EXHIBIT 1
STAFF LEASING, INC. D/B/A GEVITY HR
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGREEMENT
DATED AS OF APRIL 23, 2002
TABLE OF CONTENTS
PAGE
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Section 1. Certain Definitions....................................................................................1
Section 2. Appointment of Rights Agent............................................................................7
Section 3. Issue of Right Certificates............................................................................8
Section 4. Form of Right Certificates............................................................................10
Section 5. Countersignature and Registration.....................................................................10
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.....................................................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........................................12
Section 8. Cancellation and Destruction of Right Certificates....................................................15
Section 9. Company Covenants Concerning Securities and Rights....................................................16
Section 10. Record Date..........................................................................................18
Section 11. Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights......................19
Section 12. Certificate of Adjusted Purchase Price or Number of Securities.......................................32
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.................................32
Section 14. Fractional Rights and Fractional Securities..........................................................36
Section 15. Rights of Action.....................................................................................38
Section 16. Agreement of Rights Holders..........................................................................38
Section 17. Right Certificate Holder Not Deemed a Stockholder....................................................40
Section 18. Concerning the Rights Agent..........................................................................40
Section 19. Merger or Consolidation or Change of Name of Rights Agent............................................41
Section 20. Duties of Rights Agent...............................................................................42
Section 21. Change of Rights Agent...............................................................................45
Section 22. Issuance of New Right Certificates...................................................................46
Section 23. Redemption...........................................................................................47
Section 24. Notice of Certain Events.............................................................................48
Section 25. Notices..............................................................................................50
Section 26. Supplements and Amendments...........................................................................50
Section 27. Exchange.............................................................................................52
Section 28. Successors; Certain Covenants........................................................................53
Section 29. Benefits of this Agreement...........................................................................53
Section 30. Determinations and Actions by the Board of Directors, etc............................................54
Section 31. Severability.........................................................................................54
Section 32. Governing Law........................................................................................55
Section 33. Counterparts.........................................................................................55
Section 34. Descriptive Headings.................................................................................55
Form of Right Certificate Exhibit A
Summary of Rights to Purchase Common Stock Exhibit B
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of April 23, 2002 (this "Agreement"),
is made and entered into by and between Staff Leasing, Inc. d/b/a Gevity HR, a
Florida corporation (the "Company"), and American Stock Transfer & Trust
Company, a New York corporation (the "Rights Agent").
RECITALS
WHEREAS, on April 23, 2002, the Board of Directors of the Company (the
"Board of Directors") authorized and declared a dividend distribution of one
right ("Right") for each share of Common Stock, par value $ .01 per share, of
the Company (a "Common Share") outstanding as of the Close of Business (as
hereinafter defined) on May 7, 2002 (the "Record Date"), each Right initially
representing the right to purchase one Common Share, upon the terms and subject
to the conditions herein set forth, and further authorized and directed the
issuance of one Right with respect to each Common Share issued or delivered by
the Company (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date (as
hereinafter defined) and the Expiration Date (as hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than an
Excepted Person for so long as such Person continues to meet the definition of
Excepted Person, the Company or any Subsidiary of the Company or any employee
benefit or stock ownership plan of the Company or of any Subsidiary of the
Company or any Person holding Common Shares for or pursuant to the
terms of any such plan) who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the
Common Shares then outstanding; provided, however, that a Person shall not be
deemed to have become an Acquiring Person solely as a result of a reduction in
the number of Common Shares outstanding unless and until (i) such time as such
Person or any Affiliate or Associate of such Person shall thereafter become the
Beneficial Owner of any additional Common Shares, other than as a result of a
stock dividend, stock split or similar transaction effected by the Company in
which all holders of Common Shares are treated equally, or (ii) any other Person
who is the Beneficial Owner of any Common Shares shall thereafter become an
Affiliate or Associate of such Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and to
"beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise (in each case, other than upon exercise or exchange of the
Rights); provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's
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Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or dispose
of, including pursuant to any agreement, arrangement or understanding
(whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing)
with such other Person (or any of such other Person's Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of
any securities of the Company; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any
security (A) if such Person has the right to vote such security
pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report), or (B) if such beneficial ownership arises solely as a result
of such Person's status as a "clearing agency", as defined in Section
3(a)(23) of the Exchange Act; and provided, further, 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 an underwriting syndicate until the
expiration of 40 calendar days after the date of
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such acquisition, or such later date as the Board of Directors may
determine in any specific case.
(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 (or such
other state in which the designated office of the Rights Agent is located) 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.,
Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the Common Stock, par value $ .01 per share, of the Company; provided,
however, that, if the Company is the continuing or surviving corporation in a
transaction described in Section 11(a)(ii) or Section 13(a)(ii) hereof, "Common
Shares" when used with reference to the Company shall mean the capital stock or
equity security with the greatest aggregate voting power of the Company. "Common
Shares" when used with reference to any corporation or other Person, other than
the Company, including an Issuer, shall mean the capital stock or equity
security with the greatest aggregate voting power of such corporation or other
Person.
(g) "Company" shall mean Staff Leasing, Inc. d/b/a Gevity HR, a
Florida corporation. (h) "Distribution Date" shall mean the earliest of: (i) the
Close of Business on the tenth Business Day (or, unless the Distribution Date
shall have previously occurred, such later date as may be specified by the Board
of Directors) after the Share Acquisition Date, (ii) the Close of Business on
the tenth Business Day (or, unless the Distribution Date shall have previously
occurred, such later date as may be specified by the Board of Directors) after
the date of the
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commencement of a tender or exchange offer by any Person (other than an Excepted
Person for so long as such Person continues to meet the definition of Excepted
Person, the Company or any Subsidiary of the Company or any employee benefit or
stock ownership plan of the Company or of any Subsidiary of the Company or any
Person holding Common Shares for or pursuant to the terms of any such plan), if
upon the consummation thereof such Person would be the Beneficial Owner of 15%
or more of the outstanding Common Shares, and (iii) the Close of Business on the
tenth Business Day after the first date of public announcement by the Company or
an Acquiring Person (by press release, filing made with the Securities and
Exchange Commission or otherwise) of the first occurrence of a Triggering Event;
provided, however, that if the earliest of such dates would otherwise occur
prior to the Record Date, the Distribution Date shall mean the Close of Business
on the Record Date.
(i) "Excepted Percentage" applicable to any Excepted Person shall,
at any particular time, be a percentage of the shares of Common Stock then
outstanding, which percentage shall be equal to the sum of (A) the lesser of (i)
the percentage of the outstanding Common Shares beneficially owned by such
Person on the date of this Agreement or (ii) the lowest percentage of the
outstanding Common Shares beneficially owned by such Person at any time
thereafter, and (B) 1.5%.
