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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2000
First Community Corporation
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(Exact name of registrant as specified in its charter)
Tennessee 0-25972 62-1562541
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
809 West Main Street
Rogersville, Tennessee 37857
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 272-5800
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Item 5. Other Events
On April 26, 2000, the Board of Directors of First Community
Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock, no par value (the "Company Common Stock"), to
shareholders of record at the close of business on May 4, 2000 and for each
share of Company Common Stock issued (including shares distributed from
Treasury) thereafter and prior to the Distribution Date (as hereinafter defined)
subject to the execution of the Rights Agreement (as hereinafter defined) and to
certain other matters. Each Right entitles the registered holder, subject to the
terms of the Rights Agreement, to purchase from the Company one one-hundredth of
a share (a "Unit") of Series A Junior Preferred Stock, no par value (the
"Preferred Stock") at a Purchase Price of $32.00 per Unit, subject to
adjustment. The Purchase Price is payable in cash or by certified or bank check
or bank draft payable to the order of the Company. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and First Union National Bank, as Rights Agent, dated April 26,
2000.
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights Certificates
will be distributed. The Rights will separate from the Company Common Stock, and
the Distribution Date will occur, upon the earlier of (i) 10 days following a
public announcement (the date of such announcement being the "Stock Acquisition
Date") that a person or group of affiliated or associated persons (other than
the Company, any Subsidiary of the Company or any employee benefit plan of the
Company or any such Subsidiary) has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 20% or more of the then outstanding
shares of Company Common Stock, or (ii) 10 days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of the then outstanding shares of Company Common
Stock. Until the Distribution Date, (i) the Rights will be evidenced by Company
Common Stock certificates and will be transferred with and only with such
Company Common Stock certificates, (ii) new Company Common Stock certificates
issued after May 4, 2000 will contain a notation incorporating the Rights
Agreement by reference, and (iii) the surrender for transfer of any certificates
representing outstanding Company Common Stock will also constitute the transfer
of the Rights associated with the Company Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on May 4, 2010 unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) a Person becomes the beneficial owner of 20% or
more of the then outstanding shares of Company Common Stock or (ii) during the
pendency of any tender or exchange offer for Company Common Stock or prior to
the expiration of 20 business days (or such later date as a majority of the
Independent Directors may determine) after the date such tender or
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exchange offer is terminated or expires, a person becomes the Beneficial owner
of 10% or more of the then outstanding shares of Company Common Stock (unless
under certain circumstances specified in the Rights Agreement), then, in each
such case, each holder of a Right will thereafter have the right to receive,
upon exercise, Company 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. The exercise price is the Purchase Price
multiplied by the number of Units of Preferred Stock issuable upon exercise of a
Right prior to the events described in this paragraph. 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.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person effects a share
exchange or merges with the Company and all or part of the Company Common Stock
is converted or exchanged for securities, cash or property of any other Person
or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the Acquiring Person having a value equal to two times
the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to the holders of the Preferred Stock of evidences of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time prior to the earlier of (i) the close of business on the
Final Expiration Date or (ii) the close of business on the tenth day following
the Stock Acquisition Date, a majority of the Independent Directors may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), payable, at the election of such majority of Independent
Directors, in cash or shares of Company Common Stock. Immediately upon the
action of a majority of the Independent Directors ordering the redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be supplemented or
amended at any time prior to the Distribution Date without the consent of the
holders of the Rights. After the Distribution Date, the provisions of the Rights
Agreement may be supplemented or amended without the consent of the holders of
the Rights in order to cure any ambiguity, defect or inconsistency, to make
changes which are consistent with the objectives of the Board in adopting the
Rights Agreement, except that from and after such time as any person becomes an
Acquiring Person, no such amendment may adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
As of May 4, 2000, 2,021,180 shares of the Company Common Stock were
issued and outstanding. Each outstanding share of Company Common Stock on May 4,
2000 will receive one Right. As long as the Rights are attached to the Company
Common Stock, the Company will issue one Right for each share of Company Common
Stock issued between the Record Date and the Distribution Date. As of May 4,
2000, no shares of Series A Junior Preferred Stock were issued and outstanding.
A total of 300,000 shares of Series A Junior Preferred Stock has been reserved
for issuance upon exercise of the Rights, subject to adjustment.
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend rate of $.01 per Unit, but will, in any event, be entitled to a
dividend equal to the per share dividend declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock
will receive a preferred liquidation payment equal to the greater of $32.00 per
Unit or the per share amount paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with
the Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
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In the event of any merger, share exchange or other transaction in
which shares of Company Common Stock are exchanged, each Unit of Preferred Stock
will be entitled to receive the per share amount paid in respect of each share
of Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation
and voting, and in the event of mergers and share exchanges, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by a majority of the Independent Directors unless
the offer is conditioned on a substantial number of Rights being acquired.
However, the Rights should not interfere with any merger or other business
combination approved by a majority of the Independent Directors since the Rights
may be redeemed by the Company at $.01 per Right at any time on or prior to the
tenth day following the Stock Acquisition Date (subject to extension by a
majority of such Independent Directors). Thus, the Rights are intended to
encourage persons who may seek to acquire control of the Company to initiate
such an acquisition through negotiations with the Board of Directors. However,
the effect of the Rights may be to discourage a third party from making a
partial tender offer or otherwise attempting to obtain a substantial position in
the equity securities of, or seeking to obtain control of, the Company. To the
extent any potential acquirors are deterred by the Rights, the Rights may have
the effect of preserving incumbent management in office.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the form of
Rights Certificate, is attached hereto as Exhibit 1 and is incorporated herein
by reference. The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to such Exhibit.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
1. Rights Agreement, dated April 26, 2000 between First Community
Corporation and First Union National Bank, including Form of
Rights Certificate (Exhibit A), Form of Summary of Rights
(Exhibit B), and Articles of Amendment to the Charter of First
Community Corporation (Exhibit C).
2. Press Release dated May 22, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
First Community Corporation
By: /s/ Mark A. Gamble
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Name: Mark A. Gamble
Title: President and Chief Executive
Officer
By: /s/ Elizabeth O. Lollar
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Name: Elizabeth O. Lollar
Title: Principal Accounting Officer and
Chief Financial Officer
Date: May 23, 2000
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FIRST COMMUNITY CORPORATION
EXHIBITS
TO CURRENT REPORT ON
FORM 8-K DATED MAY 23, 2000
Commission File Number 0-25972
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Exhibit Index
Exhibit No. Description
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1 Rights Agreement, dated April 26, 2000 between the Company and
First Union National Bank, including Form of Rights
Certificate (Exhibit A), Form of Summary of Rights (Exhibit
B), and Articles of Amendment to the Charter of the Company
(Exhibit C).
