EXHIBIT 2.1
FIRST AMENDED RIGHTS AGREEMENT
Dated as of August 5, 1998
by and between
XXXX'X INTERNATIONAL, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . 5
Section 3. Issuance of Right Certificates. . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration . . . . . . . . . . . . . . 7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. Cancellation and Destruction of Right Certificates. . . . . .10
Section 9. Reservation and Availability of Shares; Registration. . . . .11
Section 10. Record Date . . . . . . . . . . . . . . . . . . . . . . . . .11
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. . . . . . . . . . . . . . . . . . . . . . .12
Section 12. Certification of Adjusted Purchase Price
or Number of Shares . . . . . . . . . . . . . . . . . . . . .19
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. . . . . . . . . . . . . . . . . . . . . . .19
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . .22
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . .23
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . .23
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . .23
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . .24
Section 19. Merger or Consolidation or Chance of Name of Rights Agent . .24
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . .25
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PAGE
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . .26
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . .27
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . .27
Section 24. Notice of Proposed Action . . . . . . . . . . . . . . . . . .28
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Section 26. Supplements and Amendments. . . . . . . . . . . . . . . . . .29
Section 27. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 28. Successor . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 29. Determination and Actions Taken by the Board of Directors . .30
Section 30. Benefits of this Agreement. . . . . . . . . . . . . . . . . .31
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . .31
Section 32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .31
Section 33. Section Headings. . . . . . . . . . . . . . . . . . . . . . .31
Section 34. Severability. . . . . . . . . . . . . . . . . . . . . . . . .31
TABLE OF EXHIBITS
Exhibit A Form of Right Certificate . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Summary of First Amended Rights . . . . . . . . . . B-1
Exhibit C Form of Certificate of Designations of Junior
Participating Preferred Stock . . . . . . . . . . . . . . . C-1
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FIRST AMENDED RIGHTS AGREEMENT
THIS FIRST AMENDED RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of the 5th day of August, 1998, by and between Xxxx'x
International, Inc., a Delaware corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on March 3, 1989, the Board of Directors of the Company
authorized and declared the distribution of one right for (i) each share of
Common Stock of the Company (the "Common Stock") outstanding at the Close of
Business (as hereinafter defined) on March 15, 1989 (the "Rights Record Date"),
each right representing the right to purchase one Unit consisting, initially, of
one one-hundredth of a share of Junior Participating Preferred Stock, and (ii)
each additional share of Common Stock which shall become outstanding between the
Rights Record Date and the earliest of the Distribution Date, the Expiration
Date (as such terms are hereinafter defined) and the date, if any, on which such
rights may be redeemed, all upon the terms and subject to the conditions set
forth (each such right being hereinafter referred to as a "Right") in that
Rights Agreement (the "Prior Agreement"), dated March 3, 1989 by and between the
Company and the Rights Agent;
WHEREAS, on August 5, 1998, the Board of Directors of the Company
approved an amendment to the Prior Agreement to extend the Expiration Date of
the Rights to March 3, 2009;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for the benefit of the holders of Rights, the
parties hereby amend and restate the Prior Agreement to read as follows:
Section 1. CERTAIN DEFINITIONS
(a) For purposes of this Agreement, the following terms have the
meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner (within the meaning of Section 1(b)) of a
Substantial Block of Voting Stock, but shall not include (i) an Exempt
Person; (ii) any Person who or which acquires a Substantial Block of
Voting Stock in connection with a transaction or series of
transactions approved prior to such transaction or transactions by the
Board of Directors of the Company; or (iii) any Person who or which
acquires, or becomes the Beneficial Owner of, a Substantial Block of
Voting Stock solely as a result of a decrease in the number of
outstanding shares of Voting Stock resulting from a stock repurchase
program or other similar plan of the Company, provided that the term
"Acquiring Person" shall include such Person from and after the first
date upon which (x) such Person, since the date of the commencement of
such stock repurchase program or other similar plan of the Company,
shall have
acquired Beneficial Ownership of, in the aggregate, a number of
shares of Voting Stock of the Company equal to one percent
(1%) or more of the shares of Voting Stock of the Company then
outstanding, and (y) such Person, together with all Affiliates and
Associates of such Person, shall Beneficially Own a Substantial Block
of the Voting Stock then outstanding.
"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 as of the date
hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., Los
Angeles time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day it shall mean 5:00 p.m., Los Angeles time, on the
next succeeding Business Day.
"COMMON STOCK" shall have the meaning assigned to it in the
recital; and "COMMON STOCK" when used with reference to Persons other
than the Company shall mean: (i) in the case of Persons organized in
corporate form, the capital stock or equity security with the greatest
voting power of such Person or, if such Person is a Subsidiary of
another Person, of the Person or Persons which ultimately control such
first-mentioned Person: and (ii) in the case of Persons not organized
in corporate form, the units of beneficial interest which (A)
represent the right to participate generally in the profits and losses
of such Person (including without limitation any flow-through tax
benefits resulting from an ownership interest in such Person) and
(B) are entitled to exercise the greatest voting power of such Person
or, in the case of a limited partnership, shall have the power to
remove the general partner or partners.
"CONTINUING DIRECTOR" shall mean any member of the Board of
Directors of the Company (while such Person is a member of the Board)
who (i) is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, and (ii) either (A) was a member of the
Board of Directors prior to the time any Person became an Acquiring
Person, or (B) became a member of the Board of Directors subsequent to
the time any Person became an Acquiring Person, if such Person's
nomination for election, or re-election, to the Board was recommended,
or approved, by a majority of the Continuing Directors then in office.
"DISTRIBUTION DATE" shall have the meaning assigned to it in
Section 3(a).
"EQUIVALENT STOCK" shall have the meaning assigned to it in
Section 7(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
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"EXEMPT PERSON" shall mean the Company, any Subsidiary of the
Company and any employee benefit plan or employee stock or stock
option plan of the Company or of any Subsidiary of the Company, or any
trust or other entity organized, established or holding shares of
Common Stock by, for or pursuant to, the terms of any such plan.
"EXPIRATION DATE" shall have the meaning assigned to it in
Section 7(a).
"OFFER DATE" shall have the meaning assigned to it in Section
3(a).
"PERSON" shall mean any individual, firm, corporation,
partnership, trust or other entity and shall include any successor by
merger (or otherwise) of any of the foregoing.
"PRINCIPAL PARTY" shall have the meaning assigned to it in
Section 13(b).
"PURCHASE PRICE" shall have the meaning assigned to it in Section
4(a).
"QUALIFIED OFFER" shall mean a tender or exchange offer for all
outstanding Common Stock at a price and on terms determined by at
least a majority of the members of the Board of Directors who are not
officers of the Company to be adequate and otherwise in the best
interests of the Company and its stockholders (other than the Person
or an Affiliate or Associate thereof on whose behalf the offer is
made).
