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Exhibit 5
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DAIRY MART CONVENIENCE STORES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
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Amended and Restated Rights Agreement
Dated as of February 8, 2000
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TABLE OF CONTENTS
Section Page
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Section 1. CERTAIN DEFINITIONS.............................................................................2
Section 2. APPOINTMENT OF RIGHTS AGENT.....................................................................7
Section 3. ISSUANCE OF RIGHT CERTIFICATES..................................................................7
Section 4. FORM OF RIGHT CERTIFICATES......................................................................8
Section 5. COUNTERSIGNATURE AND REGISTRATION...............................................................9
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES....................................................................9
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS..................................10
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.............................................12
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK......................................12
Section 10. PREFERRED STOCK RECORD DATE....................................................................13
Section 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES...............................................14
Section 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES...................................17
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER...........................17
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES........................................................20
Section 15. RIGHTS OF ACTION...............................................................................21
Section 16. Agreement of Right Holders.....................................................................21
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER..............................................22
Section 18. CONCERNING THE RIGHTS AGENT....................................................................22
Section 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF, THE RIGHTS AGENT.............................22
Section 20. DUTIES OF RIGHTS AGENT.........................................................................23
Section 21. CHANGE OF RIGHTS AGENT.........................................................................25
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.............................................................26
Section 23. REDEMPTION.....................................................................................26
Section 24. NOTICE OF PROPOSED ACTIONS.....................................................................27
Section 25. NOTICES........................................................................................27
Section 26. SUPPLEMENTS AND AMENDMENTS.....................................................................28
Section 27. SUCCESSORS.....................................................................................28
Section 28. BENEFITS OF THIS AGREEMENT.....................................................................28
Section 29. DELAWARE CONTRACT..............................................................................29
Section 30. COUNTERPARTS...................................................................................29
Section 31. DESCRIPTIVE HEADINGS...........................................................................29
Section 32. SEVERABILITY...................................................................................29
Section 33. INTERPRETATION; ABSENCE OF PRESUMPTION.........................................................29
EXHIBITS
A -- Form of Right Certificate
B --Form of Amended and Restated Certificate of Designations of Series A Junior Preferred Stock
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (this "Agreement"),
dated as of February 8, 2000, by and between DAIRY MART CONVENIENCE STORES,
INC., a Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, a New York corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Company and the First National Bank of Boston
(the "Old Rights Agent") are parties to that certain Rights Agreement, dated as
of January 19, 1996 (the "Original Rights Agreement"), and on January 19, 1996,
the Board of Directors of the Company authorized the issuance of, and declared a
dividend payable in, one right (a "Right") for each share of Class A Common
Stock, $.01 par value per share, of the Company ("Old Class A Stock"), and each
share of Class B Common Stock, $.01 par value per share, of the Company ("Old
Class B Stock", and together with the Old Class A Stock, the "Old Stock")
outstanding as of the close of business on January 29, 1996 (the "Record Date"),
each such Right representing the right to purchase one one-hundredth of a share
of Series A Junior Preferred Stock of the Company ("Preferred Stock") having the
rights and preferences set forth in the form of Certificate of Designations
filed with the Secretary of State of the State of Delaware on January 13, 1996
(the "Old Certificate"), upon the terms and subject to the conditions set forth
in the Old Rights Agreement; and
WHEREAS, the Board of Directors of the Company further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Old Stock issued between the Record Date and the earlier to occur
of the Expiration Date or the Final Expiration Date (as such terms are
hereinafter defined);
