant to Section 11(i) or
Section 22 hereof in connection with an adjustment made with
respect to Original Rights; or
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), 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," any security under this subparagraph (ii) if
the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy given in response to a
public proxy or consent
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solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not
then reportable 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 with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this paragraph
(f)) or disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition shall
cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired in a bona fide firm commitment underwriting pursuant
to an underwriting agreement with the Company.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(h) "Certification" shall have the meaning set forth in Section 18
hereof.
(i) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date, provided, however, if such date is not a
Business Day it shall mean 5:00 P.M. on the next succeeding Business Day.
(j) "Common Stock" when used with reference to the Company shall
mean the Common Stock, $0.01 par value, of the Company. "Common Stock"
when used with reference to any Person other than the Company shall mean
either the capital stock with the greatest voting power of such other
Person or, if such Person is a Subsidiary of another Person, the equity
securities or other equity interest having power to control or direct the
management of such Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
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(l) "Company" shall have the meaning set forth in the introduction
hereto.
(m) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(o) "Distribution" shall have the meaning set forth in the recitals
hereto.
(p) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(q) "Equivalent Preferred Stock" shall have the meaning set forth
in Section 11(b) hereof.
(r) "Exchange Act" shall have the meaning set forth in the
definitions of "Affiliate" and "Associate" above.
(s) "Exchange Ratio" shall have the meaning set forth in Section
24(a) hereof.
(t) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(u) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(v) "Independent Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the Board, who
is not an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of any
such Affiliate or Associate and either (i) was a member of the Board on
the date hereof, or (ii) was recommended or elected to succeed the
Independent Director by a majority of the Independent Directors.
(w) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
(x) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
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(y) "Preferred Stock" shall mean the shares of Junior Participating
Preferred Stock, par value $0.01 per share, of the Company.
(z) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(aa) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(bb) "Record Date" shall have the meaning set forth in the recitals
hereto.
(cc) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(dd) "Rights" shall have the meaning set forth in the recitals
hereto.
(ee) "Rights Agent" shall have the meaning set forth in the
introduction hereto.
(ff) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(gg) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals hereto.
(hh) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(jj) "Section 13 Event" shall mean any event described in Section
13(a) hereof.
(kk) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, includes a report
filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(ll) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(mm) "Subsidiary" shall mean, with reference to any Person, any
corporation (or other entity) of which an
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amount of voting securities (or comparable ownership interests)
sufficient to elect at least a majority of the directors (or comparable
individuals) of such corporation (or other entity) is beneficially owned
or otherwise controlled, directly or indirectly, by such Person.
(nn) "Substantial Block" shall mean a number of shares of the
Voting Stock which has 15% or more of the aggregate voting power of all
outstanding shares of Voting Stock.
(oo) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(pp) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(qq) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(rr) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
(ss) "Voting Stock" shall mean the outstanding shares of Common
Stock, $0.01 par value, and any other shares of capital stock of the
Company which are entitled to vote generally in the election of
directors.
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 shall act as Co-Rights Agent and may from time to
time appoint such other Co-Rights Agents as it may deem necessary or desirable
upon ten calendar days' written notice to the Rights Agent. In no event shall
the Rights Agent have any duty to supervise or in any way be liable for such
Co-Rights Agents.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the close of business on the tenth calendar day after the Shares Acquisition
Date (or, if the tenth calendar day after the Shares Acquisition Date occurs
before the Record Date, the close of business on the Record Date) or (ii) the
close of business on the tenth calendar day (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement of, or first
public announcement of the intent of any Person (other than the Company,
<PAGE> 11
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any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company or any Person organized, appointed or established
by the Company or any Subsidiary of the Company or any Person organized,
appointed or established by the Company or any Subsidiary of the Company for
or pursuant to the terms of such plan) to commence, a tender or exchange offer
if, upon consummation thereof, such Person would be an Acquiring Person
(the earlier of the dates in subsections (i) and (ii) hereof being herein
referred to as the "Distribution Date") (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for the Common Stock shall be deemed also to
be Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection
with the transfer of Common Stock. As soon as practicable after receipt by the
Rights Agent of written notice from the Company of the Distribution Date, the
Rights Agent, at the Company's expense, will send by first-class, postage
prepaid mail, to each record holder of Common Stock as of the close of business
on the Distribution Date, at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit B
hereto, evidencing one Right for each share of the Common Stock so held,
subject to adjustment as provided herein. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common Stock as
of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for Common Stock, and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any of the
certificates for Common Stock outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock
issued after the Record Date but prior to the
<PAGE> 12
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earlier of the Distribution Date or the Expiration Date (as such term is
defined in Section 7), or, in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates representing such shares of
Common Stock 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 First Industrial Realty
Trust, Inc. and First Chicago Trust Company of New York (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 First Industrial Realty Trust, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by
this certificate. First Industrial Realty Trust, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement as in effect on
the date of mailing without charge within five Business Days after
receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights beneficially owned by an Acquiring
Person may become null and void.
