PH02/150062.5
Exhibit 4.1
PLAYERS INTERNATIONAL, INC.
and
INTERWEST TRANSFER CO., INC.
as Rights Agent
RIGHTS AGREEMENT
Dated as of January 27, 1997
Table of Contents
Section Page
1. Certain Definitions. 2
2. Appointment of Rights Agent. 5
3. Issue of Rights Certificates. 6
4. Form of Rights Certificates. 8
5. Countersignature and Registration. 9
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates. 9
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. 10
8. Cancellation and Destruction of Rights Certificates. 13
9. Reservation and Availability of Capital Stock; Registration
of Securities. 13
10. Capital Stock Record Date. 14
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. 15
12. Certificate of Adjusted Purchase Price or Number of Shares25
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. 26
14. Fractional Rights and Fractional Shares. 29
15. Rights of Action. 30
16. Agreement of Rights Holders. 30
17. Rights Certificate Holder Not Deemed a Stockholder. 31
18. Concerning the Rights Agent. 32
19. Merger or Consolidation or Change of Name of Rights Agent.32
20. Duties of Rights Agent. 33
21. Change of Rights Agent. 35
23. Redemption and Termination. 37
24. Notice of Certain Events. 39
25. Notices. 39
26. Supplements and Amendments. 40
27. Successors. 41
28. Determinations and Actions by the Board of Directors, etc.41
29. Benefits of this Agreement. 42
30. Severability. 42
31. Governing Law. 43
32. Counterparts. 43
33. Descriptive Headings. 43
Exhibit A Resolution of the Board of Directors with respect to
Series A Junior Participating Preferred Shares
Exhibit B Form of Rights Certificate
RIGHTS AGREEMENT
RIGHTS AGREEMENT, (the "Agreement"), between PLAYERS
INTERNATIONAL, INC., a Nevada corporation (the "Company"), and
Interwest Transfer Co., Inc. (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company
carefully considered, over a significant period of time, whether
approval of this Agreement and the distribution of the Rights (as
hereinafter defined) is in the best interests of the Company and
all other pertinent factors; and
WHEREAS, the Board of Directors of the Company, on
January 27, 1997, concluded that approval of this Agreement is in
the best interests of the Company because the existence of the
Rights will help (i) reduce the risk of coercive two-tiered,
front-end loaded or partial offers that may not offer fair value
to all stockholders, (ii) mitigate against market accumulators
who through open market and/or private purchases may achieve a
position of substantial influence or control without paying to
selling or remaining stockholders a fair control premium, (iii)
deter market accumulators who are simply interested in putting
the Company into "play," (iv) restrict self-dealing by a
substantial stockholder, and (v) preserve the Board of Directors'
bargaining power and flexibility to deal with third-party
acquirors, to pursue the business strategies of the Company and
to otherwise seek to maximize values for all stockholders; and
WHEREAS, the Board of Directors concluded that a
distribution of Rights, by way of a dividend to holders of Common
Shares (as hereinafter defined), would not be appropriate until
the gaming regulators in certain of the jurisdictions in which
the Company's subsidiaries conduct gaming operations (the "Gaming
Regulators") had concluded their review of the Agreement and
either approved or expressed no objection to the Agreement; and
WHEREAS, prior to October 16, 1997, the Gaming
Regulators concluded their review, and expressed no objection to,
the Agreement; and
WHEREAS, on October 16, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one Right for
each Common Share (as hereinafter defined) of the Company
outstanding at the close of business on October 27, 1997 (the
"Record Date") (which for these purposes shall include all Common
Shares presently entitled to receive dividends) and has
authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11(p)
hereof) for each Common Share of the Company issued between the
Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter
defined), each Right initially representing the right to purchase
one one-hundredth of a Preferred Share (as hereinafter defined)
of the Company having the rights, powers and preferences set
forth in the form of the Resolution of the Board of Directors
attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"); and
WHEREAS, the Rights will be held by the Rights Agent
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under this Agreement as trustee for the stockholders of the
Company until the Distribution Date; and
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, and intending to be
legally bound hereby, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 20% or more of the
Common Shares then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company or (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company,
or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of Common
Shares outstanding, increases the proportionate number of Common
Shares beneficially owned by such Person to 20% or more of the
Common Shares then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 20% or more of the
then outstanding Common Shares by reason of Common Shares
purchased by the Company and shall, after such share purchases by
the Company, become the Beneficial Owner of any additional Common
Shares, then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if a majority of the
Continuing Directors then in office determines in good faith that
a Person who would otherwise be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such
Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an "Acquiring Person" for
purposes of this Agreement.
(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 and in effect on the date hereof (the
"Exchange Act").
(c) A Person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) that 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) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion
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rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to
a tender offer or exchange offer made by such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for payment,
purchase or exchange, or (B) securities issuable upon
exercise of Rights at any time prior to the occurrence
of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section
3(a) 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;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange
Act), including without limitation pursuant to any
agreement, arrangement or understanding, whether or not
in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this
subparagraph (ii) as a result of an oral or written
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor
report); or
(iii) that are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of
the Company;
provided, however, that nothing in this paragraph (c) shall cause
a person engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in good
faith in a firm commitment underwriting until the expiration of
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forty days after the date of such acquisition.
(d) "Business Day" shall mean any day other than
a Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(e) "Close of business" on any given date shall
mean 5:00 P.M., New York, New York time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., New York, New York time, on the next succeeding
Business Day.