2 Press Release dated April 26, 2000.
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EXHIBIT 1
FIRST COMMUNITY CORPORATION
and
FIRST UNION NATIONAL BANK
RIGHTS AGENT
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RIGHTS AGREEMENT
DATED APRIL 26, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<S> <C>
1. Certain Definitions........................................................................1
2. Appointment of Rights Agent................................................................6
3. Issue of Rights Certificates...............................................................6
4. Form of Rights Certificates................................................................8
5. Countersignature and Registration.........................................................10
6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates.............................................10
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.............................12
8. Cancellation and Destruction of Rights Certificates.......................................15
9. Reservation and Availability of Capital Stock.............................................16
10. Preferred Stock Record Date...............................................................17
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights...............18
12. Certificate of Adjusted Purchase Price or Number of Shares................................32
13. Share Exchange, Merger or Sale or Transfer of Assets or Earning Power.....................33
14. Fractional Rights and Fractional Shares...................................................38
15. Rights of Action..........................................................................40
16. Agreement of Rights Holders...............................................................41
17. Rights Certificate Holder Not Deemed a Shareholder........................................42
18. Concerning the Rights Agent...............................................................42
</TABLE>
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<TABLE>
<S> <C>
19. Merger or Share Exchange or Change of Name of Rights Agent................................43
20. Duties of Rights Agent....................................................................44
21. Change of Rights Agent....................................................................49
22. Issuance of New Rights Certificates.......................................................50
23. Redemption and Termination................................................................51
24. Notice of Certain Events..................................................................52
25. Notices...................................................................................53
26. Supplements and Amendments................................................................54
27. Successors................................................................................55
28. Determinations and Actions by the Board of Directors, etc.................................55
29. Benefits of this Agreement................................................................56
30. Severability..............................................................................57
31. Governing Law.............................................................................57
32. Counterparts..............................................................................57
33. Descriptive Headings......................................................................57
</TABLE>
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated this 26th day of April, 2000 (the "Agreement"),
between FIRST COMMUNITY CORPORATION, a Tennessee corporation (the "Company"),
and FIRST UNION NATIONAL BANK (the "Rights Agent").
WHEREAS, as of April 26, 2000, (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
distribution of one Right for each share of common stock, no par value, of the
Company (the "Company Common Stock") outstanding at the Close of Business on May
4, 2000 (the "Record Date"), subject to the execution of this Agreement and to
certain other matters, and has also directed the issuance (as such number may
hereinafter be adjusted pursuant hereto) of one right for each share of Company
Common Stock issued by the Company between the Record Date (whether originally
issued or delivered from the Company's treasury) and the Distribution Date, each
Right initially representing the right to purchase upon the terms and subject to
the conditions hereinafter set forth one Unit of Series A Junior Preferred Stock
(the "Right" or collectively, 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 (i) any Person which shall be the
Beneficial Owner of 20% or more of the shares of Company Common Stock then
outstanding, or (ii) any Market Accumulator, but shall not include the Company,
any Subsidiary of the Company, any shareholder
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of the Company who as of the date of this Agreement is the Beneficial Owner of
20% or more of the shares of Company Common Stock, or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
with respect to such plan acting in such capacity. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Company Common Stock by the Company which, by reducing the number
of shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Company Common Stock then
outstanding; provided, however, that if a Person becomes the Beneficial Owner of
20% or more of the Company Common Stock then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional Company Common Stock, then such
Person shall be deemed to be an "Acquiring Person".
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of
the General Rules and Regulations under the Exchange Act (the "Exchange
Act Regulations") as in effect on the date hereof; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any security under this subparagraph (i) as a
result of an agreement, arrangement or understanding, to vote such
security if such agreement, arrangement or
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understanding (A) arises solely from a revocable proxy given in
response to a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act and the
Exchange Act Regulations, and (B) is not reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report);
(ii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such other Person) with
which such Person (or any of such Person's Affiliates or Associates)
has any agreement, arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (i) of this paragraph (c)) or disposing of such
securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time
or upon the satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise;
provided, however, that under this paragraph (c) a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (B) securities that may be issued upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or (C)
securities that may be issued upon exercise of Rights from and after the
occurrence of a Triggering Event, which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the Distribution Date or
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pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in Rogersville, Tennessee are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Rogersville time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Rogersville time, on the next succeeding
Business Day.
(f) "Common Stock" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such Person
shall have no capital stock, the equity securities or other equity interest
having power to control or direct the management of such Person.
(g) "Company Common Stock" has the meaning set forth in the Whereas
Clause.
(h) "Distribution Date" has the meaning set forth in Section 3(a).
(i) "Expiration Date" has the meaning set forth in Section 7(a).
(j) "Independent Director" shall mean a member of the Board of
Directors of the Company who is not, and has never been, an officer or employee
of the Company and who either was a member of the Board of Directors of the
Company prior to the date hereof or who subsequently became a director of the
Company and whose initial election or initial nomination for election by the
Company's shareholders subsequent to such date was approved by a vote of a
majority of the Board of Directors of the Company, which majority includes a
majority of the Independent Directors then on the Board of Directors.
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(k) "Market Accumulator" has the meaning set forth in Section 11(a)
(ii) (B).
(l) "Person" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d) (2) of the Exchange
Act.
(m) "Preferred Stock" shall mean the Series A Junior Preferred Stock,
no par value, of the Company having the voting powers, designation, preferences
and relative, participating, optional or other special rights and
qualifications, limitations and restrictions described in the Articles of
Amendment set forth as Exhibit C hereto.
(n) "Purchase Price" has the meaning set forth in Section 7(b).
(o) "Record Date" has the meaning set forth in the Whereas Clause.
(p) "Right" has the meaning set forth in the Whereas Clause.
(q) "Rights Certificate" has the meaning set forth in Section 3(a).
(r) "Rights Dividend Declaration Date" has the meaning set forth in the
Whereas Clause.
(s) "Section 11(a) (ii) Event" shall mean any event described in
Section 11(a)(ii).
(t) "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof.
(u) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(v) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by such Person.
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(w) "Triggering Event" shall mean any Section 11(a) (ii) Event or any
Section 13 Event.
(x) "Unit" has the meaning set forth in Section 7(b).
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Stock Acquisition Date, and
(ii) the Close of Business on the tenth day after the date of commencement of a
tender offer (as determined by reference to Rule 14d-2(a) under the Exchange
Act) or exchange offer by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity), if upon consummation thereof such Person would be the Beneficial
Owner of 20% or more of the shares of Company Common Stock then outstanding (the
earlier of (i) and (ii) above being the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for shares of Company Common Stock registered in the names
of the holders of shares of Company Common Stock as of and subsequent to the
Record Date (which certificates for shares of Company Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with (and will
automatically be transferred by) the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, unless the Rights have been redeemed in
accordance with Section 23 hereof the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of shares of Company Common
Stock as of the Close of Business
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on the Distribution Date, at the address of such holder shown on the records of
the Company, one or more right certificates, in substantially the form of
Exhibit A hereto (the "Rights Certificates"), evidencing one Right for each
share of Company Common Stock so held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per share of Company
Common Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in a form
which may be appended to certificates that represent shares of Company Common
Stock in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of shares
of Company Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
representing such shares of Company Common Stock issued after the Record Date
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between First
Community Corporation (the "Company") First Union National Bank (the
"Rights Agent") dated April 26, 2000
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(the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
office of the stock transfer administration office of the Rights Agent.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may become
null and void.
With respect to certificates representing shares of Company Common
Stock (whether or not such certificates include the foregoing legend or have
appended to them the Summary of Rights), until the earlier of (i) the
Distribution Date and (ii) the Expiration Date, the Rights associated with the
shares of Company Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of the shares of
Company Common Stock shall also be the registered holders of the associated
Rights, and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the shares of Company Common Stock
represented by such certificates.