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Common Stock represented
by certificates containing the foregoing legend 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 certificate. In the event that the Company purchases
or acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer
outstanding. The failure to print the foregoing legend on any such Common
Stock certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
<PAGE> 13
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Section 4. Form of Right Certificates. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage. The Right
Certificates shall be in machine-printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates, whenever distributed, shall be dated
as of the Record Date, shall show the date of countersignature, and on their
face shall entitle the holders thereof to purchase such number of shares of
Preferred Stock (or following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as shall be set forth
therein at the price per one one-hundredth of a share of Preferred Stock set
forth therein (the "Purchase Price"), but the number of such shares and the
Purchase Price shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, (i) any
Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (x) an Acquiring Person or any
Associate or Affiliate thereof, (y) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became such, or (z) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding (whether or not in writing) which
has as a primary purpose or effect avoidance of Section 7(e) hereof, (ii) any
Right Certificate issued at any time to any nominee of such Acquiring Person,
Associate or Affiliate, and (iii) any Right Certificate issued pursuant to
Section 6 or Section 11 hereof, upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred
<PAGE> 14
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to in this sentence, shall contain (to the extent feasible following the
written instruction of the Company to the Rights Agent) the following legend,
modified as applicable to apply to such Person:
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 an Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented may become null
and void in the circumstances specified in Section 7(e) of the
Rights Agreement.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by one of its authorized officers
either manually or by facsimile signature. The Right Certificates shall be
countersigned by an authorized signatory of the Rights Agent either manually or
by facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, issued and delivered with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such person
was not such an officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though
the person who countersigned such Right Certificates not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such a signatory.
<PAGE> 15
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Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose, 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 and the date of countersignature
of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of shares of Preferred Stock (or following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose, along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence, as the
Company shall reasonably request, of the identity of the Beneficial Owner,
Affiliates or Associates thereof or of the holder, or of any other Person with
which such holder or any of such holder's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of securities of the
Company. Thereupon the Rights Agent shall, subject to Section 4(b), Section
7(e), Section 14 and Section 20(k) 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 from
<PAGE> 16
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a Right Certificate 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.
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, along with a signature
guarantee and such other further documentation as the Rights Agent may
reasonably request 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
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Sections 9(c), 11(a)(iii), 23(b) and 24(b) hereof)
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 designated office of the
Rights Agent, together with payment of the aggregate Purchase Price for the
total number of one one-hundredths of shares of Preferred Stock (or shares of
Common Stock, other securities, cash or other assets, as the case may be) as to
which the Rights are then exercisable, at or prior to the earliest of (i) the
close of business on October 19, 2007 (the "Final Expiration Date"), (ii) the
time at which the Rights are exchanged as provided in Section 24, or (iii) the
time at which the Rights are redeemed as provided in Section 23 (such earliest
date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $125,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and
<PAGE> 17
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the certificate duly executed and completed accompanied by payment of the
Purchase Price for the number of one one-hundredths of shares of Preferred
Stock (or shares of Common Stock, other securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any applicable transfer
tax, the Rights Agent shall thereupon, subject to Section 20(k), promptly (i)
requisition from any transfer agent of Preferred Stock certificates for the
number of one one-hundredths of shares of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of shares of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company hereby directs the depositary agent
to comply with such request, (iii) when appropriate, requisition from any
transfer agent of the Common Stock of the Company certificates for the total
number of shares of Common Stock to be paid in accordance with Section
11(a)(ii) and 11(a)(iii), (iv) 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, (v) 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 (vi) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate. The payment of the then Purchase Price may be made in
cash or by certified bank check or bank draft or money order payable to the
order of the Company or the Rights Agent. In the event that the Company is
obligated to issue securities, distribute property or pay cash pursuant to
Section 11(a)(iii) hereof, the Company will make all arrangements necessary so
that cash, property or securities are available for issuance, distribution or
payment by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the-Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
<PAGE> 18
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(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
became such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is a part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Right Certificate surrendered
for such exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner, Affiliates or Associates thereof or of the holder, or
of any other Person with which such holder or any of such holder's Affiliates
or Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange
<PAGE> 19
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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 other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities) or out of its
authorized and issued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and issued Common Stock and/or
other securities) held in its treasury, the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will take such other
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
issuable upon the exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable (but only to the extent that it is
reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts (X) (i) to file, as soon
as practicable following the first occurrence of a Section 11(a)(ii) Event, or
as soon as required by law, as the case
<PAGE> 20
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may be, a registration statement under the Securities Act of 1933, as amended
(the "Act"), with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) to cause such registration statement to
become effective as soon as practicable after such filing, and (iii) to cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the
Expiration Date and (Y) (i) to file appropriate applications with any state or
federal regulatory bodies having jurisdiction over the issuance of the
securities (or assets) purchaseable upon exercise of the Rights in order to
obtain any approvals or orders of such bodies as may be legally required, (ii)
to cause such approvals to be obtained or orders to be issued as soon as
practicable after such filing and (iii) to cause such approvals or orders to
remain effective until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities (or assets), and (B) the Expiration
Date, to the extent not previously obtained. The Company will also take such
action as may be appropriate under the blue sky laws of the various states.