"REDEMPTION PRICE" shall have the meaning assigned to it in
Section 23(a).
"RIGHT" shall have the meaning assigned to it in the recital.
"RIGHTS RECORD DATE" shall have the meaning assigned to it in the
recital.
"SUBJECT SHARES" shall mean the class or series of shares then
issuable on exercise of the Rights.
"STOCK ACQUISITION DATE" shall mean the date of the first public
announcement by the Company or an Acquiring Person (which, for
purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) under the Exchange Act) that an
Acquiring Person has become such.
"SUBSIDIARY" shall mean, with respect to any Person, a
corporation or other entity the securities or other ownership
interests of which having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person
and any Affiliate of such Person.
"SUBSTANTIAL BLOCK" shall mean a number of shares of Voting Stock
having in the aggregate 25 percent or more of the general voting
power.
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"TRADING DAY" shall have the meaning assigned to it in Section
11(d).
"UNIT" shall mean the shares or other securities issuable upon
exercise of one Right, initially one one-hundredth of a share of
Junior Participating Preferred Stock of the Company having the rights
and preferences set forth in Exhibit C, before any adjustment pursuant
to Section 11(a)(ii) or Section 13.
"VOTING STOCK" shall mean shares of the Company's capital stock
the holders of which have general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors
of the Company.
(b) For purposes of this Agreement, a Person shall be deemed the
"BENEFICIAL OWNER" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of any conversion,
exchange or purchase rights (other than the Rights), warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
payment or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of 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 if the
agreement, arrangement or understanding to vote such security (1)
arises solely from the grant of a revocable proxy or consent given to
such Person in connection with a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, and (2) is not also then
reportable on Schedule 13D (or any comparable or successor report)
under the Exchange Act; provided, further, that a Person engaged in
business as an underwriter of securities shall not be deemed the
"Beneficial Owner" of securities acquired through such person's
participation in good faith in a firm commitment underwriting until
the expiration of the 40-day period immediately following the date of
such acquisition.
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
4
hereof, and the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agent or Agents as it may deem
necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the Close of Business on the earlier of (i) the tenth
Business Day after a Stock Acquisition Date or (ii) the tenth Business Day after
the date of the commencement by any Person (other than an Exempt Person) of, or
the date of the first public announcement (such commencement date or
announcement date being herein referred to as the "Offer Date") of the intent of
any Person (other than an Exempt Person) to commence, a tender or exchange offer
(as determined by reference to Rule 14d-2 (a) (or any successor rule) under the
Exchange Act) upon the successful consummation of which such Person, together
with its Affiliates and Associates, would be the Beneficial Owner of 30 percent
or more of the then outstanding Voting Stock (irrespective of whether any shares
are actually purchased pursuant to such offer) (the tenth Business Day after the
first to occur of a Stock Acquisition Date or an Offer Date being herein
referred to as the "Distribution Date"),
(i) the Rights will automatically attach to, and be evidenced
by, the certificates for Common Stock registered in the names of the
holders of Common Stock (which certificates for Common Stock shall be
deemed also to be Right Certificates) and not by separate Right
Certificates, and
(ii) each Right will be transferable only in connection with the
transfer of Common Stock;
provided, however, that a Distribution Date shall be deemed not to have occurred
on the tenth Business Day after an Offer Date if, prior to the Close of Business
on such tenth Business Day, the Company's Board of Directors declares that such
tenth Business Day shall not be considered a Distribution Date.
As soon as practicable after the Distribution Date, the Rights Agent
will mail, by first-class, insured, postage prepaid mail, to each record holder
of Common Stock as of the Close of Business on the Distribution Date, as shown
by the records of the Company at the Close of Business on the Distribution Date,
at the address of such holder shown on such records, a Right Certificate, in
substantially the form of Exhibit A hereto, evidencing one Right for each share
of Common Stock so held.
(b) As soon as practicable after the date hereof, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit B, by first-class mail, postage prepaid, to each record holder of Common
Stock as of the Close of Business on the Rights Record Date, at the address of
such holder shown on the records of the Company.
(c) The Company will cause certificates for Common Stock issued after
the Rights Record Date (including replacement certificates for shares of Common
Stock outstanding on or prior to the Rights Record Date), but prior to the
earliest of (i) the Distribution Date, (ii)
5
the Expiration Date and (iii) the date, if any, on which the Rights may be
redeemed, to have impressed on, printed on, written on or otherwise affixed
to them the following legend:
This certificate also entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent, as the same shall be
amended from time to time (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to or held by, any
Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement)
or certain transferees of any thereof, whether currently held by or on
behalf of such Person or by any subsequent holder, may be limited as
provided in Section 7(f) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
(d) Until the Distribution Date, the surrender for transfer of any of
the certificates for Common Stock outstanding on or after the Rights Record
Date, with or without a copy of the Summary of Rights attached thereto and with
or without the legend set forth in subsection (c) above, shall also constitute
the transfer of the Rights associated with such Common Stock. After the
Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of assignment and
certification and of election to purchase shares to be printed on the reverse
thereof) shall be in substantially the form of Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of Section
22, the Right Certificates, whenever issued, evidencing Rights issued on the
Rights Record Date shall be dated as of the Rights Record Date and Right
Certificates evidencing Rights associated with shares of Common Stock issued
after the Rights Record Date shall be dated as of the date of such issuance, and
on their face shall entitle the holders thereof to purchase such number of
shares of Common Stock or Units as shall
6
be set forth therein, as the same may from time to time be adjusted (as
provided herein), at the price per share set forth therein (the "Purchase
Price"), as the same may from time to time be adjusted as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
22 that represents Rights Beneficially Owned by: (i) an Acquiring Person or any
Associate or Affiliate of any Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(f), and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible and reasonably identifiable as such) the
following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement) or certain transferees thereof. Accordingly, under certain
circumstances as provided in the Rights Agreement, this Right Certificate
and the Rights represented hereby may be limited as provided in Section
7(f) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its President or a Vice President, either manually or by facsimile signature,
and 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 Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer (as specified above) of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its stock transfer office, which as of the date hereof is
located at ChaseMellon Shareholder Services, L.L.C., 000 Xxxxx Xxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, books for
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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 Right
Certificate, the date of each Right Certificate and the number of each Right
Certificate.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(f) and
Section 14, at any time after the Close of Business on the Distribution Date,
and prior to the Close of Business on the Expiration Date or the day prior to
the day, if any, on which the Rights are to be redeemed pursuant to Section 23,
any Right Certificate or Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase such number of shares as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate(s) to be transferred, split up,
combined or exchanged, with the form of assignment on the reverse side(s)
thereof duly completed and executed, at the stock transfer office of the Rights
Agent. Thereupon the Rights Agent shall countersign and deliver to the persons
entitled thereto the Right Certificate(s) 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. Notwithstanding the foregoing, neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate unless and until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate, if
mutilated, the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(f), and unless earlier redeemed as provided
in Section 23, the registered holder of any Right Certificate may exercise the
Rights evidenced thereby in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly completed and executed, to the Rights
Agent at the stock transfer office of the Rights Agent, together with payment of
the
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Purchase Price for each Unit as to which the Rights are exercised, at or
prior to the Close of Business on March 3, 2009, or such other date to which
the Rights may be extended as provided in this Agreement (the latest of such
dates being herein referred to as the "Expiration Date"). If at any time
after the Distribution Date but prior to the Expiration Date the Company is
unable, under its Certificate of Incorporation, to issue the number and class
of shares required to be issued upon the exercise of all of the outstanding
Rights, the Company may issue upon exercise of any of the Rights shares of
capital stock or other securities of the Company of equivalent value to the
shares so required to be issued ("Equivalent Stock"), as determined by the
Board of Directors.