WHEREAS, on February 8, 2000, the stockholders of the Company
approved the filing of an amendment to the Company's Restated Certificate of
Incorporation, as amended, pursuant to which each outstanding share of Old Class
A Stock was reclassified into one share of Common Stock (as such term is
hereinafter defined) and each outstanding share of Old Class B Stock was
reclassified into 1.1 shares of Common Stock;
WHEREAS, in connection with the reclassification described in
the preceding paragraph, the Board of Directors of the Company determined that
it is necessary, desirable and in the best interest of the stockholders of the
Company to (i) amend and restate the Old Rights Agreement on the terms and
conditions set forth herein to reflect this reclassification, certain changes in
Delaware law and certain other changes to the Old Rights Agreement, (ii) to
change the rights agent under this Agreement from the Old Rights Agent to the
Rights Agent, and (iii) file a new Certificate of Designations in substantially
the form attached hereto as Exhibit B with the Secretary of State of the State
of Delaware to replace the Old Certificate; and
WHEREAS, the Board of Directors of the Company authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock issued between the date of the reclassification and the earlier to
occur of the Expiration Date or the Final Expiration Date (as such terms are
hereinafter defined);
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NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the total number of shares of the Voting Stock (as such term
is hereinafter defined) of the Company then outstanding; provided that, an
Acquiring Person shall not include an (i) Exempt Person (as such term is
hereinafter defined), or (ii) any Person, together with all Affiliates and
Associates of such Person, who or which would be an Acquiring Person solely by
reason of (A) being the Beneficial Owner of shares of Voting Stock of the
Company, the Beneficial Ownership of which was acquired by such Person pursuant
to any action or transaction or series of related actions or transactions
approved by the Board of Directors before such Person otherwise became an
Acquiring Person or (B) a reduction in the number of issued and outstanding
shares of Voting Stock of the Company pursuant to a transaction or a series of
related transactions approved by the Board of Directors of the Company; provided
further, that in the event such Person described in this clause (ii) does not
become an Acquiring Person by reason of subclause (A) or (B) of this clause
(ii), such Person nonetheless shall become an Acquiring Person in the event such
Person thereafter acquires Beneficial Ownership of an additional 1% of any class
of the Voting Stock of the Company, unless the acquisition of such additional
Voting Stock would not result in such Person becoming an Acquiring Person by
reason of subclause (A) or (B) of this clause (ii). Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person" as defined pursuant
to the foregoing provisions of this paragraph (a) has become such inadvertently
and without any intent to change or influence control of the Company, and such
Person divests as promptly as practicable a sufficient number of shares of
Voting Stock so that such Person would no longer be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed an "Acquiring Person" for any purposes of this
Agreement. For all purposes in this Agreement, any calculation of the number of
shares of Voting Stock outstanding at any particular time, including for
purposes of determining the particular percentage of outstanding shares of
Voting Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act (as such term is hereinafter defined), as
in effect on the date hereof, and shall reflect all outstanding shares of Voting
Stock having the power to vote in the election of members of the Board of
Directors or in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up.
(b) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), as in effect on the date of this
Agreement.
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(c) "Associate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities (and correlative terms shall have correlative
meanings):
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act
and Regulations 13D and 13G thereunder (or any comparable or
successor law or regulation), in each case as in effect on the
date hereof; or
(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 or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, other
rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own",
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange or (B) the right to vote, alone or in
concert with others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own", any securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to
a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the Exchange Act and (2) is not at the time reportable by such
Person on a Schedule 13D or Schedule 13G report under the
Exchange Act (or any comparable or successor report), other
than by reference to a proxy or consent solicitation being
conducted by such Person; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in clause (B) of subparagraph (ii) of this paragraph (d)) or
disposing of any securities of the Company; provided, however,
that for purposes of determining Beneficial Ownership of
securities under this Agreement, officers and directors of the
Company solely by reason of their status as such shall not
constitute a group (notwithstanding that they may be
Associates of one another or may be deemed to constitute a
group for purposes of Section 13(d) the Exchange Act) and
shall not be deemed to own shares owned by another officer or
director of the Company.