The Company may temporarily suspend, (X) for a period of time not to exceed
ninety (90) days after the date set forth in clause (X)(i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective
and (Y) for a period of time not in excess of 180 days after such date (or for
such longer period as is required by any applicable law, rule or regulation of
any appropriate regulatory bodies), the exercisability of the Rights in order
to obtain any such required regulatory body approvals or orders. Upon any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualifications in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of the Preferred Stock (and
following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the
<PAGE> 21
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Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any shares of the Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required (a) 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 for the Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or (b) to issue or deliver any certificates for
shares of the Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for any number of shares of Preferred Stock (or 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 whole and/or fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made and shall show the date of
countersignature; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or
<PAGE> 22
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other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of the Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive upon
payment of the Purchase Price then in effect the aggregate number and kind of
shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock (or Common Stock
and/or other securities) transfer books of the Company were open, he or she
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required pursuant
to section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, becomes an
Acquiring Person except as the result of a transaction set forth in Section
13(a) hereof, then, prior to the later of (x) the date on which the Company's
rights of redemption pursuant to Section 23(a) expire, or (y) five (5) days
after the date of the first occurrence of a Section 11(a)(ii) Event, proper
provision shall be made so that each holder of a
<PAGE> 23
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Right, except as provided in Section 7(e) hereof, shall thereafter have a
right to receive, upon exercise thereof at the then current Purchase Price for
the number of one one-hundredths of a share of Preferred Stock for which such
Right is then exercisable in accordance with the terms of this Agreement, in
lieu of shares of Preferred Stock, such number of shares of the Common Stock of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-hundredths of a share of
Preferred Stock for which a Right is then exercisable and dividing that product
by (y) 50% of the Current Market Price per share of the Common Stock of the
Company (determined pursuant to Section 11(d)) on the date of the occurrence of
the event listed above in this subparagraph (ii) (such number of shares are
hereinafter referred to as the "Adjustment Shares") provided that the Purchase
Price and the number of Adjustment Shares shall be further adjusted as provided
in this Agreement to reflect any events occurring after the date of such first
occurrence.
(iii) In the event that the number of shares of Common Stock which
are authorized by the Company's Amended and Restated Articles of Incorporation
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Company shall (A)
determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon exercise of the Rights
and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which a majority of the Independent Directors and the Board of Directors of the
Company have deemed to have the same value as shares of Common Stock (such
shares of preferred stock, "Common Stock Equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by a majority of the Independent Directors and the Board of
Directors of the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the Company;
provided, however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following
the later of (x) the
<PAGE> 24
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first occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's rights of redemption pursuant to Section 23(a) expires (the later
of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the Board
of Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement and shall give simultaneous written notice to the Rights
Agent stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the Current Market
Price (as determined pursuant to Section 11(d) hereof) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such
date. The Company shall give the Rights Agent notice of the selection of any
Common Stock Equivalent under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or securities having substantially
the same rights, privileges and preferences as the shares of Preferred Stock
("Equivalent Preferred Stock") or convertible into
<PAGE> 25
-22-
the Preferred Stock or Equivalent Preferred Stock) at a price per
share of the Preferred Stock or Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into the Preferred Stock
or Equivalent Preferred Stock) less than the Current Market Price (as defined
in Section 11(d) per share of the Preferred Stock or Equivalent Preferred
Stock, as the case may be) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, of which
the numerator shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock or Equivalent
Preferred Stock which the aggregate offering price of the total number of
shares of Preferred Stock or Equivalent Preferred Stock so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market Price and of which the
denominator shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. 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 Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Preferred
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Price per share of Preferred Stock
<PAGE> 26
-23-
(as defined in Section 11(d)) on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one share of Preferred
Stock and of which the denominator shall be such Current Market Price per share
of Preferred Stock. Such adjustments shall be made successively whenever such
a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the 30 consecutive
Trading Days (as such term is hereinafter defined in this paragraph (d))
immediately prior to such date and for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
Current Market Price per share of Common Stock is determined during the period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights)
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above after the ex-dividend date for such dividend or
distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall
be appropriately adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of the
Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed
<PAGE> 27
-24-
on the principal national securities exchange on which the shares of the
Common Stock are listed or admitted to trading or, if the shares of the Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of the Common Stock are 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 Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date shall be as determined in good faith by
the Independent Directors if the Independent Directors constitute a majority of
the Board of Directors or, in the event the Independent Directors do not
constitute a majority of the Board of Directors, by an independent investment
banking firm selected by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if
the shares of the Common Stock are not listed or admitted to trading on any
national securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday
on which banking institutions in the State of New York are not authorized or
obligated by law or executive order to close. If the Common Stock is not
publicly held or not so listed or traded, "Current Market Price" per share
shall mean the fair value per share as determined in good faith by the
Independent Directors if the Independent Directors constitute a majority of the
Board of Directors or, in the event the Independent Directors do not constitute
a majority of the Board of Directors, by an independent investment banking firm
selected by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this Section
11(d) (other than the last sentence thereof). If the Current Market Price per
share of Preferred Stock cannot be determined in the manner provided above or
if the Preferred Stock is not publicly held or listed or traded in any manner
described in clause (i) of
<PAGE> 28
-25-
this Section 11(d), the "Current Market Price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is publicly
held or so listed or traded, "Current Market Price" per share of the Preferred
Stock shall mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the "Current Market Price" of one
one-hundredths of a share of Preferred Stock shall be equal to the "Current
Market Price" of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or one millionth of a
share of Preferred Stock as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than shares of Preferred
Stock, thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares contained in Section 11(a) through
(q), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder
<PAGE> 29
-26-
shall evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a share of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares 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 shares of Preferred