(b) The Purchase Price for each Unit pursuant to the exercise of a
Right shall initially be $100, shall be subject to adjustment from time to time
as provided in Sections 11 and 13 and shall be payable in lawful money of the
United States of America.
(c) Upon receipt of a Right Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable transfer tax in
cash, or by certified check, bank draft or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) requisition from the
Company or any transfer agent of the Company a certificate for the number of
shares to be purchased and the Company will comply, and hereby irrevocably
authorizes its transfer agent to comply, with all such requests, (ii)
requisition from the Company the amount of cash to be paid in lieu of issuance
of a fractional share when appropriate, in accordance with Section 14, and (iii)
promptly after receipt of such certificate from any such transfer agent, cause
the same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt promptly deliver such cash in lieu
of a fractional share to or upon the order of the registered holder of such
Right Certificate; provided, however, that in the case of the purchase, in
connection with the exercise of a Right, of securities other than shares of
stock, the Rights Agent shall promptly take the appropriate actions with respect
thereto as shall as nearly as practicable correspond to the actions described in
the foregoing clauses (i) through (iii).
(d) The Company shall not be required to pay any transfer tax which
may be payable in respect of any transfer involved in the transfer or delivery
of Right Certificates, or the issuance or delivery of certificates 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 upon
the exercise of any Rights, until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
(e) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
(f) Notwithstanding any provision of this Agreement to the contrary,
upon the occurrence of any of the events described in any of clauses (A), (B),
(C) or (D) of Section
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11(a)(ii), the adjustment provided for under Section 11(a)(ii) shall not
apply with respect to any Rights that are at the time of the occurrence of
such event Beneficially Owned by (i) an Acquiring Person or by any Associate
or Affiliate of such Acquiring Person (which Acquiring Person or Affiliate or
Associate engages in, or realizes the benefit of, one or more of the
transactions described in clause (A) or clause (B) of Section 11(a)(ii),
realizes the benefits set forth in clause (C) of Section 11(a)(ii) or, alone
or together, become the Beneficial Owner(s) of a Substantial Block of Voting
Stock as provided in clause (D) of Section 11(a)(ii), as the case may be), or
(ii) a transferee of an Acquiring Person or of any Associate or Affiliate of
such Acquiring Person (which Acquiring Person or Associate or Affiliate
engages in, or realizes the benefit of, one or more of the transactions
described in clause (A) or clause (B) of Section 11(a)(ii), realizes the
benefits set forth in clause (C) of Section 11(a)(ii) or, alone or together
with such Acquiring Person or any such Associate or Affiliate, become the
Beneficial Owner(s) of a Substantial Block of Voting Stock as provided in
clause (D) of Section 11(a)(ii), as the case may be) (A) who becomes a
transferee after the Acquiring Person becomes such, or (B) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (1) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring Person has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(f). Upon
the exercise of such Rights, the holders thereof shall be entitled to
receive, upon payment of the Purchase Price, the number of shares issuable
upon exercise of a Right without giving effect to the adjustment provided for
under Section 11(a)(ii). The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(f) and Section 4(b) are complied
with, but shall have no liability to any holder of Right Certificates or
other Person as a result of its making or failing to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(g) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall 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,
10
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES; REGISTRATION.
(a) The Company covenants and agrees that it shall (i) on or prior to
the Rights Record Date, take all such action as shall be necessary to cause to
be reserved and kept available out of its authorized and unissued capital stock,
the number, class and series of shares capital stock that will be sufficient to
permit the exercise in full of all Rights to be outstanding as of the Rights
Record Date, (ii) no later than promptly following the Distribution Date, take
all such action as shall be necessary to cause to be reserved and kept available
out of its authorized and unissued capital stock, or its authorized and issued
shares held in its treasury, the number of additional shares that will, from
time to time, be sufficient to permit the exercise in full of all Rights from
time to time outstanding, (iii) take all such action as may be necessary to
insure that all shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable, and (iv) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares upon the exercise of Rights
(except as otherwise provided in Section 7(d)).
(b) The Company agrees to take all such action, from and after the
Distribution Date, as may be necessary or appropriate to permit the issuance of
shares in connection with the exercise of the Rights, including any required
registration under (i) the Securities Act of 1933, as amended from time to time
(the "Securities Act"), and (ii) the securities or "blue sky" laws of the
various states, in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement or statements for the purpose of effecting any such registration and
permit such statement(s) to become effective. At the commencement and
termination of any such suspension, the Company shall issue a public
announcement and shall provide written notice to the Rights Agent, stating that
the exercisability of the Rights has been temporarily suspended, or that such
suspension has terminated, as the case may be. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement has been declared effective.
(c) If and so long as the stock issuable upon the exercise of Rights
is listed on any national securities exchange, the Company shall use its
reasonable efforts to cause all shares reserved for issuance upon exercise of
Rights to be listed on such exchange upon official notice of issuance upon such
exercise.