Notwithstanding anything in this paragraph (d) to the
contrary, a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any security underlying any
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unexercised option, warrant or right issued by the Company to acquire Voting
Stock. Further, a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any security beneficially owned by another Person solely by
reason of an agreement, arrangement or understanding with such other Person for
the purposes of: (x) soliciting the Company's stockholders for the election of
director nominees or any other stockholder resolution, the formation of and
membership on any committee for the purpose of promoting or opposing any
stockholder resolution or for electing a slate of nominees to the Company's
Board of Directors, service on such a slate of nominees, or agreement to a slate
of director nominees, provided that such other Person retains the right at any
time to withdraw as a nominee or member of any such committee, and to withhold
or revoke any vote or proxy for or against any such stockholder resolution or
for such slate of nominees; (y) entering into revocable voting agreements or the
granting or solicitation of revocable proxies with respect to any of the matters
described in the foregoing clause (x); or (z) the sharing of expenses and the
indemnification against expenses and liabilities by any such other Person with
respect to expenses incurred or conduct occurring during the time such other
Person is a nominee or a member of any such committee described in the foregoing
clause (x). Further, notwithstanding anything in this paragraph (d) to the
contrary, a Person engaged in the business of underwriting securities shall not
be deemed the "Beneficial Owner" of, or to "Beneficially Own," any securities
acquired in good faith in a firm commitment underwriting until the expiration of
forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in Cleveland, Ohio or New York,
New York are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., Cleveland, Ohio time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Connecticut time, on the next
succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the Common Stock, $.01 par value per share, of the Company. "Common
Stock" when used with reference to any Person other than the Company which shall
be organized in corporate form shall mean the capital stock or other equity
security with the greatest per share voting power of such Person. "Common Stock"
when used with reference to any Person other than the Company which shall not be
organized in corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and credits of
such Person and which shall be entitled to exercise the greatest voting power
per unit of such Person.
(h) [Intentionally omitted.]
(i) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section
1(b) hereof.
(k) "Exempt Person" shall mean (i) DM Associates Limited
Partnership, a Connecticut limited partnership ("DM Associates"), provided that
DM Associates shall not be deemed to be an Exempt Person if after the date of
this Agreement it acquires Beneficial
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Ownership of an additional one or more shares of the Voting Stock, from and
after which time it shall be deemed to be an Acquiring Person (provided that it
then falls within the definition of Acquiring Person), unless such acquisition
of Beneficial Ownership of one or more additional shares of Voting Stock is
effected pursuant to a transaction approved in advance by the Board of
Directors; (ii) for so long as DM Associates is an Exempt Person, the general
partner(s) of DM Associates and the holders of equity interests in such general
partner(s) as of the date of this Agreement, provided, that notwithstanding the
foregoing, the Persons described in this clause (ii) shall only be Exempt
Persons insofar as they would otherwise be Acquiring Persons by reason of their
Beneficial Ownership of Voting Stock held of record by DM Associates, and this
clause (ii) shall not so exempt their Beneficial Ownership of Voting Stock other
than that held of record by DM Associates for determining whether such Person
would be deemed to be an Acquiring Person hereunder, (iii) the Company, (iv) any
Subsidiary of the Company or (v) any employee benefit plan or employee stock
plan of the Company or any Subsidiary of the Company, or any trust or other
entity organized, appointed, established or holding Common Stock for or pursuant
to the terms of any such plan.
"Exempt Person" shall also mean (i) HNB Investment Corp.
("HNB"), provided that HNB shall not be deemed to be an Exempt Person if after
the date of this Agreement it acquires Beneficial Ownership of an additional one
or more shares of the Voting Stock, from and after which time it shall be deemed
to be an Acquiring Person (provided that it then falls within the definition of
Acquiring Person), unless such acquisition of Beneficial Ownership of one or
more additional shares of Voting Stock is effected pursuant to a transaction
approved in advance by the Board of Directors; and (ii) for so long as HNB is an
Exempt Person, the holders of equity interests in HNB as of the date of this
Agreement, provided, that notwithstanding the foregoing, the Persons described
in this clause (ii) shall only be Exempt Persons insofar as they would otherwise
be Acquiring Persons by reason of their Beneficial Ownership of Voting Stock
held of record by HNB, and this clause (ii) shall not so exempt their Beneficial
Ownership of Voting Stock other than that held of record by HNB for determining
whether such Person would be deemed to be an Acquiring Person hereunder.
(l) "Exercise Price" shall have the meaning set forth in
Sections 4 and 7(b) hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with Section 11(b)
hereof.
(o) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(p) "Person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, association, joint stock
company, trust, business trust, government or political subdivision,
unincorporated organization, or any other association or entity, and includes,
without limitation, an unincorporated group of persons who, by formal or
informal agreement, have taken any action with a common purpose, as well as any
syndicate or group that may be considered a single "person" under Section
14(d)(2) of the Exchange Act.