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after the adjustment of the Purchase Price. The Company shall make a public
announcement and shall give simultaneous written notice to the Rights Agent of
its election to adjust the number of Rights, indicating the record date for the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of
<PAGE> 30
-27-
record in substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record
of Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then stated value, if any, of
a share of Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable such number of one one-hundredths of a share of such
Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors of the Company shall determine to
<PAGE> 31
-28-
be advisable in order that any consolidation or subdivision of shares of
Preferred Stock, issuance wholly for cash of any of shares of Preferred Stock
at less than the Current Market Price, issuance wholly for cash of the
Preferred Stock or securities which by their terms are convertible into or
exchangeable for Preferred Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27 hereof, take
(nor will it permit any of its Subsidiaries to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
(o) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section
11(n)), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(n)), or (iii) sell
or transfer (or permit any of its Subsidiaries to sell or transfer), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n)) if (x) at the time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger
or sale, the stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Record Date and prior
to the Distribution Date (i) declare a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding
<PAGE> 32
-29-
shares of Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
(q) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date, the Company may, in lieu of making any
adjustment to the Purchase Price, the number of shares of Preferred Stock
eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Section 11(a)(i),
11(b), 11(c), 11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with
the objectives of the Board of Directors in adopting this Agreement and such
Sections.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment and the
adjusted Purchase Price, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(n)) and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidi-
<PAGE> 33
-30-
ary of the Company in a transaction which complies with Section 11(n))
shall consolidate, merge with and into the Company and the Company shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the 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 or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(n) hereof), then, and in each such case proper
provision shall be made so that (i) each holder of a Right (except as provided
in Section 7(e)) shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of call or first
refusal, or other adverse claims as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the then number of one
one-hundredths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such one one-hundredths of a share for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by (2) 50% of the
Current Market Price per share of the Common Stock of such Principal Party
(determined in the manner described in Section 11(d)) 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 Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 shall thereafter apply to such Principal Party; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its Common Stock in accordance with Section
<PAGE> 34
-31-
9) 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; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to the merger or consolidation; and
(2) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (x) 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 corporation the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other corporation; (y) if such Person is a Subsidiary, directly or
indirectly, of more than one corporation, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such corporations is the issuer of the Common Stock having the
greatest market value.
(c) The Company shall not consummate any Section 13 Event unless all
regulatory approvals for the consummation of such Section 13 Event and the
exercise of the Rights in accordance with the terms of this Agreement have been
obtained and the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which are neither outstanding nor reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and
<PAGE> 35
-32-
(b) of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, will use its best
efforts to cause such registration statement to become effective as
soon as practicable after such filing and will use its best efforts
to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until
the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive Section
13 Events. In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
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, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed 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
<PAGE> 36
-33-
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is making a market in
the Rights the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred
Stock). In lieu of fractional shares that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Company may pay to the
registered holders of Right Certificates at the time the Rights evidenced
thereby are exercised or exchanged as herein provided an amount in cash equal
to the same fraction of the current market value of one one-hundredth of a
share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii)) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of a Triggering Event the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one (1) 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 (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
<PAGE> 37
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(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as otherwise permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the 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 respect of, his
right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed, along
with a signature guarantee and such other and further documentation as
the Rights Agent may reasonably request;
(c) subject to Section 6 and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name the Right
Certificate (or, prior to
<PAGE> 38
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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
required to be affected by any notice to the contrary;
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
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 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 shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders 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 25), 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. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the ad-
<PAGE> 39
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ministration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent (including the reasonable fees and expenses of counsel), for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Right Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, instruction, adjustment notice, 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.
In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement in reliance upon (i)
the proper execution of the certification concerning beneficial ownership
appended to the Form of Assignment and the Form of Election to Purchase
included as part of Exhibit B hereto (the "Certification"), unless the Rights
Agent shall have actual knowledge that, as executed, the Certification is
untrue or (ii) the non-execution or failure to complete the Certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution or failure.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation, succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligi-
<PAGE> 40
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ble for appointment as a successor Rights Agent under the provisions of
Section 21. 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 so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with the legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed
by any one of the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to
the Rights
<PAGE> 41
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Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. The issuance or
non-issuance of a Right Certificate or Preferred Stock or other security
issued in lieu of Preferred Stock in accordance with instructions given
to the Rights Agent by the Company pursuant to Section 20(k) hereof or in
accordance with the terms hereof shall not constitute negligence, bad
faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or
in any Right Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 11 or 13 or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or Common
Stock to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of Preferred Stock or Common 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
<PAGE> 42
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be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any one of
the Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company, and is authorized 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.