Section 10. RECORD DATE. Each Person in whose name any stock
certificate is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the 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 any applicable transfer taxes) was made. Prior to the exercise of the
Rights
11
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which
the Rights shall be exercisable, including without limitation the right to
vote or to receive dividends or other distributions, and such holder shall
not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare and pay a dividend on the shares which are subject to
the Rights ("Subject Shares") payable in shares of stock of the Company, (B)
subdivide or split the Subject Shares, (C) combine or consolidate the Subject
Shares into a smaller number of shares or effect a reverse stock split of the
outstanding shares or (D) issue any shares of its capital stock in a
reclassification of the Subject Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, and in each such event, except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
split, reverse split, combination, consolidation or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive 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 transfer books of the Company were open, he would
have received upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, split, reverse split, combination, consolidation or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that at any time after the date of this
Agreement
(A) any Acquiring Person, or any Associate or
Affiliate of any Acquiring Person, directly or indirectly (1)
shall merge into the Company or any of its Subsidiaries or
otherwise combine with the Company or any of its Subsidiaries
and the Company or such Subsidiary shall be the continuing or
surviving corporation of such merger or combination and the
Common Stock shall remain outstanding and the outstanding
shares thereof shall not be changed into or exchanged for
stock or other securities of the Company or of any other
Person or cash or any other property, or (2) shall sell or
otherwise transfer in one or more transactions, assets to the
Company or any of its Subsidiaries in exchange for 50 percent
or more of the shares of any class of capital stock of the
Company or any of its Subsidiaries, and the Common Stock shall
remain outstanding and unchanged, or
12
(B) directly or indirectly, any Acquiring Person,
or any Associate or Affiliate of any Acquiring Person, shall
(1) in one or more transactions, 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 capital
stock of the Company or any of its Subsidiaries or other
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 by
the Company or such Subsidiary to all holders of Common
Stock), (2) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise dispose (in one or more transactions),
to, from or with, as the case may be, the Company or any of
its Subsidiaries, assets on terms and conditions less
favorable to the Company or such Subsidiary than the Company
or such Subsidiary would be able to obtain in arm's-length
negotiation with an unaffiliated third party, (3) receive any
compensation from the Company or any of the Company's
Subsidiaries other than compensation for full-time employment
as a regular employee, or fees for serving as director, at
rates in accordance with the Company's (or its Subsidiaries')
past practices, or (4) receive the benefit, directly or
indirectly (except proportionately as a stockholder), of any
loans, advances, guarantees, pledges or other financial
assistance provided by the Company or any of its Subsidiaries,
on terms and conditions less favorable to the Company or such
Subsidiary than the Company or such Subsidiary would be able
to obtain in arm's-length negotiation with an unaffiliated
third party, or
(C) during any 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 similar 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 or any Affiliate or Associate of
such Acquiring Person) which has the effect, directly or
indirectly, of increasing by more than one percent 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 which is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any
Acquiring Person, or
(D) any Person (other than (x) an Exempt Person,
(y) any Person who or which acquires a Substantial Block of
Voting Stock in connection with a transaction or series of
transactions approved prior to such transaction or series of
transactions by the Board of Directors of the Company, or (z)
any Person who or which acquires, or becomes the Beneficial
owner of, a Substantial Block of Voting Stock solely as a
result of a decrease in the number of outstanding shares of
Voting Stock resulting from a stock repurchase program or
other similar
13
plan of the Company unless such person subsequent to the date
of the commencement of such stock repurchase program or plan
becomes an Acquiring Person as defined in Section 1(a) hereof)
alone or together with all Affiliates and Associates of such
Person, shall become the Beneficial Owner of a Substantial
Block of Voting Stock otherwise than pursuant to a Qualified
Offer,
then, and in each such case, but subject to the provisions of Section 27, proper
provision shall be made so that each holder of a Right, except as provided below
and in Section 7(f), shall, on and after the later of (I) the date of the
occurrence of an event described in clause (A), (B), (C) or (D) of this
Section 11(a)(ii), or (II) the date of the expiration of the period within which
the Rights may be redeemed pursuant to Section 23 (as the same may have been
Amended as provided in Section 26) have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number of shares of Common Stock as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of Units for which a Right is then exercisable and dividing that product by (y)
50 percent of the current market price per share of Common Stock (determined in
accordance with Section 11(d)) on the date of the occurrence of the relevant
event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii);
PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then only
the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). The Company shall not consummate any such
merger, combination, transfer or transaction referred to in any of such clauses
(A), (B) and (C) unless prior thereto there shall be sufficient authorized but
unissued Common Stock to permit the exercise in full of the Rights in accordance
with the foregoing sentence, unless the Board of Directors has determined to
issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that
in no case may the Company consummate any such merger, combination, transfer or
transaction if at the time of or immediately after such transaction there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
In the event that the Company issues Equivalent Stock upon the
exercise of any Rights pursuant to the immediately preceding paragraph, then,
upon any such exercise, proper provision shall be made so that the holder of a
Right (except as provided in Section 7(f)) shall have the right to receive, upon
such exercise at the then current Purchase Price in accordance with the terms of
this Agreement, such number of shares or other units of Equivalent Stock of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of Units for which a Right is then exercisable and
dividing that product by (y) 50 percent of the current market price per share or
other unit of the Equivalent Stock of the Company (determined on substantially
the same basis as is prescribed by Section 11(d) with respect to the valuation
of Common Stock) on the date of occurrence of the relevant event listed above in
clause (A), (B), (C) or (D) of this subparagraph (ii). In the event that at any
time the Company should be prohibited by law, by any provision of its
Certificate of Incorporation, or by any instrument or agreement to which the
Company is a party or by which it is bound, from issuing, or should be unable
under its Certificate of Incorporation to issue, sufficient Equivalent Stock to
permit the exercise of all outstanding Rights in accordance with the foregoing
sentence,
14
then, in lieu of issuing such Equivalent Stock upon such exercise, the
Company shall pay to each holder of a Right (except as provided in Section
7(f)) upon surrender of the Right as provided herein but without payment of
the Purchase Price, an amount in cash for each Right equal to the Purchase
Price.
(b) In case the Company shall at any time after the Rights Record
Date fix a record date for the issuance of rights or warrants to all holders
of Common Stock or Subject Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Common Stock or Subject Shares or securities convertible into Common Stock or
Subject Shares at a price per share (or having a conversion price per share,
if a security convertible into Common Stock) less than the current market
price per share (determined in accordance with Section 11(d)) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the total
number of shares of Common Stock and Subject Shares outstanding on such
record date plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and of which the
denominator shall be the total number of shares of Common Stock and Subject
Shares outstanding on such record date plus the number of additional shares
to be offered for subscription or purchase (or into which the convertible
securities to offered are initially convertible). In case such subscription
or purchase price may be paid, in whole or in part, in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall at any time after the Rights Record
Date fix a record date for the making of a distribution on the shares of Common
Stock or the Subject Shares, whether by way of a dividend, distribution,
reclassification of stock, recapitalization, reorganization or partial
liquidation of the Company or otherwise (and including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation), of subscription rights or warrants (excluding those
referred to in Section 11(b)), evidences of indebtedness or other assets (other
than (i) regular periodic cash dividends, (ii) a dividend payable in Common
Stock or (iii) a distribution which is part of or is made in connection with a
transaction to which Section 11(a)(ii) or Section 13 applies), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be the current market price per share of
Common Stock (determined in accordance with Section 11(d)) on such record date,
less the fair market value applicable to one share of Common Stock (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
such assets or evidences of indebtedness or of such subscription rights or
warrants so to be distributed, and of which the
15
denominator shall be such current market price per share of Common Stock.