(f) "Common Share" shall mean a share of Common
Stock, par value $.005 per share, of the Company and, to the
extent that there are not a sufficient number of Common Shares
authorized to permit the full exercise of the Rights, shares of
any other class or series of the Company designated for such
purpose containing terms substantially similar to the terms of
the Common Shares, except that "Common Share" when used with
reference to any Person other than the Company shall mean the
shares of capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(g) "Continuing Director" shall mean (i) any
member of the Board of Directors of the Company, while such
Person is a member of the Board, who is not an Acquiring Person,
or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of
this Agreement, or (ii) any Person who subsequently becomes a
member of the Board, while such Person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors.
(h) "Distribution Date" shall have the meaning
set forth in Section 3 hereof.
(i) "Expiration Date" shall have the meaning set
forth in Section 7(a).
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(k) "Preferred Share" shall mean a share of
Series A Junior Participating Preferred Stock, no par value, of
the Company and, to the extent that there are not a sufficient
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number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, shares of
any other series of Series Preferred Stock of the Company
designated for such purpose containing terms substantially
similar to the terms of the Series A Junior Participating
Preferred Stock.
(l) "Preferred Share Fraction" shall mean one one-
hundredth of a Preferred Share.
(m) "Qualifying Offer" shall have the meaning
ascribed to such term in Section 11(a)(ii)(B).
(n) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii) (A), (B) or (C) hereof.
(o) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(p) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company
or an Acquiring Person that a Person has become an Acquiring
Person.
(q) "Subsidiary" shall have the meaning ascribed
to such term in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act.
(r) "Trading Day" shall have the meaning set
forth in Section 11(d)(i) hereof.
(s) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Unless otherwise specified, where reference is
made in this Agreement to sections of, and the General Rules and
Regulations under, the Exchange Act, such reference shall mean
such sections and rules as amended from time to time and any
successor provisions thereto.
Section 2. Appointment of Rights Agent.
(a) The Company hereby appoints the Rights Agent
to act as agent for the Company and trustee for the beneficial
owners of the Rights (who, in accordance with Section 3 hereof,
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shall prior to the Distribution Date also be the holders of the
Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable.
(b) On the Record Date, the Company will deliver
a Rights Certificate to the Rights Agent, registered in the name
of the Rights Agent as trustee for the beneficial owners of the
Rights represented thereby, for that number of Rights equal to
the number of Common Shares issued and outstanding on the Record
Date, and the Rights Agent shall hold the Rights represented
thereby in trust for the beneficial owners in accordance with the
provisions of this Agreement.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of
business on the tenth Business Day after a Stock Acquisition Date
involving an Acquiring Person that has become such in a
transaction as to which the Board of Directors has not made the
determination referred to in Section 11(a)(ii)(B) hereof, or (ii)
within ten (10) Business Days (or such later date as may be
determined by action of the Board of Directors prior to such time
as any Person becomes an Acquiring Person) after the date that a
tender or exchange offer by any person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner
of 20% or more of the Common Shares then outstanding (the earlier
of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) beneficial interests in the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Shares registered in the names of
the holders of the Common Shares (which certificates for Common
Shares shall be deemed also to be certificates for beneficial
interests in the Rights) and not by separate certificates, and
(y) the Rights and beneficial interests therein will be
transferable only in connection with the transfer of the
underlying Common Shares (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Shares as of the close of
business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more Rights
certificates, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each Common
Share so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per Common Share
has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make
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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. Upon the distribution of the Rights
Certificates as provided in this subsection (a), the trust
created hereby shall cease.
(b) With respect to certificates for the Common
Shares outstanding as of the Record Date, until the Distribution
Date, beneficial interests in the Rights will be evidenced by
such certificates for the Common Shares and the registered
holders of the Common Shares shall also be the registered holders
of the beneficial interests in the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date (as such
term is defined in Section 7 hereof), the transfer of any
certificates representing Common Shares in respect of which
Rights have been issued shall also constitute the transfer of the
Rights associated with such Common Shares. Certificates issued
after the Record Date upon the transfer of Common Shares
outstanding on the Record Date shall bear the legend set forth in
subsection (c).
(c) Except as provided in Section 22 hereof,
Rights shall be issued in respect of all Common Shares that are
issued (whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such Common Shares shall also be deemed to be
certificates for beneficial interests in the associated Rights,
and shall bear the following legend:
"This certificate also evidences a beneficial
interest in and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between
Players International, Inc. (the "Company") and
Interwest Transfer Co., Inc. (the "Rights Agent")
dated as of January 27, 1997 (the "Rights Agreement"),
and as the same may be amended from time to time, the
terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates
and beneficial interests therein 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."
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With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, beneficial interests in the Rights
associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Shares shall also be the registered
holders of beneficial interests in the associated Rights, and the
transfer of any of such certificates shall also constitute the
transfer of beneficial interests in the Rights associated with
the Common Shares represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set
forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject
to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall entitle the holders
thereof to purchase such number of Preferred Share Fractions as
shall be set forth therein at the price set forth therein (such
exercise price per Preferred Share Fraction, the "Purchase
Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights that the
Company knows are beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with
whom such Acquiring Person has any continuing oral or written
plan, agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors
of the Company has determined is part of an oral or written plan,
agreement, arrangement or understanding that has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any
Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall
8
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 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) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office or
offices designated as the appropriate place 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 names and addresses of the
respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates,
the Certificate number and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close
of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights Certificate
9
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
Preferred Share Fractions (or, following a Triggering Event,
Common Shares or other securities, cash or other assets, as the
case may be, as the Rights Certificate or Certificates
surrendered then entitled such holder or former holder in the
case of a transfer to purchase). Any registered holder desiring
to transfer, split up, combine or exchange any 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 principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained 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) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Rights Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to subsection (e), the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices
of the Rights Agent designated for such purpose, together with
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payment of the aggregate Purchase Price (except as provided in
Section 11(q) hereof) with respect to the total number of
Preferred Share Fractions (or Common Shares, other securities,
cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable (except as provided in
Section 11(q) hereof), at or prior to the earliest of (i) the
close of business on January 27, 2007 (the "Final Expiration
Date"), (ii) the consummation of a transaction contemplated by
Section 13(d) hereof, or (iii) the time at which the Rights are
redeemed or terminated as provided in Section 23 hereof (the
earlier of (i), (ii) and (iii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each Preferred Share
Fraction pursuant to the exercise of a Right shall initially be
$30, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with subsection (c).