An application by the Rights Agent for instructions may set forth in
writing any action proposed to be taken or omitted by the Rights Agent
with respect to its duties and obligations under this Agreement and the
date on and/or after which such action shall be taken, and the Rights
Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date
specified therein (which date shall not be less than one Business Day
after the Company receives such application) without the consent of the
Company unless prior to taking or omitting such action, the Rights Agent
has received written instructions in response to application specifying
the actions to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either by 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, ne-
<PAGE> 43
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glect or misconduct; provided, however, reasonable care was exercised
in the selection thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties 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 if, with respect to any Rights
Certificate surrendered to the not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response, the
Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting the Company. The
Company shall give the Rights Agent prompt written instructions as to the
action to be taken regarding the Rights Certificates involved. The
Rights Agent shall not be liable for acting in accordance with such
instructions.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Preferred Stock and the Common Stock by
registered or certified mail, and, at the Company's expense, to the holders of
the Right Certificates by first class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon thirty (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 Preferred Stock and the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Company shall become the temporary Rights Agent and the registered
holder of any Right
<PAGE> 44
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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 the State of New
York (or of any other state of the United States so long as such corporation is
authorized to do business as a banking or trust institution in the State of New
York), in good standing, having a principal office in the State of New York,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority or which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $25 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Preferred Stock and the Common Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration the Rights, the
Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate
<PAGE> 45
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number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Right 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 (ii) 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 and Termination. (a) The Board of Directors
of the Company may, at its option, at any time prior to the earlier of (x) the
close of business on the tenth calendar day following the Shares Acquisition
Date (or if the Shares Acquisition Date shall have occurred prior to the Record
Date, the close of business on the tenth day following the Record Date), or (y)
the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $.001 per Right as 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"), and the Company may, at its option, pay
the Redemption Price either in shares of its Common Stock (valued at their
Current Market Price as defined in Section 11(d)(i) on the date of the
redemption), other securities, cash or other assets; provided, however, that if
the Board of Directors of the Company authorizes redemption of the Rights on or
after the Shares Acquisition Date, then there must be Independent Directors in
office and such authorization shall require the concurrence of a majority of
the Independent Directors. Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the first occurrence
of a Section 11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the Board of Directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and with such care, including reasonable inquiry, skill and diligence,
as a person of ordinary prudence would use under similar circumstances, and
they may consider the long-term and short-term effects of any action upon
employees, customers and creditors of the Company and upon communities in which
offices or other establishments of the Company are located, and all other
pertinent factors.
<PAGE> 46
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(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, 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 held. Within 10 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 holders of the then outstanding Rights by
mailing such notice to the Rights Agent and 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 that specifically set forth in this Section 23, and
other than in connection with the repurchase of Common Stock prior to the
Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company
may, at its option (provided that there are then Independent Directors in
office and a majority of the Independent Directors concur), at any time and
from time to time on or after a Section 11(a)(ii) Event, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. Promptly
after the action of the Board of Directors ordering an exchange of the Rights,
the Company shall give notice of any such exchange to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice
<PAGE> 47
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to all such holders at each holder's last address as it appears 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 will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or Equivalent Preferred
Stock, as such term is defined in Section 11(b) hereof) for shares of Common
Stock exchangeable for the Rights, at the initial rate of one one-hundredth of
a share of Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in the dividend
rights of the Preferred Stock pursuant to the terms thereof.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued, but not outstanding, or authorized but
unissued, to permit any exchange of Rights as contemplated in accordance with
this Section 24 or that any regulatory actions or approvals are required in
connection therewith, the Company shall take all such action as may be
necessary to authorize additional Common Stock or Preferred Stock for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractional shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock pursuant to this Section 24. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of
this Section 24(e), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
<PAGE> 48
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(f) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right
(i) Common Stock Equivalents (ii) cash, (iii) debt securities of the Company,
(iv) other assets, or (v) any combination of the foregoing, having an aggregate
value which a majority of the Independent Directors and the Board of Directors
of the Company shall have determined in good faith to be equal to the Current
Market Price of one share of Common Stock (determined pursuant to Section 11(d)
hereof) on the Trading Date immediately preceding the date of exchange pursuant
to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
periodic cash dividend), or (b) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock), or (d) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(n) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer),
in one or more transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n) hereof), or (e) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to the Rights Agent and to each holder of a
Right, in accordance with Section 26, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend,
distribution of rights or Rights, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (a) or (b) above at least
twenty (20) days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of
<PAGE> 49
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such proposed action or the date of participation therein by the holders of the
Preferred Stock, whichever shall be the earlier.
In case a Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to the Rights
Agent and to each holder of a Right, to the extent feasible and in accordance
with Section 26, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) and all references in the preceding paragraph to Preferred Stock
shall be deemed to thereafter refer to Common Stock and/or other securities, as
the case may be.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
First Industrial Realty Trust, Inc.
311 S. Wacker Drive
Suite 4000
Chicago, IL 60606
Attention: Mr. Michael Havala
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of 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:
First Chicago Trust Company of New York
525 Washington Blvd.
Suite 4660
Jersey City, NJ 07310
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such
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holder at the address of such holder as shown on the registry books of the
Company.