Such adjustment, shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date: PROVIDED, HOWEVER, that
in the event that the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of Common
Stock, and prior to the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, then, and in each such case, the current
market price shall be appropriately adjusted to reflect the current market price
per share of Common Stock in connection with ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc., Automated
Quotation System ("NASDAQ"). If on any such date the shares of Common Stock are
not quoted by any such organization, the fair market value of such shares on
such date as determined in good faith by the Board of Directors of the issuer of
such Common Stock shall be used. Any such determination of current market price
shall be described in a statement filed with the Rights Agent.
For purposes of this Agreement, the term "Trading Day" shall mean a
day on which the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading is open for the transaction
of business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day.
For the purpose of any computation hereunder, the "current market
price" of a Unit shall be deemed to be equal to the current market price per
share of Common Stock, and the "current market price" of a Subject Share
shall be deemed to be equal to the current market value per share of Common
Stock divided by the number of Subject Shares which comprise a Unit.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent 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-hundredth of a share,
16
as the case may be. Notwithstanding the proviso to 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 gives rise to such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) In the event that at any time, as a result of an adjustment made
pursuant to Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
shares of Common Stock, thereafter the number of such other shares 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 such shares, contained in Sections 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the shares of Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall represent the right to
purchase, at the adjusted Purchase Price, the number of shares purchasable from
time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest one-hundredth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares purchasable upon the exercise of each Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of shares of Common Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-hundredth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of the election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates ave 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 Section 14, the additional Rights to which such holders
shall be entitled as
17
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 of shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the shares issuable upon exercise
of the Rights, the Company shall use its best efforts to take all 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 shares at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares or securities of the Company, if any, issuable upon such exercise
over and above the shares issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such adjustments in the number of
shares which may be acquired upon exercise of the Rights, and such
adjustments in the Purchase Price, in addition to those adjustments expressly
required by the other subsections of this Section 11, as and to the extent
that the Company, in its sole discretion, shall determine to be advisable, in
order that, in the event of (i) any reclassification, consolidation or
subdivision of the Common Stock, (ii) any reorganization or partial
liquidation of the Company or similar transaction, (iii) any issuance wholly
for cash of any Common Stock at less than the current market price, (iv) any
issuance wholly for cash of Common Stock or securities which by their terms
are convertible into or exchangeable for Common Stock, (v) any stock
dividends or (vi) any issuance of rights, options or warrants, hereafter made
by the Company to holders of its Common Stock as provided herein-above in
this Section 11, (x) the holders of the Rights in any such event shall be
treated equitably and in accordance with the purpose and intent of this
Agreement, and (y) to the extent reasonably possible, such event shall not,
in the opinion of counsel for the Company, result in the stockholders of the
Company being subject to any United States federal income tax liability by
reason thereof.
18
Section 12. CERTIFICATION OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13, the
Company shall (i) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (ii) promptly
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate, and (iii) mail a brief summary thereof to each holder
of a Right Certificate in accordance with Section 25. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of, or the force or effect of, the requirement for such
adjustment.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, at any time after a Stock Acquisition Date,
directly or indirectly,
(i) the Company shall consolidate with, or merge
with and into, any other Person and the Company shall not be
the continuing or surviving corporation of such consolidation
or merger,
(ii) any other Person(s) shall consolidate or
merge with and into the Company, the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such consolidation or merger, all or part of
the Common Stock shall be changed into or exchanged for stock
or other securities of the Company or 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 aggregating more than 50 percent of the assets
or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person, (other than a pro rata
distribution by the Company of assets (including securities)
of the Company or any of its Subsidiaries to all holders of
the Company's Common Stock),
then, on and after the later of (I) the date of the occurrence of an event
described in clause (i), (ii) or (iii) of this Section 13(a), or (II) the date
of the expiration of the period within which the Rights may be redeemed pursuant
to Section 23 (as the same may have been amended as provided in Section 26)
(A) proper provision shall be made so that each
holder of a Right shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of
shares of common stock of the Principal Party as shall be
equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of Units for which a
Right is then exercisable and dividing that product by (y) 50
percent of the current market price per share of the common
stock of the Principal Party (determined in the same manner as
the current market price of Common
19
Stock is determined under Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer;
(B) the Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement, and proper provision
shall be made for the foregoing, provided that the Principal
Party shall, prior to the first occurrence of an event
described in clause (i), (ii) or (iii) of this Section 13(a),
have caused to be reserved out of its authorized and unissued
shares of common stock (or its authorized and issued shares of
common stock held in its treasury), for issuance pursuant to
this Agreement, the number of shares of common stock that will
be sufficient to permit the exercise in full of the Rights
after the occurrence of such event;
(C) the term "Company" wherever used in this
Agreement shall hereafter be deemed to refer to such Principal
Party; and
(D) the Principal Party shall, in addition to the
reservation of shares of its common stock as provided in the
proviso to clause (B) above, take such steps (including
without limitation compliance with the Company's other
obligations as set forth in Section 9) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights;
PROVIDED, HOWEVER, that, upon the subsequent occurrence of any
merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights,
warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such
transaction, owned the shares of common stock of the Principal
Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares,
rights, warrants and other property.
(b) For purposes of this Agreement, "Principal Party" shall mean
(i) in the case of any transaction described in
clause (i) or (ii) of Section 13(a), (A) the Person that is
the issuer of the securities into which shares of Common Stock
are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer the common stock of
which has the greatest market value, or (B) if no securities
are so issued, (x) the Person that is the other party to the
merger or consolidation and that survives said merger or
consolidation, or, if there is more than one such Person, the
Person the common stock of which has the greatest market value
or (y)
20
if the Person that is the other party to the merger or
consolidation does not survive the merger or consolidation,
the Person that does so survive "including the Company if it
survives); and
(ii) in the case of any transaction described in
clause (iii) of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or
transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be
determined, whichever of such Persons is the issuer of common
stock having the greatest market value of shares outstanding
PROVIDED, HOWEVER, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another corporation the common stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation; (2) if the common stock of such Person is not and has not been so
registered and such Person is not a direct or indirect Subsidiary of another
corporation the common stock of which is and has been so registered, "Principal
Party" shall refer to the corporation which ultimately controls such Person; (3)
in case such Person is a Subsidiary, directly or indirectly, of more than one
corporation, the common stocks of all of which are and have been so registered,
"Principal Party" shall refer to whichever of such corporations is the issuer of
common stock having the greatest market value of shares held by the public; and
(4) if the common stock of such Person is not and has not been so registered and
such Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in clauses (1), (2) and (3) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such Person
were a "Subsidiary" of both or all of such joint venturers and the Principal
Party in each such chain shall bear the obligations set forth in this Section 13
in the same ratio as its direct or indirect interests in such Person bear to the
total of such interests
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and the Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement making
valid provision for the results described in clause (A) of Section 13(a) and
confirming that the Principal Party will perform its obligations under this
Section 13(a): PROVIDED, HOWEVER, that in no case may the Company consummate any
such consolidation, merger, sale or transfer if (i) at the time of or
immediately after such transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (ii) prior to, simultaneously with or immediately
after such transaction, the shareholders of the Person which constitutes, or
would constitute, the Principal Party for purposes of this Section 13 shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
21
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or Xxxxx or other transfers. This Section
13 shall not be applicable to a transaction described in Subparagraphs (i), (ii)
or (iii) of Subsection (a) of this Section if (i) such transaction is
consummated with a Person or Persons who acquired Common Stock pursuant to a
Qualified Offer (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transaction or
distributable to shareholders upon conclusion of such transaction is not less
than the price per share of Common Stock paid to all holders of Common Stock
whose shares were purchased pursuant to such Qualified Offer and (iii) the form
of consideration being offered to the remaining holders of Common Stock pursuant
to such transaction or distributable to shareholders upon conclusion of such
transaction is the same as the form of consideration paid pursuant to such
Qualified Offer. Upon conclusion of any transaction described in the foregoing
sentence, all Rights shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. If the
Company shall elect not to issue such fractional Rights, in lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such Fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in 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 average
of the high bid and low asked prices in the over-the-counter market, as reported
by NASDAQ. If on any such date the Rights are not quoted by any such
organization, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used. Any such
determination of current market value shall be described in a statement filed
with the Rights Agent.