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase
Price per Preferred Share Fraction (or Common Shares, other
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) and Section 14(b) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent for
such Shares) certificates for the total number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit some or all
of the total number of Preferred Shares issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number
of Preferred Share Fractions as are to be purchased (in which
case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) 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 certificates or 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. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made, at the election of the holder of
the Rights Certificate, (x) in cash or by certified bank check or
money order payable to the order of the Company or (y) delivery
of Rights if and to the extent authorized by Section 11(q)
hereof. In the event that the Company is obligated to issue
other securities of the Company (including Common Shares) pay
cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available
for distribution by the Rights Agent, if and when appropriate.
11
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such 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) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing oral or written plan, agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of an oral or written plan, agreement, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise; provided,
however, that the Rights held by an Acquiring Person, an
Affiliate or Associate of an Acquiring Person or the transferees
of such persons referred to above shall not be voided unless the
Acquiring Person in question or an Affiliate or Associate of such
Acquiring Person shall be involved in the transaction giving rise
to the Section 11(a)(ii) Event. The Company shall use all
reasonable efforts to insure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but neither the
Company nor the Rights Agent shall have any liability to any
holder of Rights Certificates or other Person as a result of the
Company's failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
12
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 any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company, or 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; Registration of Securities.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available for issuance upon the
exercise of outstanding Rights as many of its authorized and
unissued Preferred Shares (and, following the occurrence of a
Triggering Event, out of its authorized and unissued Common
Shares and/or other securities or out of its authorized and
issued shares held in its treasury), which together shall at all
times after the Distribution Date be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares or
other securities) issuable and deliverable upon the exercise of
the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares and other
securities reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement
or statements under the Securities Act of 1933 (the "Act"), with
respect to the securities purchasable upon exercise of the Rights
on an appropriate form or forms, (ii) cause such registration
statement or statements to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement or statements to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the earlier
13
of (A) the date as of which the Rights are no longer exercisable
for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of
this subsection (c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction shall
have been obtained.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
Preferred Shares (and, following a Triggering Event, Common
Shares or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
shares or other securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and, with
respect to Preferred Shares, Common Shares or other shares of
capital stock, fully paid and nonassessable.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of Preferred Share Fractions (or Common
Shares or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required to pay
any transfer tax that may be payable in respect of any transfer
or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of Preferred Share Fractions (or
Common Shares or other securities, as the case may be) in respect
of a name other than that of the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of Preferred Share
Fractions (or Common Shares or other securities, as the case may
be) in a name other than that of the registered holder upon the
exercise of any Rights until 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. Capital Stock Record Date. Each person in
whose name any certificate for a number of Preferred Share
Fractions (or Common Shares or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such Preferred
Share Fractions (or Common Shares or other securities, as the
14
case may be) 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 all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date
upon which the applicable transfer books of the Company are
closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on
which the applicable 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
stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or 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 shares and other 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 any security of the Company payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of Preferred
Shares or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be
entitled to receive, upon payment of the adjusted Purchase
Price, the aggregate number and kind of Preferred Shares or
capital stock, as the case may be, that, if such Right had
been exercised immediately prior to such date and at a time
when the Preferred Share transfer books were open, 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.
15
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after
the Stock Acquisition Date, directly or indirectly, (1)
shall merge into the Company or otherwise combine with
the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and
the Common Shares of the Company or other equity
securities of the Company shall remain outstanding, (2)
shall, in one transaction or a series of transactions,
transfer any assets to the Company or to any of its
Subsidiaries in exchange (in whole or in part) for
Common Shares, for shares of other equity securities of
the Company, or for securities exercisable for or
convertible into shares of equity securities of the
Company (Common Shares or otherwise) or otherwise
obtain from the Company, with or without consideration,
any additional shares of such equity securities or
securities exercisable for or convertible into shares
of such equity securities (other than pursuant to a pro
rata distribution to all holders of Common Shares), (3)
shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of
assets in one transaction or a series of transactions,
to, from or with (as the case may be) the Company or
any of its Subsidiaries, on terms and conditions less
favorable to the Company than the Company would be able
to obtain in arm's-length negotiation with an
unaffiliated third party, other than pursuant to a
Section 13 Event, (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of assets having an aggregate fair
market value of more than $5,000,000 in one transaction
or a series of transactions, to, from or with (as the
case may be) the Company or any of the Company's
Subsidiaries (other than incidental to the lines of
business, if any, engaged in as of the date hereof
between the Company and such Acquiring Person or
Associate or Affiliate), other than pursuant to a
Section 13 Event, (5) shall receive any compensation
from the Company or any of the Company's Subsidiaries
other than compensation for full-time employment as a
regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (6)
shall receive the benefit, directly or indirectly
(except proportionately as a stockholder and except if
resulting from a requirement of law or governmental
regulation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax
credits or other tax advantage provided by the Company
or any of its Subsidiaries, or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, any
16
Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such
plan) alone or together with its Affiliates and
Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner
of 20% or more of the Common Shares then outstanding,
unless the event causing the 20% threshold to be
crossed is a Section 13 Event, or is an acquisition of
Common Shares pursuant to a tender offer, share
exchange or an exchange offer for all outstanding
Common Shares at a price and on terms that provide fair