Section 27. Supplements and Amendments. Prior to the earlier of the
Distribution Date or the Shares Acquisition Date and subject to the ultimate
sentence of this Section 27, the Company may from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates.
From and after the earlier of the Distribution Date or the Shares Acquisition
Date, and subject to the penultimate sentence of this Section 27, the Company
may from time to time supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or (iii) to lengthen the time
period during which the Rights may be redeemed following the Shares Acquisition
Date for up to an additional twenty days beyond the time period set forth in
Section 23(a) (provided that any such lengthening shall be effective only if
there are Independent Directors and shall require the concurrence of a majority
of such Independent Directors), or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interests under this Agreement. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment shall be made on or
after the Distribution Date which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of shares of Preferred Stock
for which a Right is then exercisable.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the par-
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ticular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the provisions
of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board of Directors of the Company (and, where specifically provided
for herein, the Independent Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or the Company (or, as expressly provided,
the Independent Directors), or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for the purpose of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, as
provided for, by the Independent Directors) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties, and (ii) not subject the Board or the
Independent Directors to any liability to the holders of the Right
Certificates.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemp-
<PAGE> 52
-49-
tion set forth in Section 23 hereof shall be reinstated and shall not expire
until the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Maryland 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 except that the rights,
duties and obligations of the Rights Agent under this Agreement shall be
governed by the laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
<PAGE> 53
-50-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
FIRST INDUSTRIAL REALTY TRUST, INC.
Attest
By: By:
----------------------- --------------------------------
Name: Name:
Title: Title:
[SEAL]
Attest: First Chicago Trust Company of
New York, as Rights Agent
By: By:
----------------------- --------------------------------
Name: Name:
Title: Title:
<PAGE> 54
Exhibit A
Junior Participating Preferred Stock
(Liquidation Preference $1.00 Per Share)
ARTICLES SUPPLEMENTARY
FIRST INDUSTRIAL REALTY TRUST, INC.
____________________________
Articles Supplementary of Board of Directors Classifying
and Designating a Series of Preferred Stock as
Junior Participating Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
____________________________
Dated as of September 5, 1997
<PAGE> 55
EXHIBIT A
FIRST INDUSTRIAL REALTY TRUST, INC.
__________
Articles Supplementary of Board of Directors Classifying
and Designating a Series of Preferred Stock as
Junior Participating Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
__________
First Industrial Realty Trust, Inc., a Maryland corporation, having
its principal office in the State of Maryland in the City of Baltimore (the
"Company"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
Pursuant to authority conferred upon the Board of Directors by the
Charter and Bylaws of the Company, the Board of Directors pursuant to
resolutions adopted on September 4 1997 (i) authorized the creation and
issuance of up to 1,000,000 shares of Junior Participating Preferred Stock
which stock was previously authorized but not issued and (ii) determined the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the shares of such series and the Dividend Rate payable on such
series. Such preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption, number of shares and Dividend Rate are as follows:
Section 1. Number of Shares and Designation. This class of
Preferred Stock shall be designated the Junior Participating Preferred Stock
(the "Preferred Shares") and the number of shares which shall constitute such
series shall be 1,000,000 shares, par value $.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 Preferred Shares 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
<PAGE> 56
-2-
warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Preferred Shares.
Section 2. Dividend Rights. (1) Subject to the rights of holders
of any shares of any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Preferred Shares with respect to dividends, the
holders of Preferred Shares shall be entitled prior to the payment of any
dividends on shares ranking junior to the Preferred Shares to receive, when, as
and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the first day of February,
May, August and November in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Preferred Shares, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions (other than a dividend
payable in shares of common stock, par value $0.01 per share, of the Company
(the "Common Stock") or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise)) declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Preferred Shares. In the event the Company shall at any
time (i) declare or pay any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount to which holders of Preferred Shares were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(2) The Company shall declare a dividend or distribution on the
Preferred Shares as provided in subparagraph (A) above immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the
<PAGE> 57
-3-
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Preferred Shares shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on
outstanding Preferred Shares from the Quarterly Dividend Payment Date next
preceding the date of issue of such Preferred Shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of Preferred Shares entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders
of Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
Section 3. Liquidation. (1) Upon any liquidation, dissolution or
winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Preferred Shares unless, prior thereto, the
holders of shares of Preferred Shares shall have received $1.00 per share (the
"Liquidation Preference"), plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such
payment. Following the payment of the full amount of the Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Preferred Shares unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common Adjustment") equal
to the quotient obtained by dividing (i) the Liquidation Preference by (ii) 100
(as appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stocks splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Liquidation
Preference and the Common Adjustment in respect of all outstanding Preferred
<PAGE> 58
-4-
Shares and shares of Common Stock, respectively, holders of Preferred Shares
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to the Preferred Shares and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Preferred Shares, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of
Common Stock.
(C) In the event the Company shall at any time (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 4. No Redemption. (1) Except as provided below, the Preferred
Shares shall not be redeemable.
(2) The Preferred Shares are subject to the provisions of Article IX
of the Charter, including, without limitation, the provisions for the redemption
of Excess Stock (as defined in such Article).