(j) "Excepted Person" shall mean any Person that, on the date of
this Agreement, is the Beneficial Owner of 15% or more of the Common Shares then
outstanding, but only so long as such Person has not become the Beneficial Owner
of a percentage of the Common Shares then outstanding in excess of the then
applicable Excepted Percentage.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
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(l) "Expiration Date" shall mean the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, and (iii) the time at which all
exercisable Rights are exchanged as provided in Section 27 hereof.
(m) "Final Expiration Date" shall mean the tenth anniversary of
the Record Date.
(n) "Flip-in Event" shall mean any event described in clauses (A),
(B) or (C) of Section 11(a)(ii) hereof.
(o) "Flip-over Event" shall mean any event described in
subsections (i), (ii) or (iii) of Section 13(a) hereof.
(p) "Issuer" shall have the meaning set forth in Section 13(b)
hereof.
(q) "NASDAQ" shall mean The Nasdaq Stock Market.
(r) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, trust, association,
unincorporated organization, group or other legal entity, and shall include any
successor (by merger or otherwise) of such entity.
(s) "Purchase Price" shall mean initially $39.60 per Common Share
and shall be subject to adjustment from time to time as provided in this
Agreement.
(t) "Redemption Price" shall mean $0.01 per Right, subject to
adjustment by resolution of the Board of Directors to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof.
(u) "Right" shall have the meaning set forth in the Recitals to
this Agreement.
(v) "Right Certificates" shall mean certificates evidencing the
Rights, in substantially the form of Exhibit A attached hereto.
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(w) "Rights Agent" shall mean American Stock Transfer & Trust
Company unless and until a successor Rights Agent shall have become such
pursuant to the terms of this Agreement, and thereafter, "Rights Agent" shall
mean such successor Rights Agent.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(y) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(z) "Subsidiary" when used with reference to any Person shall mean
any corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person; provided, however, that for purposes of Section
13(b) hereof, "Subsidiary" when used with reference to any Person shall mean any
corporation or other legal entity of which at least 20% of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(aa) "Summary of Rights to Purchase Common Stock" shall mean the
Summary of Rights to Purchase Common Shares, in substantially the form of
Exhibit B attached hereto.
(bb) "Trading Day" shall mean any day on which NASDAQ is open for
the transaction of business or, if the Common Shares are not listed or admitted
to trading on NASDAQ or national securities exchange, a Business Day.
(cc) "Triggering Event" shall mean any Flip-in Event or Flip-over
Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment and hereby certifies that it complies with the requirements of
NASDAQ governing transfer agents and registrars. The Company may from
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time to time act as Co-Rights Agent or appoint such Co-Rights Agents as it may
deem necessary or desirable. The Rights Agent shall have no duty to supervise,
and in no event shall be liable for, the acts or omissions of any such Co-Rights
Agent. Any actions which may be taken by the Rights Agent pursuant to the terms
of this Agreement may be taken by any such Co-Rights Agent. To the extent that
any Co-Rights Agent takes any action pursuant to this Agreement, such Co-Rights
Agent shall be entitled to all of the rights and protections of, and subject to
all of the applicable duties and obligations imposed upon, the Rights Agent
pursuant to the terms of this Agreement.
SECTION 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the
Distribution Date, (i) the Rights shall be evidenced by the certificates
representing Common Shares registered in the names of the record holders thereof
(which certificates representing Common Shares shall also be deemed to be Right
Certificates), together with a copy of the Summary of Rights, (ii) the Rights
shall be transferable only in connection with the transfer of the underlying
Common Shares, and (iii) the surrender for transfer of any certificates
evidencing Common Shares in respect of which Rights have been issued, with or
without a copy of the Summary of Rights, shall also constitute the transfer of
the Rights associated with the Common Shares evidenced by such certificates.
(b) As promptly as practicable after the Record Date, the Company
shall send a copy of the Summary of Rights, by first-class, postage prepaid
mail, to each record holder of Common Shares as of the close of business on the
Record Date, at the address of such holder shown on the records of the Company
as of such date.
(c) Rights shall be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the
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Record Date but prior to the earlier of the Distribution Date and the Expiration
Date. Certificates evidencing such Common Shares shall have stamped on,
impressed on, printed on, written on or otherwise affixed to them the following
legend or such similar legend as the Company may deem appropriate (which do not
affect the duties or responsibilities of the Rights Agent) and as is 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 or transaction
reporting system on which the Common Shares may from time to time be listed or
quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Staff
Leasing, Inc. d/b/a Gevity HR and American Stock Transfer & Trust
Company, dated as of April 23, 2002 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of Staff Leasing,
Inc. d/b/a Gevity HR. Under certain circumstances, as set forth in the
Rights Agreement, such Rights may be redeemed, may expire, may be
amended or may be evidenced by separate certificates and no longer be
evidenced by this Certificate. Staff Leasing, Inc. d/b/a Gevity HR will
mail to the holder of this Certificate a copy of the Rights Agreement
without charge promptly after receipt of a written request therefor.
Under certain circumstances as set forth in the Rights Agreement,
Rights beneficially owned by an Acquiring Person or any Affiliate or
Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement) may become null and void.
(d) As promptly as practicable after the Distribution Date, the
Company shall promptly notify in writing the Rights Agent thereof and provide
the Rights Agent with the names and addresses of all record holders of Common
Shares (together with all other necessary information), and the Company shall
prepare and execute, the Rights Agent shall countersign and the Company shall
send or cause to be sent (and the Rights Agent shall, if requested, send), by
first-class, insured, postage prepaid mail, to each record holder of 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, a Right Certificate, evidencing
one Right for each Common Share so held, subject
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to adjustment. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the form of election to purchase and form of assignment to be printed on
the reverse thereof) shall be substantially in the form set forth as Exhibit A
hereto with such changes, marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate provided that such marks, legends, summaries or endorsements do not
affect the rights, duties or responsibilities of the Rights Agent 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 or transaction
reporting system on which the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of Section 22 hereof, the
Right Certificates, whenever issued, on their face shall entitle the holders
thereof to purchase such number of Common Shares as shall be set forth therein
at the Purchase Price set forth therein, but the Purchase Price, the number and
kind of securities issuable upon exercise of each Right and the number of Rights
outstanding shall be subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, or Chief Financial Officer, 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 Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right
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Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, receipt by the Rights Agent
of written notice to that effect and all other relevant information referred to
in Section 3(a), the Rights Agent shall keep or cause to be kept, at the office
of the Rights Agent designated for such purpose and at such other offices 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 or
any transaction reporting system on which the Rights may from time to time be
listed or quoted, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Sections 7(d) and 14 hereof, at any time after the
Close of Business on the Distribution Date and prior to the Expiration Date, any
Right Certificate or Right Certificates representing exercisable Rights may be
transferred, split up, combined or exchanged for another Right Certificate or
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Right Certificates, entitling the registered holder to purchase a like number of
Common Shares (or other securities, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any such Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose.