(b) The Company shall not be required to issue fractions of shares
upon exercise of a Right or to distribute certificates which evidence fractional
shares. In lieu of fractional shares, the Company shall pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a share of Common Stock. For purposes of this Section 14, the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of Section
11(d)) for the Trading Day immediately prior to the date of such exercise.
22
(c) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of the
Common Stock), and any registered holder of any Right Certificate (or, prior to
the Distribution Date, any registered holder of the Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, any other registered holder of the Common
Stock), may, on his own behalf and for his own benefit, enforce, and may
institute and maintain, any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) on and after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent and then if
surrendered at the stock transfer office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(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 Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
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 Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such any of the rights of a 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
23
affecting stockholders (except as provided in Section 24), or to receive
dividend, or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense incurred, without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or Certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it, acting with reasonable care, to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
So long as the Rights are listed on the New York Stock Exchange, the
Rights Agent, if its principal offices are located outside New York City, shall
maintain in the New York City area facilities for the servicing of the Rights in
the area of Manhattan located south of Xxxxxxxx Street. Such facilities may
consist of either an office or agency where transactions in the Rights are
serviced directly or a "drop" where Common Stock certificates, Right
Certificates, and other instruments relating to transactions in Rights may be
received for redelivery to an office or agency outside New York City, all in
accordance with the provisions of Section 6 of the Company Manual of the New
York Stock Exchange.
Section 19. MERGER OR CONSOLIDATION OR CHANCE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so
24
countersigned, and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
(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 any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President,
a Vice President, the General Counsel, or the Secretary of the Company and
delivered to the Rights Agent, and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof
25
by the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof), nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate, nor shall it be
responsible for any adjustment required under the provisions of Section 11 or
13 or responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment), nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performance by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, a Vice President, the General Counsel
or the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first obtaining the Company's approval.
Section 21. CHANGE OF RIGHTS AGENT. Unless the Company and the
Rights Agent agree to a shorter time period, the Rights Agent or any successor
Rights Agent may resign and be
26
discharged from its duties under this Agreement upon 15 days' notice in
writing mailed to the Company and to each transfer agent of Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. Unless the Company and the Rights Agent agree to a shorter
time period, the Company may remove the Rights Agent or any successor Rights
Agent upon 15 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
Common Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 15 days after such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be either (a) a
corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, which is authorized
under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000 or (b) an affiliate of such a corporation. 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
Common Stock and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Expiration Date, the Purchase Price per share or the number or
kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option and
as provided herein, and notwithstanding the provisions of Sections 11 and 13 of
this Agreement, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the date hereof (such redemption price being herein
referred to as the Redemption Price") at any time up to the Close of Business on
the tenth Business Day after a
27
Stock Acquisition Date; PROVIDED, HOWEVER, the Board of Directors of the
Company may authorize the redemption of the Rights after the time that an
Acquiring Person has become such only if (i) there is at least one Continuing
Director then in office and (ii) a majority of all of the Continuing
Directors then in office approves such redemption.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make a public
announcement thereof, and from and after the date of such announcement, without
any further action and without any further notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. As soon as practicable after the
election of the Board of Directors to redeem the Rights, 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 Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. NOTICE OF PROPOSED ACTION. In case the Company, after
the Rights become exercisable, shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Common Stock or the Subject Shares or
to make any other distribution to the holders of its Common Stock or Subject
Shares (other than a regular periodic cash dividend), or (ii) to offer to the
holders of its Common Stock or Subject Shares rights or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock of
any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock or Subject Shares (other than a
reclassification involving only the subdivision of outstanding shares of Common
Stock) or any recapitalization or reorganization of the Company, or (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 more than 50 percent of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person, or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Right, in accordance with Section 25, a notice of such proposed
action, which shall specify the record date for the purposes of such dividend,
distribution of rights or warrants, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holder of Common Stock and/or Subject Shares, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least twenty days prior to the
record date for determining holders of the Common Stock and/or Subject Shares
for purposes of such action, and in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of Common Stock and/or Subject Shares,
whichever shall be the earlier. The failure to give notice required by this
Section 24 or any defect thereon shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the
28
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:
Xxxx'x International, Inc.
Suite 700
000 Xxxxx Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: The President
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Equity Administrator
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of 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 (which lengthening or
shortening, after the time that any Acquiring Person has become such, shall be
effective only if (x) there is at least one Continuing Director then in office
and (y) a majority of all of the Continuing Directors then in office have
approved of such action), or (iv) to change or supplement the provisions hereof
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates;
PROVIDED, HOWEVER, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period, unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with
29
the terms of this Section 26, the Rights Agent shall execute such supplement
or amendment. Notwithstanding anything contained in this Agreement to the
contrary: (1) no supplement or amendment shall be made which changes the
Redemption Price, the Purchase Price or the number of shares or Units for
which a Right is exercisable; and (2) the duration of the Rights may not be
shortened without the written consent of the registered holders thereof
(other than by a redemption of the Rights pursuant to Section 23). Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights that
have become subject to the provisions of Section 7(f) hereof) for Common Stock
at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to a, 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 an Exempt Person) together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of the Common Stock
then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
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. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Right,
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become subject to the
provisions of Section 7(f) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient authorized
Common Stock to permit an exchange of Rights as contemplated in accordance with
this Section, the Company shall take all such action as may be necessary to
authorize additional Common Stock or securities equivalent to Common Stock for
issuance upon exchange of the Rights.
Section 28. SUCCESSOR. 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.