Section 5. Voting Rights. The holders of Preferred Shares shall
have the following voting rights:
(1) Subject to the provision for adjustment hereinafter set forth,
each Preferred Share shall entitle the holder thereof to 100 votes on all
matters voted on at a meeting of the stockholders of the Company. In the event
the Company shall at any time (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) subdivide the
<PAGE> 59
-5-
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the number of votes per
share to which holders of Preferred Shares were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(2) Except as otherwise provided herein or by law, the holders of
Preferred Shares and the holders of shares of Common Stock and any other
capital stock of the Company having general voting rights shall vote together
as one voting group on all matters submitted to a vote of stockholders of the
Company.
(3) Except as set forth herein or as otherwise provided by law,
holders of Preferred Shares 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 6. Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or distributions
payable on the Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on Preferred Shares outstanding shall have been paid
in full, the Company shall not:
declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Preferred Shares;
declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Preferred Shares, except
dividends paid ratably on the Preferred Shares and all such parity stock
on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
<PAGE> 60
-6-
redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Preferred Shares,
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stock of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Preferred Shares; or
purchase or otherwise acquire for consideration any shares of
Preferred Shares or any shares of stock ranking on a parity with the
Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under subparagraph (A) of this Section 6,
purchase or otherwise acquire such shares at such time and in such manner.
Section 7. Reacquired Shares. Any Preferred Shares purchased or
otherwise acquired by the Company in any manner whatsoever shall be retired and
cancelled 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 to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein or in the Charter.
Section 8. Merger, Consolidation, etc. In case the Company shall
enter into any merger, consolidation, 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
Preferred Share shall at the same time be similarly exchanged or changed into
an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which
<PAGE> 61
-7-
each share of Common Stock is changed or exchanged. In the event the Company
shall at any time (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of Preferred Shares shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 9. Ranking. The Preferred Shares shall rank, with
respect to the payment of dividends and distribution of assets, junior to all
series of any other class of the Company's Preferred Stock unless the terms of
any such series shall provide otherwise.
Section 10. Amendment. The Charter, including the Articles
Supplementary establishing the rights and preferences of the Preferred Shares,
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Preferred Shares so as to affect
them adversely without the affirmative vote of the holders of a majority of
the outstanding shares of Preferred Shares, voting separately as one voting
group.
Section 11. Fractional Shares. Preferred Shares may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Preferred Shares.
<PAGE> 62
-8-
IN WITNESS WHEREOF, the Company has caused these Articles
Supplementary to be signed in its name and on its behalf and attested to by the
undersigned on this 5th day of September, 1997 and the undersigned acknowledges
under the penalties of perjury that these Articles Supplementary are the
corporate act of said Company and that to the best of his knowledge,
information and belief, the matters and facts set forth herein are true in all
material respects.
FIRST INDUSTRIAL REALTY TRUST, INC.
By:
--------------------------------
Name: Michael T. Tomasz
Title: President and Chief
Executive Officer
Attest:
- ----------------------------------
Name: Michael J. Havala
Title: Chief Financial Officer and
Secretary
<PAGE> 63
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER OCTOBER 19, 2007 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. 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 DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF THE RIGHTS AGREEMENT.]1
FIRST INDUSTRIAL REALTY TRUST, INC.
Right Certificate
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 September 16, 1997 (the "Rights Agreement") between First
Industrial Realty Trust, Inc., a Maryland corporation (the "Company"), and
First Chicago Trust Company of New York, a New York corporation (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (New
York City time) on October 19, 2007 at the designated office of the Rights
Agent, or its successors as Rights Agent, in New York, New York, one
one-hundredth of a fully paid non assessable share of the Junior Participating
Preferred Stock, par value $.01 per share(the "Preferred Stock"), of the
Company, at
- -------------------
(1) The portion of the legend in brackets shall be inserted only if applicable.
B-1
<PAGE> 64
a purchase price of $125 per one one-hundredth of a share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase and related certificate duly executed, along with
a signature guarantee and such other and further documentation as the Rights
Agent may reasonably request. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of September 16, 1997, based on the Preferred
Stock of the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock (or, in certain circumstances, common stock
and/or other securities) 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, including Triggering Events (as such
term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent, and at the executive offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights en-
B-2
<PAGE> 65
titling the holder to purchase a like aggregate number of one one-hundredths
of a share of Preferred Stock as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof, along with a signature guarantee and
such other and further documentation as the Rights Agent may reasonably
request, another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be (i) redeemed by the Company at a redemption price of
$.001 per Right or (ii) exchanged by the Company in whole or in part for shares
of common stock or Preferred Stock.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Stock or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
B-3
<PAGE> 66
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of , .
[SEAL]
ATTEST: FIRST INDUSTRIAL REALTY TRUST, INC.
By: By:
-------------------------- ----------------------------
Name: Name:
Title: Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent
By:
--------------------------
Authorized Signature
Date:
B-4
<PAGE> 67
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED
--------------------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address of transferee)
- -------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint_________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
-------------- ----
------------------------------
Signature
Signature Guaranteed:
---------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
B-5
<PAGE> 68
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to 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:
--------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
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-6
<PAGE> 69
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
First Industrial Realty Trust, Inc.:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of the
Preferred Stock issuable upon the exercise of such 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 shares be
issued in the name of:
Please insert social security or
other taxpayer identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or
other taxpayer identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: ,
------------- ------
-------------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
B-7
<PAGE> 70
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(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
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.