Thereupon or as promptly as practicable thereafter, subject to the provisions of
Sections 7(d) and 14 hereof, the Company shall prepare, execute and deliver to
the Rights Agent, and the Rights Agent shall countersign and deliver a Right
Certificate or Right 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 Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company shall prepare, execute and deliver a new Right
Certificate of like tenor to the Rights Agent and the Rights Agent shall
countersign and deliver such new Right Certificate to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as
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otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Expiration Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment in cash, in lawful money of
the United States of America by certified check or bank draft payable to the
order of the Company, equal to the sum of (i) the exercise price for the total
number of securities as to which such surrendered Rights are exercised and (ii)
an amount equal to any applicable tax or charge required to be paid by the
holder of such Right Certificate in accordance with the provisions of Section 9
hereof. In lieu of the cash payment referred to in the immediately preceding
sentence, following the occurrence of a Triggering Event the registered holder
of a Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part upon surrender of the Right
Certificate as described above together with an election to exercise such Rights
without payment of cash on the reverse side thereof duly completed. With respect
to any Rights as to which such an election is made, the holder shall receive a
number of Common Shares or other securities having a value equal to the
difference between (i) the value of the Common Shares or other securities that
would have been issuable upon payment of the cash amount as described above, and
(ii) the amount of such cash payment. For purposes of this Section 7(a), the
value of any Common Share or other security shall be the current per share
market price of a Common Share (determined pursuant to the applicable provisions
of Section 11(d) hereof) on the Trading Day immediately preceding the date of
the first occurrence of a Triggering Event.
(b) Upon receipt of a Right Certificate representing exercisable
Rights with the form of election to purchase duly executed, accompanied by
either payment as described above or a
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duly completed election to exercise without payment of cash, the Rights Agent
shall promptly (i) requisition from any transfer agent of the Common Shares (or
make available, if the Rights Agent is the transfer agent) certificates
representing the number of Common Shares to be purchased (and the Company hereby
irrevocably authorizes and directs its transfer agent to comply with all such
requests), (ii) after receipt of such certificates (or depositary receipts, as
the case may be), cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, (iii) when necessary to comply with this
Agreement, requisition from the Company or any transfer agent therefor (or make
available, if the Rights Agent is the transfer agent) certificates representing
the number of equivalent common shares to be issued in lieu of the issuance of
Common Shares in accordance with the provisions of Section 11(a)(iii) hereof,
(iv) when necessary to comply with this Agreement, after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, (v) when necessary to comply with this
Agreement, requisition from the Company the amount of cash to be paid in lieu of
the issuance of fractional shares in accordance with the provisions of Section
14 hereof or in lieu of the issuance of Common Shares in accordance with the
provisions of Section 11(a)(iii) hereof, (vi) when necessary to comply with this
Agreement, after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate, and (vii) when necessary to comply
with this Agreement, deliver any due xxxx or other instrument provided to the
Rights Agent by the Company for delivery to the registered holder of such Right
Certificate as provided by Section 11(l) hereof.
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(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, the Company shall prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised and the Rights Agent shall countersign and deliver
such new Right Certificate to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(d) 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 any purported transfer, split up, combination or exchange
of any Right Certificate pursuant to Section 6 hereof or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate shall have (i) properly completed and signed the certificate
following the form of assignment or the form of election to purchase, as
applicable, set forth on the reverse side of the Right Certificate surrendered
for such transfer, split up, combination, exchange or 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 or the
Rights Agent shall have reasonably requested.
(e) Neither the Company nor the Rights Agent shall have any
liability to any holder of Rights or any other Person as a result of the
Company's failure to make any determination under this Section 7 or any other
section with respect to an Acquiring Person on an Affiliate or Associate of an
Acquiring Person or transferees hereunder.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its stock transfer agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent, shall
15
be cancelled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by this Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
SECTION 9. COMPANY COVENANTS CONCERNING SECURITIES AND RIGHTS.
The Company covenants and agrees that:
(a) So long as the Common Shares issuable upon the exercise of the
Rights may be listed on NASDAQ or a national securities exchange, it shall
endeavor to cause, from and after such time as the Rights become exercisable,
all securities reserved for issuance upon the exercise of Rights to be listed on
NASDAQ or such exchange upon official notice of issuance upon such exercise.
(b) It shall take all such action as may be necessary to ensure
that all Common Shares and/or other securities delivered upon exercise of
Rights, at the time of delivery of the certificates for such securities, shall
be (subject to payment of the Purchase Price) duly and validly authorized and
issued, fully paid and nonassessable securities.
(c) It shall pay when due and payable any and all taxes and
charges that may be payable in respect of the issuance or delivery of the Right
Certificates and of any certificates representing securities issued upon the
exercise of Rights; provided, however, that the Company shall not be required to
pay any tax or charge which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates or
16
depositary receipts representing securities issued upon the exercise of Rights
in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or deliver any
certificates or depositary receipts representing securities issued upon the
exercise of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax or change is due.
(d) It shall use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the first occurrence of a
Triggering Event or the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date. The Company
shall 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 after the date set forth in clause (i) of the first sentence of
this Section 9(d), the exercisability of the Rights in order to prepare and file
such registration statement and to permit it to become effective. Upon any such
suspension, the Company shall promptly notify the Rights Agent in writing of
such suspension and 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 (with prompt
written notice to the Rights Agent that such
17
suspension is no longer in effect). In addition, if the Company shall determine
that a registration statement should be filed under the Securities Act or any
state securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each relevant
jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company shall promptly notify the
Rights Agent in writing of such suspension and 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 (with prompt written notice to the Rights Agent that such suspension is
no longer in effect). Notwithstanding anything in this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite registration or qualification in such jurisdiction shall not have been
effected or the exercise of the Rights shall not be permitted under applicable
law.
(e) Notwithstanding anything in this Agreement to contrary, after
the Distribution Date the Company shall not, except as permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action will
eliminate or otherwise diminish the benefits intended to be afforded by the
Rights.
(f) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Sections 11, 13 or 14
hereof, it shall make all arrangements necessary so that such other securities
and/or cash are available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement.
SECTION 10. RECORD DATE. Each Person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the
18
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and all
applicable taxes or charges) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Shares transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Shares transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to securities for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SECURITIES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
securities issuable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D) issue
any shares of its capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of
19
such subdivision, combination or reclassification, and/or the number and/or kind
of shares of capital stock issuable on such date upon exercise of a Right, shall
be proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive upon payment of the Purchase Price then in
effect the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Common Shares transfer books of the Company were open, the holder of such Right
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 or Section 13 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) or Section 13 hereof.