value to all stockholders, as determined by at least a
majority of the Continuing Directors, after receiving
advice from one or more nationally recognized
investment banking firms, to be in the best interests
of the Company and its stockholders and after taking
into consideration all factors that such members of the
Board of Directors deem relevant, including, without
limitation, the long-term prospects and value of the
Company and the prices and terms that such members of
the Board of Directors believe, in good faith, could
reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize
maximum value (a "Qualifying Offer"), or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or
consolidation of the Company with any of its
Subsidiaries or any other transaction or series of
transactions involving the Company or any of its
Subsidiaries, other than a Section 13 Event or series
of such Events (whether or not with or into or
otherwise involving an Acquiring Person) that has the
effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company
or any of its Subsidiaries that is directly or
indirectly beneficially owned by any Acquiring Person
or any Associate or Affiliate of any Acquiring Person,
then, promptly following the first occurrence of 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 a
number of Preferred Share Fractions, such number of Common
Shares of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then
number of Preferred Share Fractions for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by 50% of the current market
17
price (determined pursuant to Section 11(d) hereof) per
Common Share on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) In the event that the number of Common
Shares that are authorized by the Company's Articles of
Incorporation, as amended, 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 shall: (A) determine
the excess of the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") over the
Purchase Price (such excess, the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Shares of the same or a different class or
other equity securities of the Company (including, without
limitation, preferred shares or units of preferred shares
that a majority of the Continuing Directors in office at the
time has deemed (based, among other things, on the dividend
and liquidation rights of such preferred shares) to have
substantially the same economic value as Common Shares (such
securities, hereinafter referred to as "common share
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 Continuing Directors in office at the time after
considering the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause
(B) above within thirty (30) days following the later of (x)
the 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, Common Shares (to the extent
available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional Common
Shares could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company
shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and
may suspend the exercisability of the Rights until the
18
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. The
Company shall make a public announcement when the
exercisability of the Rights has been temporarily suspended,
and again when such suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common
Shares shall be the current market price (as determined
pursuant to Section 11(d) hereof) per Common Share on the
Section 11(a)(ii) Trigger Date and the value of any "common
share equivalent" shall be deemed to have the same value as
the Common Shares on such date.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to holders of any
security of the Company entitling them to subscribe for or
purchase (for a period expiring within forty-five (45) calendar
days after such record date) Preferred Shares (or shares having
the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a price
per Preferred Share or per equivalent preferred share (or having
a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the
current market price (as determined pursuant to Section 11(d)
hereof) per Preferred Share on such record date, the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the number of Preferred Shares outstanding on such record date,
plus the number of Preferred Shares that the aggregate offering
price of the total number of Preferred Shares and/or equivalent
preferred shares 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 Preferred Shares outstanding on
such record date, plus the number of additional Preferred Shares
and/or equivalent preferred shares 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 the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Company, the Rights Agent and the holders of the
Rights. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such
rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price that 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 Preferred Shares (including
19
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
dividend out of the earnings or retained earnings of the
Company), assets (other than a regular quarterly dividend
referred to above or dividend payable in Preferred Shares, but
including any dividend payable in stock other than Preferred
Shares) 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
Preferred Share on such record date, less the then fair market
value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for
all purposes) 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 Preferred Share and the denominator
of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per Preferred Share. Such
adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase
Price which would have been in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation
hereunder, other than computations made pursuant to Section
11(a)(iii) hereof, the "current market price" per Common
Share on any date shall be deemed to be the average of the
daily closing prices per Common Share for the thirty (30)
consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per Common Share on any date shall be
deemed to be the average of the daily closing prices per
Common Share for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in
the event that the current market price per Common Share is
determined during a period following the announcement by the
issuer of such Common Share of (A) a dividend or
distribution on such Common Share payable in Common Shares
or securities convertible into Common Shares (other than the
Rights), or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to the
expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into
account ex-dividend trading. The closing price for each
Trading Day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or
20
admitted to trading on the New York Stock Exchange or, if
the Common Shares are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the Common Shares are listed or admitted
to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter
market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System
("Nasdaq") or such other system then in use, or, if on any
such date the Common 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 Common Shares selected by the Board of
Directors of the Company. If on any such date no market
maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good
faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Common
Shares are listed or admitted to trading is open for the
transaction of business or, if the Common Shares are not
listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Shares are not
publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per Preferred Share shall be
determined in the same manner as set forth above for the
Common Shares in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the current market
price per Preferred Share cannot be determined in the manner
provided above or if the Preferred Shares are not publicly
held or listed or traded in a manner described in clause (i)
of this Section 11(d), the "current market price" per
Preferred Share shall be conclusively deemed to be an amount
equal to one hundred (as such number may be appropriately
adjusted for such events as stock splits, stock dividends
and recapitalization with respect to the Common Shares
occurring after the date of this Agreement) multiplied by
the current market price per Common Share. If neither the
Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current market price" per Preferred
Share shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the "current market
price" of a Preferred Share Fraction shall be equal to the
"current market price" of one Preferred Share divided by
100.
21
(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 (1%) 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 one one-hundredth of a Common Share or one
one-hundred millionth of a Preferred Share, as the case may be.