Section 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase, assignment and certificate to be printed
on the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed or to conform
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to usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number of
Units of Preferred Stock as shall be set forth therein at the price set forth
therein, but the amount and type of securities, cash or other assets that may be
acquired upon the exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents
Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or such Associate or Affiliate) or to any
Person with whom such Acquiring Person (or such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which a majority of the Independent Directors has determined to be part
of a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of Section 7(e) hereof shall, upon the written direction of a
majority of the Independent Directors, contain (to the extent feasible), the
following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such
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terms are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) Rights Certificates
shall be executed on behalf of the Company by its President or one of its Vice
Presidents and shall be attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Rights Certificates
may be manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature of such
Rights Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized officer, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Sections
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<PAGE> 14
4(b), 7(e) and 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of shares of Preferred Stock
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed the certificate set
forth in the form of assignment on the reverse side of such Rights Certificate
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of the Rights represented by such
Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request; whereupon the Rights Agent shall, subject to the provisions
of Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested.
(b) If a Rights Certificate shall be mutilated, lost, stolen or
destroyed, upon request by the registered holder of the Rights represented
thereby, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a New Rights Certificate, in substantially the
form of the prior Rights
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Certificate, of like tenor and representing the equivalent number of Rights, but
in the case of loss, theft or destruction, only upon receipt of evidence
satisfactory to the Company and the Rights Agent of such loss, theft or
destruction of such Rights Certificate and, if requested by the Company or the
Rights Agent, indemnity also satisfactory to it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Prior to the earlier of (i) the Close of Business on May 4, 2010
(the "Final Expiration Date"), or (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the earlier of (i) and (ii) being the
"Expiration Date"), the registered holder of any Rights Certificate at any time
after the Distribution Date may, subject to the provisions of Section 7(e)
hereof, exercise the Rights evidenced thereby in whole or in part upon surrender
of the Rights Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price (as hereinafter defined) for the number
of Units of Preferred Stock (or, following a Triggering Event, other securities,
cash or other assets, as the case may be) for which such surrendered Rights are
then exercisable.
(b) The purchase price for each one one-hundredth (0.01) of a share
(each such one one-hundredth of a share being a "Unit") of Preferred Stock upon
exercise of Rights shall initially be $32.00, subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof (such purchase price, as so
adjusted, being the "Purchase Price"), and shall be payable in accordance with
paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation organized under
the laws of the United States or any State
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<PAGE> 16
of the United States in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority (such institution being the "Depositary Agent")
certificates representing the total number of shares of Preferred Stock that may
be acquired upon exercise of the Rights and shall cause such Depositary Agent to
enter into an agreement pursuant to which the Depositary Agent shall issue
receipts representing interests in the shares of Preferred Stock so deposited.
Upon receipt of a Rights Certificate representing exercisable Rights, with the
form of election to purchase and the certificate duly executed, accompanied by
proper payment, with respect to each Right so exercised, of the Purchase Price
for the Units (or, following a Triggering Event, other securities, cash or other
assets, as the case may be) to be purchased thereby as set forth below and an
amount equal to any applicable transfer tax or evidence satisfactory to the
Company of payment of such tax, the Rights Agent shall, subject to Section 20(j)
hereof, thereupon promptly (i) requisition from the Depositary Agent depositary
receipts representing such number of Units of Preferred Stock as are to be
purchased and the Company will direct the Depositary Agent to comply with such
request, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. In the event that the Company is
obligated to issue Company Common Stock, other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such Company Common Stock,
other securities, cash and/or other property are
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<PAGE> 17
available for distribution by the Rights Agent, if and when appropriate. The
payment of the Purchase Price (as such amount may be reduced pursuant to Section
11(a) (iii) hereof) may be made in cash or by certified or bank check or bank
draft payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a) (ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and which receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which a majority of the
Independent Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no holder
of such Rights shall have any rights
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<PAGE> 18
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to ensure
that the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights or any other Person as
a result of its failure to make any determination under this Section 7(e) or
such Section 4(b) with respect to an Acquiring Person or its Affiliates,
Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or
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shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company shall at all times prior to the Expiration Date cause
to be reserved and kept available out of its authorized and unissued shares of
Preferred Stock, the number of shares of Preferred Stock that, as provided in
this Agreement, including, without limitation, Section 11(a) (iii) hereof, will
be sufficient to permit the exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a) (ii) Event and a determination by
the Company in accordance with Section 11(a) (iii) hereof of the consideration
to be delivered by the Company upon exercise of the Rights or, if so required by
law, as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date, and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
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(c) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and nonassessable.
(d) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights Certificates
or upon the exercise of Rights; provided, however, the Company shall not be
required to pay any such tax imposed in connection with the issuance or delivery
of Units of Preferred Stock, or any certificates or depositary receipts for such
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or assets, as the case may be) to any person other than the
registered holder of the Rights Certificates evidencing the Rights surrendered
for exercise. The Company shall not be required to issue or deliver any
certificates or depositary receipts for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, any other securities, cash or assets, as
the case may be) to, or in a name other than that of, the registered holder upon
the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for shares of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the shares of
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any
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<PAGE> 21
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such securities on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a shareholder of the Company
with respect to securities for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of 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 share exchange or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination or
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<PAGE> 22
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date upon
exercise of the Rights, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both this Section 11(a) (i) and
Section 11(a) (ii) hereof, the adjustment provided for in this Section
11(a) (i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a) (ii) hereof.
(ii) In the event:
(A) any Person (other than the Company, any Subsidiary of the
Company, any shareholder of the Company who as of the date of this
Agreement is the Beneficial Owner of 20% or more of the shares of
Company Common Stock, or any employee benefit plan maintained by the
Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity) shall become the
Beneficial Owner of 20% or more of the shares of Company Common Stock
then outstanding, other than pursuant to any transaction set forth in
Section 13(a) hereof; or
(B) any Person (a "Market Accumulator") which, together with
all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 10% or more of the Company Common Stock then outstanding (1)
during the pendency of any tender or exchange offer for
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<PAGE> 23
Company Common Stock or (2) prior to the expiration of 20 business days
(or such later date as a majority of the Independent Directors may from
time to time determine, in advance of the expiration of such period, as
the same may be extended, to be reasonable in the circumstances) after
the date (as determined by a majority of the Independent Directors of
the Company) on which any tender or exchange offer for Company Common
Stock is terminated or expires, other than (x) by accepting for payment
and paying for Company Common Stock tendered pursuant to a tender offer
or by effecting an exchange for Company Common Stock pursuant to an
exchange offer, as applicable, and, following either such event, by
acquiring Beneficial Ownership of Company Common Stock in any merger or
consolidation of the Company with or into the offeror in such tender or
exchange offer or an Affiliate of such offeror that has been approved
by the holders of the requisite number of securities of the Company
entitled to vote for such action (provided that nothing herein shall
reduce or limit the benefits the holders of the Rights would have
pursuant to other provisions of this Agreement, including, without
limitation, the benefits under Section 11 and Section 13 hereof), (y)
by purchasing Company Common Stock from the Company, or (z) pursuant to
a transaction subject to Section 13 hereof; provided, however, that if
any Person is the Beneficial Owner of 10% or more of Company Common
Stock as of the date of the commencement of such tender offer, such
Person shall not be deemed to be a Market Accumulator unless such
Person shall thereafter be the Beneficial Owner at any time referred to
in (1) or (2) of this Section 11(a) (ii) (B) of a number of shares of
Company Common Stock greater than the number of shares of Company
Common Stock Beneficially Owned
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by such Person as of such time other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in
which all shareholders are treated equally.
then, immediately upon the date of the occurrence of an event described in
Section 11(a) (ii) (A) or (B) hereof (a "Section 11(a) (ii) Event"), proper
provision shall be made so that each holder of a Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of the number of Units of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section
11(a) (ii) Event, such number of shares of Company Common Stock as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
then number of Units of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a) (ii) Event (such
product thereafter being, for all purposes of this Agreement other than Section
13 hereof, the "Purchase Price"), and (y) dividing that product by 50% of the
then current market price (determined pursuant to Section 11(d) hereof) per
share of Company Common Stock on the date of such first occurrence (such number
of shares being the "Adjustment Shares").