(ii) Subject to the provisions of Section 27 hereof, in
the event that:
(A) any Acquiring Person or any Affiliate or
Associate of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, shall (1) 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
(other than in a transaction subject to Section 13 hereof), (2) merge
or otherwise combine with any Subsidiary of the Company, (3) in one or
more transactions (other than in connection with the exercise or
exchange of Rights or the exercise or conversion of securities
exercisable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries) transfer any assets to
the Company or any of its Subsidiaries in exchange (in whole or in
part) for shares of any class of capital stock of the Company or any of
its Subsidiaries or for securities exercisable for or convertible into
shares of any class of capital stock of the Company or any of its
Subsidiaries, or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of
any class of
20
capital stock of the Company or any of its Subsidiaries or securities
exercisable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries (other than as part of
a pro rata distribution to all holders of such shares of any class of
capital stock of the Company, or any of its Subsidiaries), (4) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from, with or of, as the
case may be, the Company or any of its Subsidiaries (other than in a
transaction subject to Section 13 hereof), assets, including
securities, 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, (5) receive any compensation from the Company
or any of its Subsidiaries other than compensation as a director or for
full-time employment as a regular employee, in either case, at rates in
accordance with the Company's (or its Subsidiaries') past practices, or
(6) receive the benefit, directly or indirectly (except proportionately
as a stockholder), 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) 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 (whether or not with or into or otherwise
involving an Acquiring Person), other than a transaction subject to
Section 13 hereof, which has the effect, directly or
21
indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities or of
securities exercisable for or convertible into equity securities of the
Company or any of its Subsidiaries of which an Acquiring Person or any
Affiliate or Associate of any Acquiring Person, is the Beneficial
Owner; or
(C) any Person (other than an Excepted Person
for so long as such Person continues to meet the definition of Excepted
Person, the Company or any Subsidiary of the Company or any employee
benefit or stock ownership plan of the Company or of any Subsidiary of
the Company or any entity holding Common Shares for or pursuant to the
terms of any such plan) who or which, together with all Affiliates and
Associates of such Person, shall at any time after date of this
Agreement, become the Beneficial Owner of 20% or more of the Common
Shares then outstanding (other than pursuant to any transaction set
forth in Section 13(a) hereof); provided, however, that a Person shall
not be deemed to have become the Beneficial Owner of 20% or more of the
Common Shares then outstanding for the purposes of this Section
11(a)(ii)(C) solely as a result of a reduction in the number of Common
Shares outstanding unless and until such time as (1) such Person or any
Affiliate or Associate of such Person shall thereafter become the
Beneficial Owner of any additional Common Shares other than as a result
of a stock dividend, stock split or similar transaction effected by the
Company in which all holders of Common Shares are treated equally, or
(2) any other Person who is the Beneficial Owner of any Common Shares
shall thereafter become an Affiliate or Associate of such Person, then,
and in each such case, proper provision shall be made so that each
holder of a Right, except as provided below, shall thereafter have a
right to receive, upon exercise thereof in accordance with the terms of
this Agreement at an exercise price per
22
Right equal to the product of the then-current Purchase Price
multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Triggering
Event, such number of Common Shares as shall equal the result obtained
by (x) multiplying the then-current Purchase Price by the number of
Common Shares for which a Right was exercisable immediately prior to
the first occurrence of a Triggering Event, and dividing that product
by (y) 50% of the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the first
occurrence of a Triggering Event. Notwithstanding anything in this
Agreement to the contrary, from and after the later of the Distribution
Date and the first occurrence of a Flip-in Event, (1) any Rights that
are or were acquired or beneficially owned by any Acquiring Person (or
any Affiliate or Associate of such Acquiring Person) shall be null and
void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement, (2) no
Right Certificate shall be issued pursuant to this Agreement that
represents Rights beneficially owned by an Acquiring Person or any
Affiliate or Associate thereof, (3) no Right Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring
Person or any Affiliate or Associate thereof or to any nominee of such
Acquiring Person or Affiliate or Associate thereof, and (4) any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person or any Affiliate or Associate thereof shall be cancelled.
(iii) Upon the occurrence of a Flip-in Event, if there
shall not be sufficient Common Shares authorized but unissued or issued but not
outstanding to permit the issuance of all the Common Shares issuable in
accordance with subsection (ii) hereof upon the exercise of a Right, the Board
of Directors shall use its best efforts promptly to authorize and, subject to
the
23
provisions of Section 9(d) hereof, make available for issuance additional Common
Shares or other equity securities of the Company having equivalent voting rights
and an equivalent value (as determined in good faith by the Board of Directors)
to the Common Shares (for purposes of this Section 11(a)(iii), "equivalent
common shares"). In the event that equivalent common shares are so authorized,
upon the exercise of a Right in accordance with the provisions of Section 7
hereof, the registered holder shall be entitled to receive (A) Common Shares, to
the extent any are available and (B) a number of equivalent common shares, which
the Board of Directors shall have determined in good faith to have a value
equivalent to the excess of (x) the aggregate current per share market value of
all the Common Shares issuable in accordance with subsection (ii) hereof upon
the exercise of a Right (the "Exercise Value") over (y) the aggregate current
per share market value of any Common Shares available for issuance upon the
exercise of such Right; provided, however, that if at any time after 90 calendar
days after the first occurrence of a Flip-in Event, there shall not be
sufficient Common Shares and/or equivalent common shares available for issuance
upon the exercise of a Right, then the Company shall be obligated to deliver,
upon the surrender of such Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available), equivalent common shares (to the
extent available) and then cash (to the extent permitted by applicable law and
any agreements or instruments to which the Company is a party in effect
immediately prior to the first occurrence of any Flip-in Event), which
securities and cash shall have an aggregate value equal to the excess of (1) the
Exercise Value over (2) the product of the then-current Purchase Price
multiplied by the number of Common Shares for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event. To the extent
that any legal or contractual restrictions prevent the Company from paying the
full amount of cash payable in accordance with the foregoing sentence, the
24
Company shall pay to holders of the Rights as to which such payments are being
made all amounts which are not then restricted on a pro rata basis and shall
continue to make payments on a pro rata basis as funds become available until
the full amount due to each such Rights holder has been paid.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or securities having
equivalent rights, privileges and preferences as the Common Shares (for purposes
of this Section 11(b), "equivalent common shares")) or securities convertible
into Common Shares or equivalent common shares at a price per Common Share or
equivalent common share (or having a conversion price per share, if a security
convertible into Common Shares or equivalent common shares) less than the
current per share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) 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 Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent common 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 per share market price and the
denominator of which shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares and/or equivalent common
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 in a consideration part or all of which shall be
in a form
25
other than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors, whose determination shall be described in a
reasonably detailed statement filed with the Rights Agent. Common 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, options
or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Common Shares) or subscription rights, options
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 per share market price of
the Common Shares (as determined pursuant to Section 11(d) hereof) on such
record date or, if earlier, the date on which Common Shares begin to trade on an
ex-dividend or when-issued basis for such distribution, less the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be described in a reasonably detailed statement filed with
the Rights Agent) of the portion of the evidences of indebtedness, cash, assets
or stock so to be distributed or of such subscription rights, options or
warrants applicable to one Common Share, and the denominator of which shall be
such current per share market price of the Common Shares. Such adjustments shall
be made successively whenever
26
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per
share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to but not including such date;
provided, however, that in the event that the current per share market price of
the Common Shares is determined during a period following the announcement by
the issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into such
Common Shares (other than the Rights) or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to but not including the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading
or to reflect the current per share market price per Common Share equivalent.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on NASDAQ or, if the Common Shares are not listed or
admitted to trading on NASDAQ, 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
27
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 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. If the Common Shares are not publicly held
or not so listed or traded, or not the subject of available bid and asked
quotes, "current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors, whose determination shall be
described in a reasonably detailed statement filed with the Rights Agent.