B-8
<PAGE> 71
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September 4, 1997, the Board of Directors of First Industrial Realty
Trust, Inc. (the "Company") declared, a dividend distribution of one Right for
each outstanding share of Common Stock, $0.01 par value (the "Common Stock"),
of the Company. The distribution is payable on October 20, 1997 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Junior Participating Preferred Stock (the
"Preferred Stock"), at a price of $125 per one one-hundredth of a share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent").
Distribution Date; Transfer of Rights
Until the earlier to occur of (i) ten calendar days following the date
(the "Shares Acquisition Date") of public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") acquired, or
obtained the right to acquire, beneficial ownership of Common Stock or other
voting securities ("Voting Stock") that have 15% or more of the voting power of
the outstanding shares of Voting Stock or (ii) ten calendar days (or such later
date as may be determined by action of the Board of Directors prior to the time
any person or group of affiliated persons becomes an Acquiring Person)
following the commencement or announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in such person
acquiring, or obtaining the right to acquire, beneficial ownership of Voting
Stock having 15% or more of the voting power of the outstanding shares of
Voting Stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificates. The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Company's Common Stock.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of the Company's Common Stock will contain a notation
incorporating the Rights Agreement by reference. Until the Dis-
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tribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Company's Common Stock certificates
outstanding as of the Record Date will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Company's Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on October 19, 2007, unless earlier
redeemed or exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
In the event that a Person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Exercise Price of the Right.
Adjustments to Purchase Price
The Purchase Price payable, and the number of shares of Preferred Stock
(or Common Stock or other securities, as the case may be) issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or
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reclassification of the Preferred Stock, (ii) upon the grant to holders of
the Preferred Stock of certain rights or warrants to subscribe for shares of
the Preferred Stock or convertible securities at less than the current market
price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued (other than fractional shares which are integral
multiples of one one-hundredth of a share of Preferred Stock) and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of exercise.
Redemption and Exchange of Rights
At any time after the occurrence of the event set forth under the heading
"Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the Independent Directors) may
exchange the Rights (other than Rights owned by the Acquiring Person which
shall have become void), in whole or in part, at an exchange ratio of one share
of Common Stock (or a fraction of a share of Preferred Stock having the same
market value) per Right (subject to adjustment).
At any time prior to 5:00 P.M. New York City time on the tenth calendar
day following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
Under certain circumstances set forth in the Rights Agreement, the decision to
redeem shall require that there be Independent Directors in office and that a
majority of the Independent Directors concur in such decision. Immediately
upon the action of the Board of Directors of the Company electing to redeem the
Rights with, if required, the concurrence of the Independent Directors, the
Company shall make announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
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Until a Right is exercised or exchanged, 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.
Terms of the Preferred Stock
The Preferred Stock will rank junior to all other series of the Company's
preferred stock with respect to payment of dividends and as to distributions of
assets in liquidation. Each share of Preferred Stock will have a quarterly
dividend rate per share equal to the greater of $1.00 or 100 times the per
share amount of any dividend (other than a dividend payable in shares of Common
Stock or a subdivision of the Common Stock) declared from time to time on the
Common Stock, subject to certain adjustments. The Preferred Stock will not be
redeemable. In the event of liquidation, the holders of the Preferred Stock
will be entitled to receive a preferred liquidation payment per share of $1.00
(plus accrued and unpaid dividends) or, if greater, an amount equal to 100
times the payment to be made per share of Common Stock, subject to certain
adjustments. Generally, each share of Preferred Stock will vote together with
the Common Stock and any other series of cumulative preferred stock entitled to
vote in such manner and will be entitled to 100 votes, subject to certain
adjustments. In the event of any merger, consolidation, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or other property, each share of Preferred
Stock will be entitled to receive 100 times the aggregate amount of stock,
securities, cash and/or other property, into which or for which each share of
Common Stock is changed or exchanged, subject to certain adjustments. The
foregoing dividend, voting and liquidation rights of the Preferred Stock are
protected against dilution in the event that additional shares of Common Stock
are issued pursuant to a stock split or stock dividend or distribution.
Because of the nature of the Preferred Stock's dividend, voting, liquidation
and other rights, the value of the one one-hundredth of a share of Preferred
Stock purchasable with each Right is intended to approximate the value of one
share of Common Stock.
Amendments to Terms of the Rights
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain
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circumstances, with the concurrence of the Independent Directors) in order to
cure any ambiguity, defect or inconsistency, or to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person); provided, however, that no supplement or amendment
may be made after the Distribution Date which changes those provisions relating
to the principal economic terms of the Rights.
The term "Independent Directors" means any member of the Board of
Directors of the Company who either (i) was a member of the Board on the date
of the Rights Agreement or (ii) is subsequently elected to the Board if such
person is recommended or approved by a majority of the Independent Directors,
but shall not include an Acquiring Person, or an affiliate or associate of an
Acquiring Person, or any representative of the foregoing entities.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
[ ], 1997. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
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