(iii) In the event that the number of shares of Company Common Stock
which are authorized by the Company's Charter 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) of this Section 11(a), the Company, by a vote of the
majority of the Independent Directors, shall: (A) determine the excess of (1)
the value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess being the "Spread"),
and (B) with respect to each Right, make adequate provision
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<PAGE> 25
to substitute for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common Stock
or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such shares of preferred stock
being "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, after receiving advice from a nationally
recognized investment banking firm; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the later of (x) the first occurrence of a Section
11(a) (ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a) (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 Company Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash shall
have an aggregate value equal to the Spread. To the extent that the Company
determines that some action need be taken pursuant to the first sentence of this
Section 11(a)(iii), the Company shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights. For purposes
of this Section 11(a)(iii), the value of the Company Common Stock shall be the
current market price (as determined pursuant to Section 11(d) hereof) per share
of Company 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
Company Common Stock on such date.
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(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 to
subscribe for or purchase (for a period expiring within forty-five calendar days
after such record date) Preferred Stock (or shares having the same rights,
privileges and preferences as shares of Preferred Stock ("equivalent preferred
stock")) or securities convertible into Preferred Stock or equivalent preferred
stock at a price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock) less than the
current market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the sum of the number of shares of Preferred Stock outstanding on such
record date plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock 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 may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by a majority of the Independent Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by
or
23
<PAGE> 27
held for the account of the Company or any Subsidiary shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of shares of Preferred Stock (including any such distribution made
in connection with a share exchange or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Preferred Stock but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date less the fair market value (as determined in good
faith by a majority of the Independent Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the denominator of
which shall be such current market price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall
24
<PAGE> 28
be adjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Company Common
Stock for the thirty consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, if prior to the
expiration of such requisite thirty Trading Day period the issuer announces
either (A) a dividend or distribution on such Company Common Stock payable in
such Company Common Stock or securities convertible into such Company Common
Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Company Common Stock then, following the ex-dividend
date for such dividend or the record date for such subdivision, as the case may
be, the "current market price" shall be properly adjusted to take into account
such event. The closing price for each day shall be, if the shares of Company
Common Stock are listed and admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such shares are listed or admitted to trading or, if such shares of
Company Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted sales 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 such shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the shares of Company Common Stock selected by a majority of the
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Independent Directors. If on any such date no market maker is making a market in
such shares, the fair value of such shares on such date as determined in good
faith by a majority of the Independent Directors shall be used. If the shares of
Company Common Stock are not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share as determined in
good faith by a majority of the Independent Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. The term "Trading Day" shall mean a Business Day or, if such
shares are listed or admitted to trading on any national securities exchange, a
day on which the principal national securities exchange on which such shares are
listed or admitted to trading is open for the transaction of business.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for Company Common Stock in clause (i) of this
Section 11(d) (other than the fourth sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 100 (as such amount may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to Company Common
Stock occurring after the date of this Agreement) multiplied by the current
market price per share of Company Common Stock. If neither Company Common Stock
nor Preferred Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by a majority of the Independent Directors whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on
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the Rights Agent and the holders of the Rights. For all purposes of this
Agreement, the "current market price" of a Unit of Preferred Stock shall be
equal to the "current market price" of one share of Preferred Stock divided by
100.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (l%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into 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 Company
Common Stock or Common Stock or other share 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 Sections 11(a)
(ii) or 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
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<PAGE> 31
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one-millionth of a share) obtained by (i)
multiplying (x) the number of Units of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of Units of Preferred Stock that may be acquired upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Units of Preferred Stock for which
a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the
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<PAGE> 32
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at least ten days
later than the date of such public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
to be so distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units of Preferred Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per Unit and the number of Units of Preferred Stock
which was expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the number of Units of Preferred
Stock issuable upon exercise of the
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<PAGE> 33
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue such fully paid and nonassessable number of Units of Preferred Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment a majority of the Independent
Directors shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11,
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<PAGE> 34
hereafter made by the Company to holders of its Preferred Stock, shall not be
taxable to such holders or shall reduce the taxes payable by such holders.
(n) The Company shall not, at any time after the Distribution Date, (i)
effect a share exchange with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one transaction, or a series
of transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such share exchange, 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 share exchange, merger or sale,
the Person which constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have distributed or otherwise transferred
to its shareholders or other persons holding an equity interest in such Person
Rights previously owned by such Person or any of, its Affiliates and Associates;
provided, however, this Section 11(a) shall not affect the ability of any
Subsidiary of the Company to effect a share exchange with, merge with or into,
or sell or transfer assets or earning power to, any other Subsidiary of the
Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to
take) any action if at the time such action
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<PAGE> 35
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Company Common Stock payable in shares of Company Common
Stock, (ii) subdivide the outstanding shares of Company Common Stock, (iii)
combine the outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
Company Common Stock (including any such reclassification in connection with a
share exchange or merger in which the Company is not the continuing or surviving
corporation), the number of Rights associated with each share of Company Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Company Common Stock following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Company Common Stock immediately prior to
such event by a fraction the numerator of which shall be the total number of
shares of Company Common Stock outstanding immediately prior to the occurrence
of the event and the denominator of which shall be the total number of shares of
Company Common Stock outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
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<PAGE> 36
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 25 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
Section 13. Share Exchange, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly, either (x) the Company shall effect a share exchange
with, or merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of such share
exchange or merger, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall effect a share
exchange with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such share exchange or merger and, in
connection with such share exchange or merger, all or part of the outstanding
shares of Company Common Stock shall be converted into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) to any Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), in one or more transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) (any such event being a "Section
13 Event"), then, and in each such case, proper provision shall be made so that:
(i) each holder of a
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<PAGE> 37
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
such number of validly authorized and issued, fully paid and nonassessable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), which shares shall not be subject to any liens, encumbrances, rights
of first refusal, transfer restrictions or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase Price
by the number of Units of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a) (ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such Units for which a Right would be
exercisable hereunder but for the occurrence of such Section 11(a) (ii) Event by
the Purchase Price which would be in effect hereunder but for such first
occurrence) and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be the "Purchase Price" for all purposes of this
Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of the Common Stock of such Principal Party on
the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such transaction as may
be necessary to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights;
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and (v) the provisions of Section 11(a) (ii) hereof shall be of no further
effect following the first occurrence of any Section 13 Event.
(a) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger or share exchange, or, if there is more than
one such issuer, the issuer of Common Stock that has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof) and (B) if no securities are so issued, the Person that is the
other party to such merger or share exchange, or, if there is more than
one such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the largest portion of the assets or earning power transferred pursuant
to such transaction or transactions, or, if each Person that is a party
to such transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the
assets or earning power cannot be determined, whichever Person the
Common Stock of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); provided, however, that
in any such case, (1) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act ("Registered
Common Stock"), or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary
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<PAGE> 39
of another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common
Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is a direct or indirect Subsidiary
of another Person but is not a direct or indirect Subsidiary of another
Person which has Registered Common Stock outstanding, "Principal Party"
shall refer to the ultimate parent entity of such first-mentioned
Person; (3) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is directly
or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal
Party" shall refer to whichever of such other Persons is the issuer of
the Registered Common Stock having the highest aggregate current market
price (determined pursuant to Section 11(d) hereof); and (4) if the
Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such other Persons have
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever ultimate parent entity is the corporation having the greatest
stockholders equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the
entity having the greatest net assets.