(e) Except as set forth below, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a Common Share or other security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment and (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any securities of the Company other than Common Shares, thereafter the
number of such other securities so receivable upon exercise of any Right 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 Common Shares
28
contained in this Section 11, and the provisions of Sections 7, 9, 10 and 13
hereof with respect to the Common Shares shall apply on like terms to any such
other securities.
(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 Common Shares issuable
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) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Section 11(b) and Section 11(c) hereof with
respect to a distribution of subscription rights, options or warrants applicable
to Common Shares, 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 Common Shares (calculated to the nearest
one-thousandth a Common Share) obtained by (i) multiplying (x) the number of
Common Shares issuable upon exercise of a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect, on or after the date of any adjustment
of the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of Common Shares issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of Common Shares 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-thousandth) obtained by dividing the
Purchase Price in effect immediately
29
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 calendar days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to the provisions of Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number or kind of securities issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number and kind of securities which were expressed in
the initial Right Certificate issued hereunder.
30
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares or any other securities of the Company issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Common Shares or such other securities, as
the case may be, 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 (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of Common
Shares or other securities of the Company, if any, issuable upon such exercise
over and above the number of Common Shares or other 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 Common Shares or other securities upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary,
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 its good faith judgment the Board of Directors shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Common Shares, (ii) issuance wholly for cash of Common Shares at less than
the current per share market price therefor, (iii) issuance wholly for cash of
Common Shares or securities which by their terms are convertible into or
exchangeable for Common Shares,
31
(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 Common
Shares shall not be taxable to such shareholders.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SECURITIES. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief, reasonably detailed, statement of the facts,
computations and methodology accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares, a copy of such
certificate, and (c) if such adjustment is made after the Distribution Date,
mail a brief summary of such adjustment to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully authorized
and protected in relying on such certificates and any adjustments contained
therein, and shall have no duty with respect to, and shall not be deemed to have
knowledge of any adjustment, unless and until it shall have received such
certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER. (a) In the event that, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with or
into, any other Person and the Company shall not be the continuing or
surviving corporation of such consolidation or merger; or
(ii) any Person shall consolidate with the Company, or
merge with or into the Company and the Company shall be the continuing
or surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part
32
of the Common Shares shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power (including, without
limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) representing in the aggregate
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons,
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms of
this Agreement at an exercise price per Right equal to the product of the
then-current Purchase Price multiplied by the number of Common Shares for which
a Right was exercisable immediately prior to the first occurrence of a
Triggering Event, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable Common Shares of the Issuer, free and clear of
any liens, encumbrances and other adverse claims and not subject to any rights
of call or first refusal, as shall be equal to the result obtained by (x)
multiplying the then-current Purchase Price by the number of Common Shares for
which a Right is exercisable immediately prior to the first occurrence of a
Triggering Event and dividing that product by (y) 50% of the current per share
market price of the Common Shares of the Issuer (determined pursuant to Section
11(d) hereof), on the date of consummation of such Flip-over Event; (B) the
Issuer shall thereafter be liable for, and shall assume, by virtue of the
consummation of such Flip-over Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" shall thereafter be
deemed to refer to the Issuer; and
33
(D) the Issuer shall take such steps (including, without limitation, the
reservation of a sufficient number of its Common Shares to permit the exercise
of all outstanding Rights) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" shall mean (i) in
the case of any Flip-over Event described in Sections 13(a)(i) or (ii) above,
the Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), and (ii) in the case of any
Flip-over Event described in Section 13(a)(iii) above, the Person that is the
party receiving the greatest portion of the assets or earning power (including,
without limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such transaction
or transactions; provided, however, that, in any such case, (A) if (1) no class
of equity security of such Person is, at the time of such merger, consolidation
or transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" shall mean
such other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two or more
of which are and have been so registered, the term "Issuer" shall mean whichever
of such Persons is the issuer of the equity security having the greatest
aggregate market value. Notwithstanding the foregoing, if the Issuer in any of
the Flip-over Events listed above is not a corporation or other Person having
outstanding equity securities, then, and in each such case, (x) if the Issuer is
directly or indirectly wholly owned by
34
a corporation or other Person having outstanding equity securities, then all
references to Common Shares of the Issuer shall be deemed to be references to
the Common Shares of the corporation or other Person having outstanding equity
securities which ultimately controls the Issuer, and (y) if there is no such
corporation or other Person entity having outstanding equity securities, (i)
proper provision shall be made so that the Issuer shall create or otherwise make
available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a kind or kinds of security or securities having a fair
market value at least equal to the economic value of the Common Shares which
each holder of a Right would have been entitled to receive if the Issuer had
been a corporation or other Person having outstanding equity securities; and
(ii) all other provisions of this Agreement shall apply to the issuer of such
securities as if such securities were Common Shares.
(c) The Company shall not consummate any Flip-over Event, unless
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior to such consummation the Company and the
Issuer shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in subsections (a) and (b) of this
Section 13 and further providing that as promptly as practicable after the
consummation of any Flip-over Event, the Issuer shall:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities issuable
upon exercise of the Rights on an appropriate form, and shall use its
best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective
35
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(ii) take all 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; and
(iii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a) hereof.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SECURITIES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional Rights
otherwise would be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been issuable. The closing price 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 NASDAQ or, if
the Rights are not listed or admitted to
36
trading on NASDAQ, 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. 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 shall be used.