Notwithstanding the first sentence of this subsection (e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction that mandates such adjustment, or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Shares, 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 Shares contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k), (m) and (q), and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of Preferred Share Fractions purchasable from
time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
subsections (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
Preferred Share Fractions (calculated to the nearest one
one-hundred millionth of a Preferred Share) obtained by (i)
multiplying (x) the number of Preferred Share Fractions 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 Preferred
22
Share Fractions purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Preferred Share
Fractions 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 one-hundredth of a Preferred
Share) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. The record date for the
adjustment 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 (10) days later than the
date of the 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 so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the
holders of record of 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 Preferred Share Fractions
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per Preferred Share Fraction and the number of
Preferred Share Fractions that were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated or
par value, if any, of the number of Preferred Share Fractions
issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
such number of fully paid and nonassessable Preferred Share
Fractions 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
23
issuance to the holder of any Right exercised after such record
date the number of Preferred Share Fractions and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Preferred Share Fractions
and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx 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 the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the
current market price, (iii) issuance wholly for cash for
Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company to holders
of its Preferred Shares shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(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 related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other person or persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or Section 26 hereof, take (or permit any Subsidiary
24
to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding
Common Shares into a smaller number of shares, the number of
Rights associated with each Common Share 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 Common Share following any
such event shall equal the result obtained by multiplying the
number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which shall be
the total number of Common Shares outstanding immediately prior
to the occurrence of the event and the denominator of which shall
be the total number of Common Shares outstanding immediately
following the occurrence of such event.
(q) In the event that the Rights become
exercisable following a Section 11(a)(ii) Event, the Company, by
action of a majority of the Continuing Directors in office at the
time, may authorize that the Rights, subject to Section 7(e)
hereof, either (i) will only be, or (ii) may, at the option of
the holder entitled to exercise the Rights be, exercisable for,
in either case, 50% of the Common Shares (or cash or other
securities or assets to be substituted for the Adjustment Shares
pursuant to subsection (a)(iii)) that would otherwise be
purchasable under subsection (a)(ii), in consideration of the
surrender to the Company of the Rights so exercised and without
other payment of the Purchase Price. Rights exercised under this
subsection (q) shall be deemed to have been exercised in full and
shall be canceled.
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 Preferred Shares and the Common Shares, 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 Common Shares) 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 a certificate.
25
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding Common
Shares shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case and
except as contemplated by subsection (d), proper provision shall
be made so that:
(i) each holder of a Right, except as
provided in Section 7(e) hereof or subsection (e), shall
thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non assessable and freely
tradeable Common Shares of the Principal Party (as such term
is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of
Preferred Share Fractions 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 shares for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately
prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of
the current market price (determined pursuant to Section
11(d)(i) hereof) per Common Share 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;
26
(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 its Common Shares) in connection with
the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to
its Common Shares thereafter deliverable upon the exercise
of the Rights; and
(v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of subsection
(a), the Person that is the issuer of any securities into
which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described
in clause (z) of the first sentence of subsection (a), the
Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the Common
Shares of such Person are not at such time and have not been
continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person, and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Shares of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the
greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Shares that have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
27
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
Section 13 event, the Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates that comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
that have not theretofore been exercised shall thereafter become
exercisable solely in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 (other than this subsection (d)) shall
not be applicable to, and the term "Section 13 Event" shall not
include, a transaction described in subparagraphs (x) and (y) of
Section 13(a) if (i) such transaction is consummated with a
Person, or Persons who acquired Common Shares pursuant to a
Qualifying Offer (or a wholly owned Subsidiary of any such Person
or Persons), (ii) the price per Common Share offered in such
transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant
to such tender offer, share exchange or exchange offer and (iii)
the form of consideration being offered to the remaining holders
of Common Shares pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender offer, share
exchange or exchange offer. Upon consummation of any such
transaction contemplated by this subsection (d), all Rights
hereunder shall expire.
(e) In the event that the Rights become
exercisable under subsection (a) (except as provided in
subsection (d)), the Company, by action of a majority of the
Continuing Directors in office at the time, may authorize that
the Rights either (i) will only be, or (ii) may, at the option of
the Principal Party be, exercisable for, 50% of the Common Shares
of the Principal Party that would otherwise be purchasable under
28
subsection (a), in consideration of the surrender to the
Principal Party, as the successor to the Company under subsection
(a)(ii), of the Rights so exercised and without other payment of
the Purchase Price. Rights exercised under this subsection (e)
shall be deemed to have been exercised in full and shall be
canceled.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For purposes of this subsection (a), the current market value of
a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue
fractions of Preferred Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred
Shares, except in each case for fractions which are integral
multiples of Preferred Shares. In lieu of fractional Preferred
Shares that are not integral multiples of Preferred Shares, the
Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market
value of a Preferred Share. For purposes of this subsection (b),
the current market value of one Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior
to the date of such exercise.
29
(c) Following the occurrence of a Triggering
Event, the Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute
certificates that evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share. For
purposes of this subsection (c), the current market value of one
Common Share shall be the closing price of one Common Share (as
determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right or a beneficial
interest in a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional
Common 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 are vested in the respective registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such 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 or beneficial
interests therein, it is specifically acknowledged that the
holders of Rights or beneficial interests therein would not have
an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this Agreement.
Section 16. Agreement of Rights Holders. Every holder
of a Right or a beneficial interest in a Right by accepting the
same consents and agrees with the Company and the Rights Agent
and with every other such holder that:
(a) prior to the Distribution Date, beneficial
interests in the Rights will be transferable only in connection
with the transfer of Common Shares;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
30
appropriate forms and certificates fully 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 Common Share 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 Common Share
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 required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or a beneficial interest
in a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of Preferred Share Fractions or
any other securities of the Company (including the Common Shares)
that may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such 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 and counsel fees and disbursements and other
31
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
and its directors, officers, employees and agents, for and to
hold each of them harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent or any such indemnified party in
connection with the acceptance or administration of this
Agreement or the exercise of its duties hereunder, including the
costs and expenses of defending against any claim of liability in
the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement or in the exercise of its duties hereunder in
reliance upon any Rights Certificate or certificate for Common
Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, 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 and trust
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
32
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 or beneficial
interests in the Rights, 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
written opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) 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; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained
in this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of any provision of
this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in
33
this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights or
any adjustment required under the provisions of this Agreement or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued
pursuant to this Agreement or any Rights Certificate or as to
whether any Common Shares or Preferred Shares will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer. 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 Agreement and the date on 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 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.