30
Section 29. DETERMINATION AND ACTIONS TAKEN BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock (or other applicable securities hereunder) outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock (or 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) (as in effect on the date of this
Agreement) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to such Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including without limitation the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (B) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (A) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (B) not subject the Board to
any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this agreement
shall be construed to give to any Person other than the Company, the Rights
agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock) any legal or equitable right,
remedy or claim under this Agreement. This Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the holders of
Common Stock).
Section 31. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State, except that the rights and
obligations of the Rights Agent under this Agreement shall be governed by and
construed in accordance with the laws in effect in the State of California.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. SECTION 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.
Section 34. 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, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or restriction shall
nevertheless be valid, legal and enforceable to the extent, if any, provided
by such court or authority, and (ii) 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.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
XXXX'X INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Title: President and Chief Operating Officer
--------------------------------------
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Title: Asst. Vice President
----------------------------------
S-1
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF
REDEMPTION IS MADE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE
AGREEMENT. IN THE EVENT THAT THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES
THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
XXXX'X INTERNATIONAL, INC.
This certifies that ________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the First Amended Rights Agreement, dated as of August 5, 1998 (the "Rights
Agreement"), between Xxxx'x International, Inc., a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent"),
to purchase from the Company, unless the Rights have been previously redeemed,
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to the Expiration Date (as such term is defined in the
Rights Agreement), or the date, if any, on which the Rights evidenced by this
Certificate may be redeemed, at the stock transfer office of the Rights Agent,
or its successors as Rights Agent, one one-hundredth of a fully paid and
nonassessable share of Junior Participating Preferred Stock ("Preferred
Shares"), at a purchase price of $100 (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly completed and executed. The number of Rights evidenced by this Right
Certificate as set forth above (and the number of shares which may be purchased
upon exercise thereof), and the Purchase Price per share set forth above, are
the number and Purchase Price as of March 15, 1989, based on the shares of
Common Stock of the Company as constituted at such date.
A-1
Upon the occurrence of an event described in clause (A), (B), (C) or
(D) of Section 11(a)(ii) of the Rights Agreement, the holder of any Rights that
are, or were, beneficially owned by an Acquiring Person or an Associate or
Affiliate thereof (as such terms are defined in the Rights Agreement) or certain
transferees thereof which engaged in, or realized the benefit of, an event or
transaction or transactions described in clause (A), (B), (C) or (D) of such
Section 11(a)(ii), shall not be entitled to the benefit of the adjustment
described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase Price and the number
of Preferred Shares which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and at the principal office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the stock transfer office of the Rights Agent set forth above, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase such number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right.
No fractional Preferred Shares will be issued upon the exercise of any
Rights evidenced hereby, but in lieu thereof a cash payment may be made, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Shares or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
A-2
otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________________, ______.
Attest: XXXX'X INTERNATIONAL, INC.
By:
----------------------------------- -----------------------------------
Secretary Title:
Countersigned:
-----------------------------------
By:
--------------------------------
Authorized Signature
A-3
[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 Corporation, with full power of substitution.
Dated: _________________, __________ _________________________________
Signature
Signature Guaranteed:
A-4
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _________________, __________ ___________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name us written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires
to exercise the Right Certificate.)
To Xxxx'x International, Inc.:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate and to purchase the Preferred
Shares issuable upon the exercise of such Rights and requests that
certificates for such shares 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)
______________________________________________________________________________
Dated: __________________, _____
Signature: ____________________________
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
A-6
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) 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 an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _________________, __________ _________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
A-7
EXHIBIT B
FORM OF
SUMMARY OF FIRST AMENDED
RIGHTS
At the meeting of the Board of Directors of Xxxx'x International, Inc.
(the "Company") on August 5, 1998, the Board approved the first amendment to the
Junior Participating Preferred Stock purchase rights (as amended, the "Rights")
that were initially distributed to holders of common stock of the Company
("Common Stock") on March 15, 1989 (the "Record Date").
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of the First Amended Rights Agreement (the "Rights Agreement") dated
as of August 5, 1998 by and between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agent").
Under the Rights Agreement, each outstanding share of the Company's
Common Stock is accompanied by one Right, which upon exercise, entitles the
registered holder to purchase from the Company, initially, one one-hundredth of
a share of Junior Participating Preferred Stock (the "Preferred Shares") at a
price of $100 (the "Purchase Price"), subject to adjustment. In addition, the
Company has authorized the issuance of one Right with respect to each additional
share of Common Stock that shall become outstanding between said date and the
earliest of the Distribution Date, the Expiration Date (as such terms are
hereinafter defined) or the date, if any, on which Rights may be redeemed.
Preferred shares purchasable upon exercise of the Rights will not be
redeemable. Each preferred share will be entitled to an aggregate dividend of
100 times the dividend declared on the Common Stock. In the event of
liquidation, the holders of the preferred shares will be entitled to a minimum
preferential liquidation payment of $100 per share and will be entitled to an
aggregate payment per share of 100 times the payment made per share of Common
Stock. Each preferred share will vote together with the Common Stock. Finally,
in the event of any merger, consolidation or other transaction in which shares
of Common Stock are exchanged, each preferred share will be entitled to receive
100 times the amount received per share of Common Stock.
Because of the nature of the preferred shares' dividend and
liquidation rights, the value when issued of the one one-hundredth interest in a
preferred share purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
Until the close of business on the earlier of the (i) tenth business
day after the date of the first public announcement that a person (other than
the Company or a subsidiary or employee benefit plan of the Company), together
with its affiliated and associated persons (an "Acquiring Person"), has
acquired, or obtained the right to acquire, in a transaction or series of
transactions not approved in advance by the Company's Board of Directors,
beneficial ownership of 25 percent or more of the Company's general voting power
(the date of such
B-1
announcement being called the "Stock Acquisition Date") or (ii) tenth
business day after the date of the commencement of a tender or exchange offer
by any person (other than the Company or a subsidiary or an employee benefit
plan of the Company), or the first public announcement (the date of such
commencement or announcement being called the "Offer Date") of the intent of
such a person to commence a tender or exchange offer, upon the successful
consummation of which such person, together with its affiliated and
associated persons, would be the beneficial owner of 30 percent or more of
the Company's general voting power (the tenth Business Day after the first to
occur of a Stock Acquisition Date or an Offer Date being called the
"Distribution Date" unless the Company's Board of Directors declares that the
tenth Business Day after the occurrence of an Offer Date shall not be
considered a Distribution Date) the Rights will be evidenced by the
certificates representing the Common Stock. The Rights Agreement provides
that, until the Distribution Date, the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), Common Stock certificates issued
after the record date upon transfer or new issuance of shares of Common Stock
will contain a legend incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Common Stock outstanding
on or after the record date will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until after the Distribution Date. The
Rights will expire on March 3, 2009, or on such later date to which the Rights
may be extended by the Company (the "Expiration Date.), unless earlier redeemed
by the Company as described below.