(b) The Company shall not be required to issue fractions of Common
Shares or other securities issuable upon exercise or exchange of the Rights or
to distribute certificates which evidence any such fractional securities. In
lieu of issuing any such fractional securities, the Company may pay to any
Person to whom or which such fractional securities would otherwise be issuable
an amount in cash equal to the same fraction of the current market value of one
such security. For purposes of this Section 14(b), the current market value of a
Common Share or other security issuable upon the exercise or exchange of Rights
shall be the closing price thereof (as determined in the same manner as set
forth for Common Shares in the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of such exercise or exchange;
provided, however, that if neither the Common Shares nor any such other
securities are publicly held or listed or admitted to trading on any national
securities exchange, or the
37
subject of available bid and asked quotes, the current market value of one
Common Share or such other security shall be determined in good faith by the
Board of Directors.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 and Section 20 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any Right
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 Right Certificate
(or, prior to the Distribution Date, of the holder of any Common Shares), may in
his, her or its own behalf and for his or her 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, her or its right to exercise the
Rights evidenced by such Right Certificate or Common Share certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares;
38
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the Person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate 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 shall be affected by
any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14 hereof; and
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) 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, that the Company shall use its best efforts to have any such
injunction, order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.
39
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Company which may at any time be issuable upon the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of Directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions of this Agreement or exchanged pursuant to the provisions of Section
27 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 other disbursements incurred in the
administration of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, suit, action, judgment,
proceeding, or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for any action taken, suffered or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement or the exercise or performance of its duties hereunder,
including, without limitation, the costs and expenses of defending against any
claim of liability arising therefrom, directly or indirectly.
40
(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 and the exercise and
performance of its duties hereunder in reliance upon any Right Certificate or
certificate evidencing Common Shares or 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 Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any Person resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the Shareholder Services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the
41
name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to action taken
or omitted by it in good faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking, suffering or omitting any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
Chief Executive Officer, Chief Financial Officer or any Vice President of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights
42
Agent for any action taken, suffered or omitted 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
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it have any liability for, nor be responsible for any
adjustment required under the provisions of Section 11 or Section 13 hereof
(including any adjustment which results in Rights becoming null and void) or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of stock or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of stock or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
43
(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 any
one of the Chairman of the Board, Chief Executive Officer, the Chief Financial
Officer or any Vice President of the Company, and to apply to such officers for
instructions in connection with its duties, and such instructions shall be full
authorization to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken or suffered to be taken by it in good
faith in accordance with such instructions of any such officer.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof. The Rights Agent shall not be under any duty
or
44
responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of Right
Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has either not been properly completed or indicates an
affirmative response to clause 1 or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise, transfer, split up,
combination or exchange without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 calendar days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 calendar days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30
calendar days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by
45
the Company or by such a court, shall be a (i) a Person organized and doing
business under the laws of the United States or of the States of Florida or New
York (or of any other state of the United States so long as such Person is
authorized to do business as a banking institution in the States of Florida or
New York, in good standing, having an office in the States of Florida or New
York, which is authorized under such laws to conduct or otherwise engage in the
shareholder services business or exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (ii) an Affiliate of such Person. 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 mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board of Directors to reflect any adjustment
or change in the Purchase Price per share and the number or
46
kind of securities issuable upon exercise of the Rights made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale by the Company of Common Shares following the Distribution Date and
prior to the Expiration Date, the Company (a) shall, with respect to Common
Shares so issued or sold pursuant to the exercise or conversion of securities
issued prior to the Distribution Date which are exercisable for, or convertible
into Common Shares, and (b) may, in any other case, if deemed necessary,
appropriate or desirable by the Board of Directors, issue Right Certificates
representing an equivalent number of Rights as would have been issued in respect
of such Common Shares if they had been issued or sold prior to the Distribution
Date, as appropriately adjusted as provided herein as if they had been so issued
or sold; provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, in its good faith judgment the Board of Directors
shall have determined that the issuance of such Right Certificate could have a
material adverse tax consequence to the Company or to the Person to whom or
which such Right Certificate otherwise would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
otherwise shall have been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION. (a) Prior to the Expiration Date, the
Board of Directors may, at its option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the Close
of Business on the later of (i) the Distribution Date and (ii) the Share
Acquisition Date.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights, and without any further action and without any
notice, the right to exercise the Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Promptly after the action of the Board of Directors ordering the redemption of
47
the Rights, the Company shall publicly announce such action, and within 10
calendar days thereafter, the Company shall give notice of such redemption to
the holders of the then-outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Company; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of the redemption of the Rights. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. The notice of redemption mailed to the
holders of Rights shall state the method by which the payment of the Redemption
Price will be made. The Company may, at its option, pay the Redemption Price in
cash, Common Shares (based upon the current per share market price of the Common
Shares (determined pursuant to Section 11(d) hereof) at the time of redemption)
or any other form of consideration deemed appropriate by the Board of Directors
(based upon the fair market value of such other consideration, determined by the
Board of Directors in good faith) or any combination thereof.
(c) At any time following the Share Acquisition Date, the Board of
Directors may relinquish the right to redeem the Rights under this Section 23 by
duly adopting a resolution to that effect. Immediately upon adoption of such
resolution, the rights of the Board of Directors to redeem the Rights shall
terminate without further action and without any notice. Promptly after adoption
of such a resolution, the Company shall publicly announce such action (with
prompt written notice to the Rights Agent of such action); provided, however,
that the failure to give, or any defect in, any such notice shall not affect the
validity of the action of the Board of Directors.
SECTION 24. NOTICE OF CERTAIN EVENTS. (a) In case, after the
Distribution Date, the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Common Shares or to make any other
distribution to the holders of Common Shares (other than a
48
regular periodic cash dividend), (ii) to offer to the holders of Common Shares
rights, options or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common Shares),
(iv) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Company and/or any of its Subsidiaries) representing more than 50% of the
assets and earning power of the Company and its Subsidiaries, taken as a whole,
to any other Person or Persons, (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
the Rights Agent and to each holder of a Right Certificate, 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 or offering of
rights, options or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common 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
10 calendar days prior to the record date for determining holders of the Common
Shares for purposes of such action, and, in the case of any such other action,
at least 10 calendar days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Shares,
whichever shall be the earlier.
(b) In case any Triggering Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right
49
Certificate, 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.