34
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement and none of such
actions shall constitute a breach of trust. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, that the
Rights Agent was not negligent in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if there shall
be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
(l) 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.
(m) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits).
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon thirty (30) days' prior
written notice mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or
35
certified mail, and to the holders of the Rights Certificates by
first- class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon thirty (30) days' prior written
notice mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Shares
and Preferred Shares, 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 (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be (a) a corporation organized, doing business and in good
standing under the laws of the United States or of any state,
having a principal office in the State of New York or the State
of Utah, that is authorized by law to exercise corporate trust
and stock transfer powers and is subject to supervision or
examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and
surplus adequate in the judgment of a majority of Continuing
Directors in office at the time to assure the performance of its
duties hereunder and the protection of the interests of the
Company and the holders of Rights or beneficial interests
therein, or (b) an Affiliate of a corporation described in clause
(a) of this sentence. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Shares and Preferred Shares and mail a notice thereof in
writing to the registered holders of the Rights Certificates or,
prior to the Distribution Date, to the registered holders of the
Common Shares. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of 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 its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
36
this Agreement. In addition, in connection with the issuance,
sale or delivery of Common Shares following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares so issued, sold
or delivered pursuant to the exercise of stock options, stock
appreciation rights, grants or awards outstanding on the
Distribution Date under any benefit plan or arrangement for
employees or directors, or upon the exercise, conversion or
exchange of securities outstanding on the Record Date or
hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (i) the close of
business on the tenth day following a Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the
Record Date, the close of business on the tenth day following the
Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.005 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price")
and the Company may, at its option, pay the Redemption Price
either in Common Shares (based on the "current market price", as
defined in Section 11(d)(i) hereof, of the Common Shares at the
time of redemption) or cash; provided, however, if the Board of
Directors of the Company authorizes redemption of the Rights in
either of the circumstances set forth in clauses (i) and (ii) of
this proviso, then there must be Continuing Directors then in
office and such authorization shall require the concurrence of a
majority of such Continuing Directors: (i) such authorization
occurs on or after the time a Person becomes an Acquiring Person,
or (ii) such authorization occurs on or after the date of a
change (resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement of such
solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such
solicitation, a majority of the Board of Directors of the Company
has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider
taking, any action that would result in such Person becoming an
Acquiring Person or that would cause the occurrence of a
Triggering Event unless, concurrent with such solicitation, such
Person (or one or more of its Affiliates or Associates) is making
37
a cash tender offer pursuant to a Schedule 14D-1 (or any
successor form) filed with the Securities and Exchange Commission
for all outstanding Common Shares not beneficially owned by such
Person (or by its Affiliates or Associates); provided further,
however, that if, following the occurrence of a Stock Acquisition
Date and following the expiration of the right of redemption
hereunder but prior to any Triggering Event, (i) an Acquiring
Person shall have transferred or otherwise disposed of a number
of Common Shares in one transaction or series of transactions,
not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a
Triggering Event or the Company (with the approval of the
majority of Continuing Directors) shall have issued additional
equity securities, in either instance such that such Person is
thereafter a Beneficial Owner of 10% or less of the outstanding
Common Shares, and (ii) there is no other Acquiring Person
immediately following the occurrence of the event described in
clause (i), then the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Shares. Any notice that 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.
(c) In deciding whether or not to exercise the
Company's right of redemption hereunder, the directors of the
Company shall act in good faith, in a manner they reasonably
believe to be in the best interests of the Company and with such
care, including reasonable inquiry, skill and diligence, as a
person of ordinary prudence would use under similar
circumstances.
38
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 Shares or to
make any other distribution to the holders of Preferred Shares
(other than a regular quarterly dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
holders of Preferred Shares rights or warrants to subscribe for
or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, or (iii)
to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of
outstanding Preferred Shares), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of Preferred Shares,
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 Preferred Shares 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 Preferred
Shares, whichever shall be the earlier.
(b) Upon the occurrence of a Section 11(a)(ii)
Event, (i) the Company shall as soon as practicable thereafter
give to each holder of a Right, 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,
and (ii) all references in the preceding paragraph to Preferred
Shares shall be deemed thereafter to refer to Common Shares
and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Players International, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Corporate Secretary
39
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Interwest Transfer Co., Inc.
1981 East 0000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
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 Common Shares) 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.
(a) Prior to the Distribution Date and subject to
the penultimate sentence of this Section 26, the Company may 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 Common Shares. From and
after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company may and the Rights Agent
shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights
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 that
the Company may deem necessary or desirable and that shall not
adversely affect the interests of the holders of Rights
Certificates; provided, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company that
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, (i) no supplement or amendment
40
shall be made that changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of Preferred
Share Fractions for which a Right is exercisable, (ii) any
supplement or amendment shall be effective only if there are
Continuing Directors and shall require the concurrence of a
majority of such Continuing Directors if: (x) such supplement or
amendment occurs on or after the time a Person becomes an
Acquiring Person, or (y) such supplement or amendment occurs on
or after the date of a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the
commencement of such solicitation if any Person who is a
participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take,
or may consider taking, any action that would result in such
Person becoming an Acquiring Person or that would cause the
occurrence of a Triggering Event unless, concurrent with such
solicitation, such Person (or one or more of its Affiliates or
Associates) is making a cash tender offer pursuant to a Schedule
14D-1 (or any successor form) filed with the Securities and
Exchange Commission for all outstanding Common Shares not
beneficially owned by such Person (or by its Affiliates or
Associates), and (iii) no supplement or amendment that changes
the rights and duties of the Rights Agent under this Agreement
shall be effective without the consent of the Rights Agent.