(b) The Company shall not consummate any such share exchange, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with 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
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<PAGE> 40
set forth in paragraphs (a) and (b) of this Section 13 anal further providing
that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with respect to the Common Stock that may be
acquired upon exercise of the Rights, (B) cause such registration
statement to remain effective (and to include a prospectus complying
with the requirement of the Securities Act) until the Expiration Date,
and (C) as soon as practicable following the execution of such
agreement, take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state security or "blue sky" laws; and
(ii) 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.
(c) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has provision in any of its authorized securities
or in its Charter or Bylaws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue, in connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of Common Stock of such
Principal Party at less than the then current market price per share (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such then current market
price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the
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<PAGE> 41
Common Stock of such Principal Party pursuant to the provisions of Section 13;
then, in such event, the Company shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or share exchanges or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a) (ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the Persons to which such
fractional Rights would otherwise be issuable, an amount in cash equal to such
fraction of the market value of a whole Right. For purposes of this Section
14(a), the market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be, if the Rights are listed or admitted to trading on
a national securities exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities
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<PAGE> 42
exchange, the last quoted sales price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by a majority of the Independent Directors. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by a majority of the Independent Directors
shall be used and such determination shall be described in a statement filed
with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of such fractional shares of Preferred Stock
that are not integral multiples of one one-hundredth of a share, the Company may
pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
then current market value of one one-hundredth of a share of Preferred Stock.
For purposes of this Section 14(b), the current market value of one
one-hundredth of a share of Preferred Stock shall be the closing price of one
one-hundredth of a share of Preferred Stock (as the term "closing price" is used
in Section 11(d) hereof) for the Trading Day immediately prior to the date of
such exercise.
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<PAGE> 43
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
other Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
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Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be transferable
only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock Certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or any other
Person as a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or
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<PAGE> 45
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of 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 Rights Certificate be construed to confer upon the
holder of any Rights 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, except as provided in Section 24 hereof, to
receive notice of meetings or other actions affecting shareholders, or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses, including reasonable
fees and disbursements of its counsel, incurred in connection with the execution
and administration of this Agreement and the exercise and performance of its
duties hereunder. The Company shall indemnify the Rights Agent, its directors,
officers, employees and agents for, and hold each of them harmless against, any
losses, expenses,
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<PAGE> 46
claims, damages or liabilities incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent or such other indemnified party in connection with the
acceptance and administration of this Agreement and performance hereunder,
including without limitation the costs and expenses of defending against any
claim of liability therefrom, directly or indirectly and will promptly reimburse
the Rights Agent and such other indemnified parties for legal and other expenses
reasonably incurred in defending any such loss, expense, claim, damage or
liability.
(b) The Rights Agent shall be protected by the indemnity provided by
this Section and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for Preferred
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
(c) The indemnity provided in this Section 18 shall survive the
expiration of the Rights, the resignation or removal of the Rights Agent and the
termination of this Agreement.
Section 19. Merger or Share Exchange or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may effect a share exchange, or any
corporation resulting from any merger or share exchange to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services businesses of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement
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<PAGE> 47
without the execution or filing of any document or any further act on the part
of any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and
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<PAGE> 48
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; provided, however, that so long as the Rights Agent has
been notified that any Person is an Acquiring Person hereunder, such certificate
shall be signed and delivered by a majority of the Independent Directors; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(d) The Rights Agent shall not have any responsibility for the validity
or legality of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or for the validity, legality or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or failure
by the
45
<PAGE> 49
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Preferred Stock or any
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or any other
securities will, when so issued, be validly authorized and issued, fully paid
and nonassessable.
(e) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the performance by the Rights Agent of its duties under this
Agreement.
(f) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable to the Company, the holder of any Rights
Certificate or any shareholder of the Company for any action taken or suffered
to be taken by it in good faith in accordance with instructions of any such
officer or for any delay in acting while awaiting instructions; provided,
however, that so long as the Rights Agent has been notified that any Person is
an Acquiring Person
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<PAGE> 50
hereunder, the Rights Agent shall accept such instructions and advice only from
a majority of the Independent Directors and shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with such
instructions of the majority of the Independent Directors or for any delay in
acting while awaiting instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.
(g) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or offer
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.
(h) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the
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<PAGE> 51
Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct if the
Rights Agent was not grossly negligent in the selection and continued employment
thereof.
(i) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent in its sole judgment shall have reasonable grounds for
believing that repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not.
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with the
Company. If such certificate has been completed and signed, the Rights Agent may
assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) hereof and shall not be charged
with any knowledge to the contrary.
(k) The Rights Agent undertakes only the express duties and obligations
imposed on it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent.
(l) Anything in this Agreement to the contrary notwithstanding, in no
event shall the
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Rights Agent be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits).
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' notice in writing mailed to the Company, and to each transfer
agent of the Preferred Stock and the Company Common Stock, by registered or
certified mail, and to the holders of Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
day's notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Preferred Stock and the
Company Common Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or any state of the United States in good standing and may
be the Company or a Subsidiary of the Company. 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
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successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Preferred Stock and the Company Common Stock, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a majority of the Independent Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement
in the Purchase Price or the number or kind or class of shares or other
securities or property that may be acquired under the Rights Certificates. In
addition, in connection with the issuance or sale of shares of Company Common
Stock following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to shares of Company Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Independent Directors, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material
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<PAGE> 54
adverse tax consequences to the Company or the person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) Subject to Section 30 hereof, the Company may, at its option, by
action of a majority of the Independent Directors, at any time prior to the
earlier of (i) the Close of Business on the Final Expiration Date, or (ii) the
Close of Business on the tenth day following the Stock Acquisition Date, redeem
all but not less than all of the then outstanding Rights at a redemption price
of $.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being the "Redemption Price"), and the Company
may, at its option, by action of a majority of the Independent Directors, pay
the Redemption Price either in shares of Company Common Stock (based on the
"current market price", as defined in Section 11(d) hereof, of the shares of
Company Common Stock at the time of redemption) or cash.
(b) Immediately upon the action of a majority of the Independent
Directors ordering the redemption of the Rights, evidence of which shall be
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of a majority of the Independent
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the
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registry books of the transfer agent for Company Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), (iv) to effect any share exchange or merger into or
with any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(0) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or
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the date on which such reclassification, share exchange, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier; provided, however, no such notice shall be
required pursuant to this Section 24, if any Subsidiary of the Company effects a
share exchange or merger with or into, or effects a sale or other transfer of
assets or earnings power to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a) (ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a) (ii) hereof.