SECTION 25. NOTICES. (a) Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Staff Leasing, Inc. d/b/a Gevity HR
600 000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attention: Secretary
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
With a copy to:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
(c) Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
(or, if prior the Distribution Date, to the holder of any certificate evidencing
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. Prior to the Distribution
Date and subject to the last sentence of this Section 26, if the Company so
directs, the Company and the
50
Rights Agent shall 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 last sentence of this Section 26,
if the Company so directs, the Company and the Rights Agent shall supplement or
amend this Agreement without the approval of any holders of Right Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to supplement or amend the provisions hereunder in any manner which the
Company may deem desirable, including, without limitation, the addition of other
events requiring adjustment to the Rights under Sections 11 or 13 hereof or
procedures relating to the redemption of the Rights, which supplement or
amendment shall not, in the good faith determination of the Board of Directors,
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon
the delivery of a certificate from an officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 26 and, provided such supplement or amendment does not adversely change
or increase the Rights Agent's rights, duties, liabilities or obligations
hereunder, the Rights Agent shall execute such supplement or amendment;
provided, however, that the failure or refusal of the Rights Agent to execute
such supplement or amendment shall not affect the validity of any supplement or
amendment adopted by the Company, any of which shall be effective in accordance
with the terms thereof. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made which decreases the stated
Redemption Price or the period of time remaining until the Final Expiration Date
or which modifies a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable.
51
SECTION 27. EXCHANGE. (a) The Board of Directors may, at its
option, at any time after the later of the Distribution Date and the first
occurrence of a Triggering Event, exchange all or part of the then-outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any such Subsidiary, or any entity holding Common Shares for or pursuant to
the terms of any such plan), who or which, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to Section 27(a) hereof, and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right with respect to such Rights thereafter of the
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
Promptly after the action of the Board of Directors ordering the exchange of any
Rights pursuant to Section 27(a) hereof, the Company shall promptly notify the
Rights Agent in writing of such actions and shall publicly announce such action,
and within 10 calendar days thereafter shall give notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. Any notice which is
52
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange shall state the method
by which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company, at
its option, may substitute for any Common Share exchangeable for a Right, (i)
equivalent common shares (as such term is used in Section 11(a)(iii) hereof),
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value which the
Board of Directors shall have determined in good faith to be equal to the
current market value of one Common Share (determined pursuant to Section 11(d)
hereof) on the Trading Day immediately preceding the date of exchange pursuant
to this Section 27.
SECTION 28. SUCCESSORS; CERTAIN COVENANTS. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common 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 Right Certificates (or prior to the Distribution Date, the Common Shares).
53
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or 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, without limitation, a
determination to redeem or not redeem the Rights or to amend this Agreement,
whether a Person is an Acquiring Person and whether any proposed amendment
adversely affects the interests of the holders of Right Certificates). For all
purposes of this Agreement, any calculation of the number of Common Shares or
other securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act
as in effect on the date of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties, and (y) not subject the Board of Directors to any liability to the
holders of the Right Certificates. The Rights Agent shall always be entitled to
assume that the Board of Directors acted in good faith and shall be fully
protected and incur no liability in reliance thereon.
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or
54
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
internal substantive laws of the State of [FLORIDA] and for all purposes shall
be governed by and construed in accordance with the internal substantive laws of
such State applicable to contracts to be made and to be performed entirely
within such State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
Attest: Staff Leasing, Inc. d/b/a Gevity HR
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx Xxxx
---------------------------------- ------------------------------------
Xxxxxxx X. Xxxxxxx, Secretary Name: Xxxx Xxxx
Title: Chief Executive Officer
[SEAL]
Attest: American Stock Transfer & Trust Company
By:/s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- ------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
------------------------- ------------------------------------
Title: Assistant Secretary Title: Vice President
------------------------- ------------------------------------
56
EXHIBIT A
TO RIGHTS AGREEMENT
Certificate No. R- _____Rights
NOT EXERCISABLE AFTER APRIL 23, 2012 OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
STAFF LEASING, INC. D/B/A GEVITY HR
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of April 23, 2002 (the "Rights Agreement"), between Staff
Leasing, Inc. d/b/a Gevity HR, a Florida corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York corporation (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Eastern time) on April 23, 2012 at the principal office or offices of the
Rights Agent designated for such purpose, one fully paid nonassessable share of
common stock, par value $.01 per share (the "Common Shares"), of the Company, at
a purchase price of $39.60 per Common Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed. If this Right Certificate
shall be exercised in part, the holder
Exhibit A
1
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised. The number of
Rights evidenced by this Right Certificate (and the number of Common Shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of May 7, 2002,
based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of securities issuable upon the exercise of the Rights evidenced by
this Right Certificate are subject to adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent.
Pursuant to the Rights Agreement, from and after the later of the
Distribution Date and the first occurrence of a Flip-in Event (as such terms is
defined in the Rights Agreement), (i) any Rights that are or were acquired or
beneficially owned by any Acquiring Person (as defined in the Rights Agreement)
(or any Affiliate or Associate of such Acquiring Person) shall be void and any
such holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of the Rights Agreement, (ii) no Right Certificate
shall be issued pursuant to the Rights Agreement that represents Rights
beneficially owned by an Acquiring Person or any Affiliate or
Exhibit A
2
Associate thereof, (iii) no Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person or any Affiliate or Associate
thereof or to any nominee of such Acquiring Person or Affiliate or Associate
thereof, and (iv) any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person or any Affiliate or Associate thereof shall be
cancelled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the holder to purchase a like number of Common
Shares (or other securities, as the case may be) as the Right Certificate or
Right Certificates surrendered shall have entitled such holder (or former holder
in the case of a transfer) to purchase, upon presentation and surrender hereof
at the principal office of the Rights Agent designated for such purpose, with
the Form of Assignment (if appropriate) and the related Certificate duly
executed.
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 $0.01 per Right. The Rights Agreement may be supplemented and amended
by the Company, as provided therein.
The Company is not required to issue fractional Common Shares or other
securities issuable upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing such fractional Common Shares or other securities, the
Company may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented
Exhibit A
3
hereby, nor shall anything contained herein or in the Rights Agreement be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised in accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________, 200_.
ATTEST: STAFF LEASING, INC. d/b/a GEVITY HR
By: By:
--------------------------------------- --------------------------------
Name: Name:
---------------------------------- --------------------------
Title: Title:
---------------------------------- --------------------------
[SEAL]
Countersigned:
American Stock Transfer & Trust Company
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Exhibit A
4
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, __________________hereby sells, assigns and
transfers unto ________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated:_________________, 200__
_________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:________________, 200__
_________________________
Signature
Exhibit A
5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To Staff Leasing, Inc. d/b/a Gevity HR:
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Common Shares or
other securities issuable upon the exercise of such Rights and requests that
certificates for such securities be issued in the name of:
Please insert social
security or other identifying number:________________________________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining 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)
_______________________________________________________________________________
_______________________________________________________________________________
Optional Election to Exercise without Payment of Cash:
With respect to the exercise of ______________ of the Rights specified
above, the undersigned hereby elects to exercise such Rights without payment of
cash and to receive a number of Common Shares or other securities having a value
(as determined pursuant to the
Exhibit A
6
Rights Agreement) equal to the difference between (i) the value of the Common
Shares or other securities that would have been issuable upon the exercise
thereof upon payment of the cash amount as provided in the Rights Agreement, and
(ii) the amount of such cash payment.