The Purchase Price payable, and number of shares of stock or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, consolidation, combination, split, reverse split
or reclassification of, Common Stock, (ii) upon the grant to holders of Common
Stock of certain rights or warrants to subscribe for Common Stock or securities
convertible into Common Stock or rights to acquire Common Stock at less than the
current market price of Common Stock or (iii) upon the distribution to holders
of Common Stock of evidences of indebtedness or other assets (excluding
dividends payable in Common Stock and regular periodic cash dividends) or of
subscription rights or warrants (other than those referred to above).
Equivalent adjustments are provided for in case of any such events relating to
the Junior Participating Preferred Stock.
A Qualified Offer is a tender offer or exchange offer for all
outstanding Common Stock which is determined by the non-management directors to
be fair to and otherwise in the best interests of the Company and its
stockholders.
In the event that, at any time after the tenth business day after a
Stock Acquisition Date, the Company is acquired in a merger or other business
combination transaction (other than a merger which follows a Qualified Offer at
the same or a higher price) or 50 percent or more of
B-2
its assets or earning power is sold, proper provision shall be made so that
each holder of a Right shall, on and after the later of (I) the date of the
occurrence of any such event or (II) the date of the expiration of the period
within which the Rights may be redeemed as indicated below, 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 of the acquiring company which
at the time of such transaction would have a market value of two times the
exercise price of the Right.
Except for a Qualified Offer or a merger which follows a Qualified
Offer at the same or a higher price, in the event that (i) an Acquiring Person
merges into or otherwise combines or consolidates with the Company and the
Company is the surviving corporation in such merger or other business
combination and its Common Stock remains outstanding and unchanged, (ii) an
Acquiring Person engages in one or more self-dealing transactions specified in
the Rights Agreement, (iii) a person (other than the Company, an Exempt Person,
any subsidiary of the Company, any employee benefit plan or employee stock plan
of the Company or of any subsidiary of the Company, or a person who acquires 25
percent or more of the general voting power of the Company in connection with a
transaction or series of transactions approved prior to such transaction or
transactions by the Board of Directors of the Company) alone, or together with
his, her or its affiliates or associates, becomes the beneficial owner of a
number of the outstanding shares of the Company's stock having in the aggregate
25 percent or more of the general voting power of the Company or (iv) during
such time as there is an Acquiring Person, any of certain events specified in
the Rights Agreement occurs which results in such Acquiring Person's ownership
interest being increased by more than one percent, then, and in each such case,
proper provision shall be made so that each holder of a Right (except as
described herein), shall, on and after the later of (x) the date of the
occurrence of any such event or (y) the date of the expiration of the period
within which the Rights may be redeemed as indicated below, have the right to
receive upon exercise that number of shares of Common Stock or equivalents
having a market value of two times the exercise price of the Right. The holder
of any Rights that are, or were, beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof or certain transferees there which engaged in, or
realized the benefit of, an event or transaction or transactions described in
this paragraph, shall not be entitled to the benefit of the adjustment described
in this paragraph.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. No fractional shares will be issued and in lieu
thereof an adjustment in cash will be made based on the market price of Common
Stock on the last trading date prior to the date of exercise.
Up to and including the tenth business day after a Stock Acquisition
Date, the Company may redeem the rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). The Company may, under certain
circumstances, amend the Rights Agreement to extend this ten business day
period. Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the Continuing
Directors. Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, the Company shall make an announcement thereof
and, upon such announcement, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
B-3
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board immediately prior to the
time that any Person became an Acquiring Person, or any member of the Board of
Directors who becomes a member of the Board subsequent to the time that any
Person shall become an Acquiring Person if such person is recommended or
approved by a majority of the Continuing Directors then in office, but shall not
include an Acquiring Person, or any representative of such Acquiring Person.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. From and
after the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights, or to shorten or
lengthen any time period under the Rights Agreement, except that (i) no time
period may be adjusted after such time as there is an Acquiring Person unless a
majority of Continuing Directors approve and (ii) the duration of the Rights may
not be shortened without the written consent of the registered holders thereof.
At any time after the Distribution Date and prior to the acquisition,
by a person or group, of 50 percent or more of the outstanding Common Stock, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such person or group) in whole or in part, at an exchange ratio of one
share of Common Stock per Right (subject to adjustment).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company with respect to a Right held, including,
without limitation, no right to vote or to receive dividends.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to an amended Registration Statement on Form
8-A/A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
B-4
EXHIBIT C
FORM
of
CERTIFICATE OF DESIGNATIONS
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
XXXX'X INTERNATIONAL, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_________________________
Xxxx'x International, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on March 3, 1989:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of preferred
stock (the "Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights, preferences,
and limitations thereof as follows:
Junior Participating Preferred Stock:
I. DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Junior Participating
Preferred Stock" (the "Junior Preferred Stock") and the number of shares
constituting the Junior Preferred Stock shall be 50,000. Such number of shares
may be increased or decreased by resolution of the Board of Directors; PROVIDED,
that no decrease shall reduce the number of shares of Junior Preferred Stock to
a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Junior Preferred Stock.
C-1
II. DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior
to the Junior Preferred Stock with respect to dividends, the holders
of shares of Junior Preferred Stock, in preference to the holders of
Common Stock, par value $1.00 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
in cash on the first day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Junior Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $1.00 or (b) subject to
the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Junior Preferred
Stock. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Junior Preferred Stock
were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Junior
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment
Date next
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preceding the date of issue of such shares, unless the date
of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares
of Junior Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Junior Preferred
Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Junior Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
III. VOTING RIGHTS
The holders of shares of Junior Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation.
(B) Except as otherwise provided herein, in any other Certificate of
Designation cresting a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Junior Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, in the Corporation's Certificate of
Incorporation or as otherwise provided by law, holders of Junior
Preferred Stock shall have no voting rights.
IV. CERTAIN RESTRICTIONS
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preferred Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Preferred
Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock;
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(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except dividends paid ratably on
the Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preferred Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock
ranking on a parity with the Junior Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section IV purchase or otherwise acquire such
shares at such time and in such manner.
V. REACQUIRED SHARES
Any shares of Junior Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein, in the Certificate of
Incorporation, in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock unless, prior thereto, the holders of shares of Junior
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
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declared, to the date of such payment, provided that the holders of shares of
Junior Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Junior Preferred Stock, except distributions made ratably on the
Junior Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VII. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Junior
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the Amber of shades
of Common Stock that were outstanding immediately prior to such event.
VIII. REDEMPTION
The shares of Junior Preferred Stock shall not be redeemable.
IX. RANK
The Junior Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
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X. AMENDMENT
The Certificate of Incorporation of the Corporation shall not be
amended in any manner which would alter or change the powers, preferences or
special rights of the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Junior Preferred Stock, voting together as a single
series.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its President and attested by its Secretary this
____ day of ______________, 1989.
_________________________________________
President
Attest:
________________________________
Secretary
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