Section 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
telex, telegram or cable) and mailed or sent or delivered, if to the Company, at
its address at:
First Community Corporation
809 West Main Street
Rogersville, Tennessee 37857
And if to the Rights Agent, at its address at:
First Union National Bank
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1525 West W. T. Harris Boulevard, 3C3
Charlotte, North Carolina 28288-1153
Attention: Shareholder Services Group
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Company Common Stock; provided, however, that any
supplement or amendment which changes the rights or duties of the Rights Agent
under this Agreement shall be effective only with the consent of the Rights
Agent. From and after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
be consistent with, and for the purpose of fulfilling, the objectives of the
Board of Directors adopting this Agreement; provided, however, that from and
after such time as any Person becomes an Acquiring Person, this Agreement shall
not be amended in any manner which
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would adversely affect the interests of the holders of Rights, and provided,
however, this Agreement may not be supplemented or amended to lengthen, pursuant
to clause (iii) of this sentence, (A) subject to Section 30 hereof, a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Without limiting the foregoing, the Company
may at any time prior to such time as any Person becomes an Acquiring Person
amend this Agreement to change the Purchase Price hereunder. Upon the delivery
of a certificate from an appropriate officer of the Company or, so long as the
Rights Agent has been notified that any Person is an Acquiring Person hereunder,
from the majority of the Independent Directors which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Purchase Price, the
Expiration Date or the number of Units of Preferred Stock for which a Right is
exercisable without the approval of a majority of the Independent Directors.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Company Common Stock.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding
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at any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Company Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d) (1) (i) of the Exchange Act Regulations as in effect
on the date hereof. Except as otherwise specifically provided herein, the Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power (i) to interpret the provisions of this Agreement, and (ii) to make
all determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board or by a majority of the
Independent Directors in good faith shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board or any member thereof to any liability to
the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
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Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Independent Directors determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by a majority of the Independent Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Tennessee applicable to contracts executed in and
to be performed entirely in such State.
Section 32. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same instrument.
Section 33. Descriptive Headings. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
First Community Corporation
By: /s/ Mark A. Gamble
--------------------------------------------
Name: Mark A. Gamble
--------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
First Union National Bank
By: /s/ James M. Clark
-------------------------------------------
Name: James M. Clark
-------------------------------------
Title: Corporate Trust Officer
------------------------------------
Attachment: Schedule A
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EXHIBIT A
[Form of Rights Certificate]
Certificate No. _________________ ______________Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED
IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT].*
Rights Certificate
First Community Corporation
This certifies that ______________________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated April 26, 2000 (the "Rights Agreement") between First
Community Corporation, a Tennessee corporation (the "Company"), and First Union
National Bank, as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent under the Rights Agreement), to _____________________ *
The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
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purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to the Expiration Date (as such
term is defined in the Rights Agreement) at the office of the Rights Agent or
its successor designated for such purpose, one one-hundredth of a fully paid
nonassessable share of Series A Junior Preferred Stock, no par value (the
"Preferred Stock"), of the Company at the Purchase Price initially of $32.00 per
one one-hundredth share (each such one one-hundredth of a share being a "Unit")
of Preferred Stock, upon presentation and surrender of this Rights Certificate
with the Election to Purchase and related certificate duly executed. The number
of Rights evidenced by this Rights Certificate(and the number of Units which may
be purchased upon exercise thereof) set forth above, and the Purchase Price per
Unit set forth above shall be subject to adjustment in certain events as
provided in the Rights Agreement.
Upon the occurrence of a Section 11(a) (ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement) or, under certain circumstances described in the Rights Agreement, a
transferee of any such Acquiring Person, Associate or Affiliate, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a) (ii)
Event.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive cash or other assets, all
as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions
of the Rights Agreement, which terms and conditions are hereby incorporated
herein by reference and made a part hereof and
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to which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the principal office of the Company and
are available from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company under certain circumstances
at its option at a redemption price of $.01 per Right, payable at the Company's
option in cash or in common stock of the Company, subject to adjustment in
certain events as provided in the Rights Agreement.
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 Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or
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herein be construed to confer upon the holder hereof, 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 shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of________________________________ , 200_.
ATTEST: First Community Corporation
By:
- ------------------------------------ -----------------------------------
Title: Title:
----------------------------- --------------------------------
Countersigned:
- ----------------------------------
By:
--------------------------------
Authorized Signature
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED _____________________________________________hereby sells,
assigns and transfers unto ____________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ____________________, 20____.
------------------------------------------
Signature
Signature Guaranteed:
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<PAGE> 67
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 2000
------------------ ------------------------------------
Signature
Signature Guaranteed:
NOTICE
This signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signature must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
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<PAGE> 68
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate)
To: First Community Corporation
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Rights Certificate to purchase the Units of Preferred
Stock, issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such Units be issued in the name of
and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security or other identifying number: _____________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security or other identifying number: _____________________
Dated: , 20
------------------ --- ------------------------------------
Signature
Signature Guaranteed:
- -----------------------------
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<PAGE> 69
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: , 20
------------------ --- ------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signature must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
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<PAGE> 70
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The Board of Directors of First Community Corporation (the "Company")
has declared a distribution of one Right for each outstanding share of Common
Stock, no par value (the "Company Common Stock"), to shareholders of record at
the close of business on May 4, 2000 and for each share of Company Common Stock
issued (including shares distributed from Treasury) by the Company thereafter
and prior to the Distribution Date. Each Right entitles the registered holder,
subject to the terms of the Rights Agreement to purchase from the Company one
one-hundredth of a share (a Unit") of Series A Junior Preferred Stock, no par
value (the "Preferred Stock"), at a Purchase Price of $32.00 per Unit, subject
to adjustment. The Purchase Price is payable in cash or by certified or bank
check or bank draft payable to the order of the Company. The description and
terms of the Rights are set forth in a Rights Agreement executed by the Company
and First Union National Bank, as the Rights Agent, dated April 26, 2000 (the
"Rights Agreement").
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. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights and the Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Rights Agreement and the exhibits thereto, including the definitions therein
of certain terms, which Rights Agreement and exhibits are incorporated herein by
reference.
The Rights Agreement
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights Certificates
will be distributed. The Rights will separate from the Company Common Stock, and
the Distribution Date will occur, upon the earlier of (i) 10 days following
public announcement (the date of such announcement being the "Stock Acquisition
Date") that a person or group of affiliated or associated persons (other than
the Company, any Subsidiary of the Company, any shareholder of the Company who,
as of the date of the Rights Agreement, owned or had the right to acquire 20% or
more of the shares of Company Common Stock, or any employee benefit plan of the
Company or a Subsidiary) has acquired, obtained the right to acquire, or
otherwise obtained beneficial ownership of 20% or more of the then outstanding
shares of Company Common Stock, or (ii) 10 days following the commencement of a
tender or exchange offer that would result in a person or group beneficially
owning 20% or more of the then outstanding shares of Company Common Stock. Until
the Distribution Date, (i) the Rights will be evidenced by Company Common Stock
certificates and will be transferred with and only with such Company Common
Stock certificates, (ii) new Company Common Stock certificates issued after May
4, 2000 (also including shares distributed from Treasury) will contain a
notation incorporating the Rights Agreement by reference, and (iii) the
surrender for transfer of any certificates representing
<PAGE> 71
outstanding Company Common Stock will also constitute the transfer of the Rights
associated with the Company Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on May 4, 2010, unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) a Person (other than the Company, any Subsidiary
of the Company, any shareholder of the Company who, as of the date of the Rights
Agreement, was the Beneficial Owner of 20% or more of the shares of Company
Common Stock, or any employee benefit plan of the Company or a Subsidiary)
becomes the Beneficial owner of 20% or more of the then outstanding shares of
Company Common Stock or (ii) during the pendency of any tender or exchange offer
for Company Common Stock or prior to the expiration of 20 business days (or such
later date as a majority of the Independent Directors may determine) after the
date such tender or exchange offer is terminated or expires, a Person becomes
the Beneficial Owner of 10% or more of the then outstanding shares of Company
Common Stock (unless under certain circumstances specified in the Rights
Agreement), then, in each such case, each holder of a Right will thereafter have
the right to receive, upon exercise, Company 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. The exercise price is the
Purchase Price multiplied by the number of Units of Preferred Stock issuable
upon exercise of a Right prior to the events described in this paragraph.