Dated:________________, 200__
__________________________________
Signature
Signature Guaranteed:
Exhibit A
7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:_______________, 200__
_____________________________
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Signatures must be guaranteed by an "Eligible Guarantor Institution"
(with membership in an approved signature guarantee medallion program) pursuant
to Rule 17Ad-15 of the Securities Exchange Act of 1934.
Exhibit A
8
EXHIBIT B
TO RIGHTS AGREEMENT
TO: THE SHAREHOLDERS OF STAFF LEASING, INC. D/B/A GEVITY HR
RE: SUMMARY OF RIGHTS PLAN
The Board of Directors of Staff Leasing, Inc. d/b/a Gevity HR (the
"Company") has declared a dividend distribution of one right (a "Right") for
each outstanding share of Common Stock, par value $.01 per share (the "Common
Shares"), of the Company. The distribution is payable on May 7, 2002 (the
"Record Date") to the shareholders of record as of the close of business on the
Record Date. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock of the Company at a price of $39.60 per Common
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement, dated as of April 23, 2002
(the "Rights Agreement"), between the Company and American Stock Transfer &
Trust Company as Rights Agent (the "Rights Agent").
Until the earliest to occur of (i) the close of business on the tenth
business day (or such later date as may be specified by the Board of Directors)
following a public announcement that a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Shares (with certain
exceptions, an "Acquiring Person"), (ii) the close of business on the tenth
business day (or such later date as may be specified by the Board of Directors)
following the commencement of a tender offer or exchange offer by a person or
group of affiliated or associated persons the consummation of which would result
in beneficial ownership by such person or group (with certain exceptions) of 15%
or more of the outstanding Common Shares, or (iii) the close of business on the
tenth business day following the first date of public announcement of the first
occurrence of a Flip-in Event or a Flip-over Event (as such terms are
hereinafter defined) (the earliest of such dates being hereinafter called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificates.
The Rights Agreement provides that, in certain circumstances, the
ownership of 15% or more of the outstanding Common Shares by an "Excepted
Person" will not result in the Rights becoming exercisable. In general terms, a
person will be an Excepted Person if that person owns 15% or more of the
outstanding Common Shares at the time the Rights Plan becomes effective. A
person will continue to be an Excepted Person after such date so long as the
person does not increase his ownership of the outstanding Common Shares by more
than 1.5% over the amount owned when the Rights Plan becomes effective (or such
lesser amount as may be thereafter owned by such person).
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record
Exhibit B
1
Date upon transfer or new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender or transfer of
any certificates for Common Shares in respect of which Rights have been issued
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (the "Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
No Right is exercisable at any time prior to the Distribution Date. The
Rights will expire on April 23, 2012 (the "Final Expiration Date") unless
earlier redeemed or exchanged by the Company as described below. Until a Right
is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including without limitation the right to vote or to receive
dividends.
The Purchase Price payable, the number of outstanding Rights and the
number of Common Shares or other securities issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) upon the grant to holders of the
Common Shares of certain rights or warrants to subscribe for or purchase Common
Shares at a price, or securities convertible into Common Shares with a
conversion price, less than the then current market price of the Common Shares,
or (iii) upon the distribution to holders of the Common Shares of evidences of
indebtedness or cash (excluding regular periodic cash dividends), assets, stock
(excluding dividends payable in Common Shares) or of subscription rights or
warrants (other than those referred to above).
In the event (a "Flip-in Event") that (i) any person or group of
affiliated or associated persons becomes the beneficial owner of 20% or more of
the outstanding Common Shares, (ii) any Acquiring Person merges into or combines
with the Company and the Company is the surviving corporation or any Acquiring
Person effects certain other transactions with the Company, as described in the
Rights Agreement, or (iii) during such time as there is an Acquiring Person,
there shall be any reclassification of securities or recapitalization or
reorganization of the Company which has the effect 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 beneficially owned by the
Acquiring Person, proper provision shall be made so that each holder of a Right,
other than Rights that are or were owned beneficially by the Acquiring Person
(which, from and after the later of the Distribution Date and the date of the
earliest of any such events, will be void), will thereafter have the right to
receive, upon exercise thereof at the then current exercise price of the Right,
that number of Common Shares (or, under certain circumstances, an economically
equivalent security or securities of the Company) having a market value of two
times the exercise price of the Right.
To illustrate the operation of such an adjustment, at a Purchase Price
of $39.60, assuming the current market price (as determined pursuant to the
provisions of the Rights Agreement) per Common Share were $3.30, each Right not
owned beneficially by an Acquiring Person at or
Exhibit B
2
after the time of such an occurrence would entitle its holder to purchase (after
the Distribution Date) from the Company 24 Common Shares (having a market value
of $79.20) for $39.60.
In the event (a "Flip-over Event") that, following the first date of
public announcement that a person has become an Acquiring Person, (i) the
Company merges with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and the Company is
the surviving corporation, but its Common Shares are changed or exchanged, or
(iii) 50% or more of the Company's assets or earning power, including without
limitation securities creating obligations of the Company, are sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock (or, under certain
circumstances, an economically equivalent security or securities) of such other
person which at the time of such transaction would have a market value of two
times the exercise price of the Right.
At any time after the later of the Distribution Date and the first
occurrence of a Flip-in Event or a Flip-over Event and prior to the acquisition
by any person or group of affiliated or associated persons of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than any Rights which have become void), in whole or in part,
at an exchange ratio of one Common Share per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company is not required to issue fractional Common
Shares or other securities issuable upon the exercise of Rights. In lieu of
issuing such securities, the Company may make a cash payment, as provided in the
Rights Agreement.
The Company may redeem the Rights in whole, but not in part, at a price
of $0.01 per Right (the "Redemption Price"), at any time prior to the close of
business on the later of (i) the Distribution Date and (ii) the first date of
public announcement that a person has become an Acquiring Person. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
The Rights Agreement may be amended by the Company without the approval
of any holders of Right Certificates, including amendments which add other
events requiring adjustment to the Purchase Price payable and the number of
Common Shares or other securities issuable upon the exercise of the Rights or
which modify procedures relating to the redemption of the Rights, provided that
no amendment may be made which decreases the stated Redemption Price or the
period of time remaining until the Final Expiration Date or which modifies a
time period relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights is as of May 7, 2002, does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by this reference.
Exhibit B
3