Prior to the Distribution Date, the interests of the beneficial
owners of Rights shall be deemed coincident with the interests of
the holders of Common Shares.
(b) In deciding whether or not to supplement or
amend this Agreement, the directors of the Company shall act in
good faith, in a manner they reasonably believe to be in the best
interests of the Company and with such care, including reasonable
inquiry, skill and diligence, as a person of ordinary prudence
would use under similar circumstances, and they may consider the
effects of any action upon employees, suppliers and customers of
the Company and upon communities in which offices or other
establishments of the Company are located, and all other
pertinent factors.
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 Common Shares outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares of which
any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (with, where specifically provided for
41
herein, the concurrence of the Continuing Directors) shall have
the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or to the Company, or as
may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend or supplement the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) that are done or made by
the Board (with, where specifically provided for herein, the
concurrence of the Continuing 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 the Continuing Directors 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 the Common Shares) 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 the Common Shares).
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 for any purpose or under any set of circumstances
or as applied to any Person, such invalid, void or unenforceable
term, provision, covenant or restriction shall continue in effect
to the maximum extent possible for all other purposes, under all
other circumstances and as applied to all other Persons; and the
remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated; provided, however,
that notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and
the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this
Agreement would adversely affect the purpose or effect of this
Agreement, the right of 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 the Board of Directors. Without limiting the
foregoing, if any provisions requiring that a determination be
made by less than the entire Board (or at a time or with the
concurrence of a group of directors consisting of less than the
42
entire Board) is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, such
determination shall then be made by the Board in accordance with
applicable law and the Company's Articles of Incorporation, as
amended, and By-laws.
Section 31. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the Nevada and for all
purposes shall be governed by and construed in accordance with
the laws of such jurisdiction applicable to contracts made and to
be performed entirely within such jurisdiction.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
43
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
PLAYERS INTERNATIONAL, INC.
By /s/ Xxxxxxx Xxxxxxx, Xx.
Name: Xxxxxxx Xxxxxxx, Xx.
Title: Vice President & General Counsel
INTERWEST TRANSFER CO., INC.
By /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
RESOLUTION OF THE BOARD OF DIRECTORS OF
PLAYERS INTERNATIONAL, INC.
ESTABLISHING AND DESIGNATING
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
AS A SERIES OF THE SERIES PREFERRED STOCK
RESOLVED, that pursuant to the authority expressly
vested in the Board of Directors of Players International (the
"Corporation") by Article IV of the Articles of Incorporation, as
amended, of the Corporation, the Board of Directors hereby fixes
and determines the voting rights, designations, preferences,
qualifications, privileges, limitations, restrictions, options,
conversion rights and other special or relative rights of the
first series of the Series Preferred Stock, no par value, which
shall consist of 700,000 shares and shall be designated as Series
A Junior Participating Preferred Shares (the "Series A Preferred
Shares").
Special Terms of the Series A Preferred Shares
Section 1. Dividends and Distributions.
(a) The rate of dividends payable per share of Series A
Preferred Shares on the first day of January, April, July and
October in each year or such other quarterly payment date as
shall be specified by the Board of Directors (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of the Series A
Preferred Shares, shall be (rounded to the nearest cent) equal to
the greater of (i) $4.00 or (ii) subject to the provision for
adjustment hereinafter set forth 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in cash, based upon the fair market
value at the time the non-cash dividend or other distribution is
declared or paid as determined in good faith by the Board of
Directors) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock of
the Corporation since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of the Series A Preferred Shares. Dividends
on the Series A Preferred Shares shall be paid out of funds
legally available for such purpose. In the event the Corporation
shall at any time after October 16, 1997 (the "Rights Declaration
Date") (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, then in each such case the
amounts to which holders of Series A Preferred Shares were
entitled immediately prior to such event under clause (ii) of the
preceding sentence shall be adjusted by multiplying each such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative
on outstanding Series A Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such
Series A Preferred Shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of Series A Preferred Shares entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and
be cumulative from such quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the Series A Preferred Shares in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
Section 2. Voting Rights. In addition to any other
voting rights required by law, the holders of Series A Preferred
Shares shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each Series A Preferred Share shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares, then in each such case the number of votes per
share to which holders of Series A Preferred Shares were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) In the event that dividends upon the Series A
Preferred Shares shall be in arrears to an amount equal to six
full quarterly dividends thereon, the holders of such Series A
Preferred Shares shall become entitled to the extent hereinafter
provided to vote noncumulatively at all elections of directors of
the Corporation, and to receive notice of all stockholders'
meetings to be held for such purpose. At such meetings, to the
extent that directors are being elected, the holders of such
Series A Preferred Shares voting as a class shall be entitled
solely to elect two members of the Board of Directors of the
Corporation; and all other directors of the Corporation shall be
elected by the other stockholders of the Corporation entitled to
vote in the election of directors. Such voting rights of the
holders of such Series A Preferred Shares shall continue until
all accumulated and unpaid dividends thereon shall have been paid
or funds sufficient therefor set aside, whereupon all such voting
rights of the holders of shares of such series shall cease,
subject to being again revived from time to time upon the
reoccurrence of the conditions above described as giving rise
thereto.