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.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person effects a share
exchange or merger with the Company and all or part of Company Common Stock is
converted or exchanged for securities, cash or property of any other Person or
(iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the Acquiring Person having a value equal to two times
the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market
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<PAGE> 72
price of the Preferred Stock, or (iii) upon the distribution to the holders of
the Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time prior to the earlier of (i) the Close of Business on the
Final Expiration Date or (ii) the close of business on the tenth day following
the Stock Acquisition Date, a majority of the Independent Directors may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), payable, at the election of such majority of Independent
Directors, in cash or shares of Company Common Stock. Immediately upon the
action of a majority of the Independent Directors ordering the redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be supplemented or
amended at any time prior to the Distribution Date without the consent of the
holders of the certificates representing shares of Company Common Stock. After
the Distribution Date, the provisions of the Rights Agreement may be
supplemented or amended without the consent of the holders of the Rights in
order to cure any ambiguity, defect or inconsistency, to make changes which are
consistent with the objectives of the Board in adopting the Rights Agreement
(except that from and after such time as any Person becomes an Acquiring Person,
no such amendment may adversely affect the interests of holders of Rights), or
to shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend rate of $.01 per Unit but will, in any event, be entitled to a dividend
equal to the per share dividend declared on the Company Common Stock.
3
<PAGE> 73
In the event of liquidation, the holder of a Unit of Preferred Stock
will receive a preferred liquidation payment equal to the greater of $32.00 per
Unit or the per share amount paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with
the Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, share exchange or other transaction in
which shares of Company Common Stock are exchanged, each Unit of Preferred Stock
will be entitled to receive the per share amount paid in respect of each share
of Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation
and voting, and in the event of mergers and share exchanges, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
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<PAGE> 74
EXHIBIT C
ARTICLES OF AMENDMENT SETTING FORTH THE VOTING POWERS,
DESIGNATION, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE SERIES A JUNIOR
PREFERRED STOCK
----------------------------------------------
Articles of Amendment to the Charter
of
First Community Corporation
------------------------------------------------
Pursuant to the provisions of Sections 48-16-102 and 48-16-106 of the
Tennessee Business Corporation Act, as amended, the undersigned corporation
adopts the following articles of amendment to its charter:
1. The name of the corporation is First Community Corporation
2. A new Article 10 is added to the Charter to read in its
entirety as follows:
10. Series A Junior Preferred Stock. Pursuant to the
authority vested in the Board of Directors in accordance with
the provisions of sub-paragraph 6(c) of the Charter, the Board
of Directors does hereby create, authorize and provide for the
issuance of Series A Junior Preferred Stock out of the class
of 1,000,000 shares of preferred stock, no par value (the
"Preferred Stock"), having the voting powers, designation,
relative, participating, optional and other special rights,
preferences, and qualifications, limitations and restrictions
thereof that are set forth as follows:
1. Designation and Amount. The shares of such series
shall be designated as Series A Junior Preferred Stock
("Series A Preferred Stock") and the number of shares
constituting such series shall be 300,000. Such number of
shares may be adjusted by appropriate action of the Board of
Directors.
2. Dividends and Distributions. (a) Subject to the
prior and superior rights of the holders of any shares of any
other series of
1
<PAGE> 75
Preferred Stock or any other shares of preferred stock of the
Corporation ranking prior and superior to the shares of Series
A Preferred Stock with respect to dividends, each holder of
one one-hundredth (1/100) of a share (a "Unit") of Series A
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally
available for that purpose, (i) quarterly dividends payable in
cash on the lst day of January, April, July and October in
each year (each such date being a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of such Unit of Series A
Preferred Stock, in an amount per Unit (rounded to the nearest
cent) equal to the greater of (x) $.01 or (y) subject to the
provision for adjustment hereinafter set forth, the aggregate
per share amount of all cash dividends declared on shares of
the common stock of the Corporation, no par value, (the
"Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of a Unit of
Series A Preferred Stock, and (ii) subject to the provision
for adjustment hereinafter set forth, quarterly distributions
(payable in kind) on each Quarterly Dividend Payment Date in
an amount per Unit equal to the aggregate per share amount of
all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock, by reclassification or
otherwise) declared on shares of Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or with
respect to the first Quarterly Dividend Payment Date, since
the first issuance of a Unit of Series A Preferred Stock. In
the event that the Corporation shall at any time after May 4,
2000, (the "Rights Declaration Date") (i) declare or pay any
dividend on outstanding shares of Common Stock payable in
shares of Common Stock, or (ii) subdivide outstanding shares
of Common stock or (iii) combine outstanding shares of Common
Stock into a smaller number of shares, then in each such case
the amount to which the holder of a Unit of Series A Preferred
Stock was entitled immediately prior to such event pursuant to
the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which shall be the
number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall, declare a dividend or
distribution on Units of Series A Preferred Stock as provided
in
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<PAGE> 76
paragraph (a) above immediately after it declares a dividend
or distribution on the shares of Common Stock (other than a
dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $.01
per Unit on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and shall be
cumulative on each outstanding Unit of Series A Preferred
Stock from the Quarterly Dividend Payment Date next preceding
the date of issuance of such Unit of Series A Preferred Stock,
unless the date of issuance of such Unit is prior to the
record date for the first Quarterly Dividend Payment Date, in
which case, dividends on such Unit shall begin to accrue from
the date of issuance of such Unit, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of
Units of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on Units of Series A Preferred Stock in an
amount less than the aggregate amount of all such dividends at
the time accrued and payable on such Units shall be allocated
pro rata on a unit-by-unit basis among all Units of Series A
Preferred Stock at the time outstanding. The Board of
Directors may fix a record date for the determination of
holders of Units of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior
to the date fixed for the payment thereof.
3. Voting Rights. The holders of Units of Series A
Preferred Stock shall have the following voting rights.
(a) Subject to the provision for adjustment
hereinafter set forth, each Unit of Series A Preferred Stock
shall entitle the holder thereof to one vote on all matters
submitted to a vote of the shareholders of the Corporation. In
the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii)
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<PAGE> 77
combine the outstanding shares of Common Stock into a smaller
number of shares, then in each such case the number of votes
per Unit to which holders of Units of Series A Preferred Stock
were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the
numerator of which shall be the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law,
the holders of Units of Series A Preferred Stock and the
holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of shareholders of
the Corporation.
(c) (i) If at any time dividends on any Units of
Series A Preferred Stock shall be in arrears in an amount
equal to six quarterly dividends thereon, then during the
period (a "default period") from the occurrence of such event
until such time as all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current
quarterly dividend period on all Units of Series A Preferred
Stock then outstanding shall have been declared and paid or
set apart for payment, all holders of Units of Series A
Preferred Stock, voting separately as a class, shall have the
right, at the next meeting of shareholders called for the
election of directors (the "Next Meeting"), to elect two
directors (the "New Directors" or individually, "New
Director"), which directors shall be in addition to the number
previously set by the Board of Directors pursuant to Article
III of the By-Laws. One of the New Directors shall serve as a
member of the class of directors being elected for a
three-year term and the other New Director shall serve as a
member of the class of directors whose remaining term at the
Next Meeting is two years and until their successors are
elected by such holders and qualified or their earlier
resignation, removal or incapacity or until such earlier time
as all accrued and unpaid dividends upon the outstanding Units
of Series A Preferred Stock shall have been paid (or set aside
for payment) in full. The New Directors may be removed and
replaced by such holders, and vacancies in such directorships
may be filled only by such holders (or the remaining director
elected by such holders if there be one) in the manner
permitted by law. After the holders of Units of Series A
Preferred Stock have exercised their right to elect directors
during any default period, the number of directors shall not
be increased or decreased except as approved by a vote of the
holders of
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<PAGE> 78
Units of Series A Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior
to the Series A Preferred Stock.
(ii) Immediately upon the expiration of a default
period (x) the right of holders of Units of Series A Preferred
Stock as a separate class to elect directors shall cease, (y)
the term of any directors elected by the holders of Units of
Series A Preferred Stock as a separate class shall terminate,
and (z) the number of directors shall be such number as may be
provided for prior to any increase made pursuant to the
provisions of paragraph (c)(i) of this paragraph 3 (such
number being subject, however, to change thereafter in any
manner provided by law or in the Charter or By-Laws). Any
vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining directors.
(iii) The provisions of this paragraph (c) shall
govern the election of directors by holders of Units of Series
A Preferred Stock during any default period notwithstanding
any provisions of the Charter to the contrary.
(d) Except as set forth herein or required by law,
holders of Units of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders
of shares of Common Stock as set forth herein) for the taking
of any corporate action.
4. Certain Restrictions. (a) Whenever quarterly
dividends or other dividends or distributions payable on Units
of Series A Preferred Stock as provided in paragraph 2 are in
arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on outstanding
Units of Series A Preferred Stock shall have been paid (or set
aside for payment) in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
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<PAGE> 79
dividends with the Series A Preferred Stock, except for
dividends paid ratably on Units of Series A Preferred Stock
and shares of all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to
which the holders of such Units and all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, provided, however, that
the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares
of any stock ranking junior (both as to dividends and upon
liquidation, dissolution or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any Units of Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
Units.
(b) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this paragraph
4, purchase or otherwise acquire such shares at such time and
in such manner.
5. Reacquired Shares. Any Units of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such Units shall, upon
their cancellation, become authorized but unissued Units of
Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (a) Upon
any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, no distribution shall be made
(i) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless the holders of
Units of Series A Preferred Stock shall have received, subject
to adjustment as hereinafter provided in paragraph (b), the
greater of either (y) $32.00 per Unit plus an amount equal to
accrued
6
<PAGE> 80
and unpaid dividends and distributions thereon, whether or not
earned or declared, to the date of such payment, or (z) the
amount equal to the aggregate per share amount to be
distributed to holders of shares of Common Stock, or (ii) to
the holders of shares of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series A
Preferred Stock, unless simultaneously therewith distributions
are made ratably on Units of Series A Preferred Stock and all
other shares of such parity stock in proportion to the total
amounts to which the holders of Units of Series A Preferred
Stock are entitled under clause (i) (y) of this sentence and
to which the holders of shares of such parity stock are
entitled, in each case upon such liquidation, dissolution or
winding up.
(b) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common
Stock, or (ii) subdivide outstanding shares of Common Stock,
or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case the aggregate
amount to which holders of Units of Series A Preferred Stock
were entitled immediately prior to such event pursuant to
clause (i) (z) of paragraph (a) of this paragraph 6 shall be
adjusted by multiplying such amount by a fraction, the
numerator of which shall be the number of shares of Common
Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such
event.
7. Share Exchange, Merger, Etc. In case the
Corporation shall enter into any share exchange, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such
case Units of Series A Preferred Stock shall at the same time
be similarly exchanged for or converted into an amount per
Unit (subject to the provision for adjustment hereinafter set
forth) equal to the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is
converted or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in
shares of Common Stock, or (ii) subdivide outstanding shares
of Common Stock, or (iii) combine outstanding Common Stock
into a smaller number of shares, then in each such case the
amount set forth in the immediately preceding
7
<PAGE> 81
sentence with respect to the exchange or conversion of shares
of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which shall be the
number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. Redemption. The Units of Series A Preferred Stock
shall not be redeemable at the option of the Corporation or
any holder thereof. Notwithstanding the foregoing sentence of
this Section, the Corporation may acquire Units of Series A
Preferred Stock in any other manner permitted by law and the
Charter or by-laws of the Corporation.
9. Ranking. The Units of Series A Preferred Stock
shall rank junior to all other series of the Preferred Stock
and to any other class of preferred stock that hereafter may
be issued by the Corporation as to the payment of dividends
and the distribution of assets, unless the terms of any such
series or class shall provide otherwise.
10. Amendment. The Charter, including without
limitation the provisions hereof, shall not hereafter be
amended, either directly or indirectly, or through merger or
share exchange with another corporation, in any manner that
would alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect the
holders thereof adversely without the affirmative vote of the
holders of a majority or more of the outstanding Units of
Series A Preferred Stock, voting separately as a class.
11. Fractional Shares. The Series A Preferred Stock
may be issued in Units or other fractions of a share, which
Units or fractions shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have
the benefit of all other rights of holders of Series A
Preferred Stock.
3. The Corporation is a for-profit corporation.
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4. The amendment was duly adopted on April 26, 2000, by the board of
directors without shareholder approval as such is not required.
ATTEST: First Community Corporation
By:
- ---------------------------- --------------------------------------
Title: Secretary Title
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EXHIBIT 2
FOR IMMEDIATE RELEASE
FIRST COMMUNITY CORPORATION
ANNOUNCES SHAREHOLDER RIGHTS PLAN
May 22, 2000
Rogersville, Tennessee -- The First Community Corporation Board of
Directors has declared a distribution of one Junior Preferred Stock Purchase
Right for each outstanding share of First Community Common Stock. The
distribution of the Rights is designed to deter coercive takeover tactics and
help prevent partial tender offers and other abusive tactics to gain control of
First Community without dealing with all shareholders on a fair and equal basis.
Shareholders received the Junior Preferred Stock Purchase Rights as a
dividend at the rate of one Right for each share of Common Stock held as of the
close of business on May 4, 2000.
Each Right will entitle the shareholder, under alternative
circumstances, to buy either securities of First Community or securities of the
acquiring company (depending on the form of the transaction) at an exercise
price that will be half of the market value of such securities at the time.
The Rights can be exercised only if a person or group acquires 20
percent or more of the company's outstanding Common Stock or launches a tender
or exchange offer that would result in ownership of 20 percent or more of the
company's outstanding Common Stock.
Each Right that is not owned by a holder of 20 percent (10 percent in
certain circumstances) of First Community Common Stock entitles its holder to
purchase a number of shares of First Community Common Stock at a price equal to
half of the stock's then market
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value. A shareholder may exercise rights in this manner if any person acquires
20 percent or more of the company's outstanding Common Stock.
Alternatively, if First Community is involved in a business combination
in which First Community itself is not the survivor, or if the company sells 50
percent or more of its assets or earning power to another person, then each
Right takes the form of a right to purchase a number of shares of the acquiring
company's common stock at a price equal to half of that stock's then market
value.
At any time prior to a person acquiring 20 percent or more of its
Common Stock and for a period of 10 days following the public announcement of
such acquisition, the company will be entitled to redeem the Rights at one cent
per Right. The Rights expire on May 4, 2010.
First Community Corporation's sole subsidiary, First Community Bank,
has approximately $113 million in assets and serves customers throughout Hawkins
County from its offices in Rogersville and Church Hill. The common stock of
First Community Corporation is not traded on any established exchange or in the
over-the-counter market.
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