At any time when such right to elect directors
separately as a class shall have so vested, the Corporation may,
and upon the written request of the holders of record of not less
than 20% of the then outstanding total number of shares of all
the Series A Preferred Shares having the right to elect directors
in such circumstances shall, call a special meeting of holders of
such Series A Preferred Shares for the election of directors. In
the case of such a written request, such special meeting shall be
held within 90 days after the delivery of such request, and, in
either case, at the place and upon the notice provided by law and
in the By-laws of the Corporation; provided, that the Corporation
shall not be required to call such a special meeting if such
request is received less than 120 days before the date fixed for
the next ensuing annual or special meeting of stockholders of the
Corporation. Upon the mailing of the notice of such special
meeting to the holders of such Series A Preferred Shares, or, if
no such meeting be held, then upon the mailing of the notice of
the next annual or special meeting of stockholders for the
election of directors, the number of directors of the Corporation
shall, ipso facto, be increased to the extent, but only to the
extent, necessary to provide sufficient vacancies to enable the
holders of such Series A Preferred Shares to elect the two
directors hereinabove provided for, and all such vacancies shall
be filled only by vote of the holders of such Series A Preferred
Shares as hereinabove provided. Whenever the number of directors
of the Corporation shall have been increased, the number as so
increased may thereafter be further increased or decreased in
such manner as may be permitted by the By-laws and without the
vote of the holders of Series A Preferred Shares, provided that
no such action shall impair the right of the holders of Series A
Preferred Shares to elect and to be represented by two directors
as herein provided.
So long as the holders of Series A Preferred Shares are
entitled hereunder to voting rights, any vacancy in the Board of
Directors caused by the death or resignation of any director
elected by the holders of Series A Preferred Shares, shall, until
the next meeting of stockholder for the election of directors, in
each case be filled by the remaining director elected by the
holders of Series A Preferred Shares having the right to elect
directors in such circumstances.
Upon termination of the voting rights of the holders of
any series of Series A Preferred Shares the terms of office of
all persons who shall have been elected directors of the
Corporation by vote of the holders of Series A Preferred Shares
or by a director elected by such holders shall forthwith
terminate.
(c) Except as otherwise provided herein, in the
articles of the Corporation or by law, the holders of Series A
Preferred Shares and the holders of Common Stock (and the holders
of shares of any other series or class entitled to vote thereon)
shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
Section 3. Reacquired Shares. Any Series A Preferred
Shares purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued Series Preferred
Stock and may be reissued as part of a new series of Series
Preferred Stock to be created by resolution or resolutions of the
Board of Directors.
Section 4. Liquidation, Dissolution or Winding Up. In
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of
Series A Preferred Shares shall be entitled to receive the
greater of (a) $100 per share, plus accrued dividends to the date
of distribution, whether or not earned or declared, or (b) an
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock. In the
event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such
case the amount to which holders of Series A Preferred Shares
were entitled immediately prior to such event pursuant to clause
(b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 5. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the Series A Preferred Shares shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Preferred Shares
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. No Redemption. The Series A Preferred
Shares shall not be redeemable.
Section 7. Ranking. The Series A Preferred Shares
shall rank junior to all other series of the Corporation's Series
Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 8. Fractional Shares. Series A Preferred
Shares may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Shares.
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER JANUARY 27, 2007 OR AFTER EARLIER
REDEMPTION BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.005 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID.
PLAYERS INTERNATIONAL, INC.
RIGHTS CERTIFICATE
This certifies that _______________________, or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights
Agreement, dated as of January 27, 1997 (the "Rights Agreement"),
between Players International, Inc., a Nevada corporation (the
"Company"), and Interwest Transfer Co., Inc. (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00
P.M. (New York, New York time) on January 27, 2007 at the office
or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-hundredth of a fully
paid, nonassessable share of Series A Junior Participating
Preferred Stock (the "Preferred Share") of the Company, at a
purchase price (the "Purchase Price") of $30 per one one-
hundredth of a Preferred Share (such fraction, a "Preferred Share
Fraction"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
Certificate duly executed. Except as provided in Sections 11(q)
and 13(e) of the Rights Agreement, the Purchase Price shall be
paid, at the election of the holder, in cash or Common Stock, of
the Company (the "Common Shares") having an equivalent value.
The number of Rights evidenced by this Rights Certificate (and
the number of Preferred Share Fractions that may be purchased
upon exercise thereof) set forth above, and the Purchase Price
per Preferred Share Fraction set forth above, are the number and
Purchase Price as of October 27, 1997, based on the Preferred
Shares as constituted at such date.
Except as otherwise provided in the Rights Agreement,
upon the occurrence of any 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 (i) an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, such Rights shall become
null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of Preferred Shares or other securities
that may be purchased upon the exercise of the Rights evidenced
by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of Preferred Share Fractions as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the 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 at its option at a redemption price of $.005 per Right at
any time prior to the earlier of the close of business on (i) the
tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date. Under certain circumstances set
forth in the Rights Agreement, the decision to redeem shall
require the concurrence of a majority of the Continuing
Directors.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of a Preferred Share,
which may, as the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of Preferred Shares or of any other securities of the
Company (including Common Shares) that may at any time be
issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this 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 and its corporate seal.
Dated as of October 27, 1997
ATTEST PLAYERS INTERNATIONAL, INC.
By_____________________________
By_______________________________
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx Xxxxxxx, Xx.
Title: Secretary Title: Vice President and
General Counsel
Countersigned
INTERWEST TRANSFER CO., INC.
By____________________
Name:
Title:
[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: _________________, 19 __
_______________________
Signature
Signature Guaranteed:
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);
(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: ________________, 19__ _____________________
Signature
Signature Guaranteed:
NOTICE
The signatures 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.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
TO: PLAYERS INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise
________ Rights represented by this Rights Certificate to
purchase the Preferred Shares issuable upon the exercise of the
Rights (or Common Shares or such other securities of the Company
or of any other person that may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _____________, 19__
_________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: _____________, 19__ _________________________
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election to Purchase
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.