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(q) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(r) "Qualifying Tender Offer" shall mean a tender or exchange
offer for all outstanding shares of Common Stock of the Company approved by a
majority of the Board of Directors after taking into account the potential
long-term value of the Company and all other factors that they consider
relevant.
(s) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(t) "Right Certificate" shall have the meaning set forth in
Section 3(d) hereof.
(u) "Stock Acquisition Date" shall mean the date of the first
public announcement (which for purposes of this definition includes, without
limitation, the issuance of a press release or the filing of a
publicly-available report or other document with the Securities and Exchange
Commission or any other governmental agency) that a Person has become an
Acquiring Person, whether that public announcement is made by the Company or
otherwise
(v) "Subsidiary" of a Person means each entity of which that
Person is the direct or indirect general partner or as to which that Person,
directly or through one or more intermediary entities or Persons, has the right,
in the absence of any contingencies, to elect a majority of the board of
directors or other governing body or as to which that Person has the right to
receive 50% or more of the economic value of any business or other activity in
which that entity is engaged.
(w) [Intentionally omitted].
(x) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(y) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or regulatory
authority in respect of any transfer of any security, instrument or right,
including Rights, shares of Common Stock and shares of Preferred Stock.
(z) "Voting Stock" shall mean (i) the Common Stock of the
Company and (ii) any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together with
the Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up. For all purposes in this Agreement, a stated percentage of the Voting Stock
shall mean a number of shares of the Voting Stock as shall equal in voting power
that stated percentage of the total voting power of the then outstanding shares
of Voting Stock as calculated in the last sentence of Section 1(a) hereof.
Any determination required to be made by the Board of
Directors of the Company for purposes of applying the definitions contained in
this Section 1 shall be made by the Board of Directors in its good faith
judgment, which determination shall be binding on the Rights Agent and the
holders of the Rights.
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Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) [Intentionally Omitted.]
(b) Until the close of business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
business day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 30% or more of any class of the then outstanding shares of
Voting Stock of the Company (irrespective of whether any shares are actually
purchased pursuant to any such offer) (the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights shall be evidenced by
the certificates for Common Stock registered in the name of the holders of
Common Stock and not by separate Right certificates and the record holders of
such certificates for Common Stock shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only simultaneously
and together with the transfer of a share of Common Stock (subject to adjustment
as hereinafter provided). Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby.
(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earlier of
the Distribution Date, the Expiration Date or the Final Expiration Date and, in
certain circumstances provided in Section 22 hereof, may be issued in respect of
shares of Common Stock that become outstanding after the Distribution Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Company's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earlier of the Distribution Date, the Expiration Date, or the Final Expiration
Date (or, in certain circumstances as provided in Section 22 hereof, after the
Distribution Date) shall have impressed, printed, written or stamped thereon or
otherwise affixed thereto the following legend:
This certificate also evidences and entitles the
holder hereof to the same number of Rights (subject
to adjustment) as the number of shares of Common
Stock represented by this certificate, such Rights
being on the terms provided under the Amended and
Restated Rights Agreement between Dairy Mart
Convenience Stores, Inc. and American Stock Transfer
& Trust Company (the "Rights Agent"), dated as of
February 8, 2000, as it may be
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amended from time to time (the "Rights Agreement"),
the terms of which are incorporated herein by
reference and a copy of which is on file at the
principal executive offices of Dairy Mart Convenience
Stores, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights shall be
evidenced by separate certificates and shall no
longer be evidenced by this certificate. Dairy Mart
Convenience Stores, Inc. shall mail to the registered
holder of this certificate a copy of the Rights
Agreement without charge within five days after
receipt of a written request therefore. Under certain
circumstances as provided in Section 7(e) of the
Rights Agreement, Rights issued to or Beneficially
Owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights
Agreement) or any subsequent holder of such Rights
shall be null and void and may not be transferred to
any Person.
(d) As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send), by first class mail, postage prepaid, to each record holder of the Common
Stock as of the close of business on the Distribution Date, as shown by the
records of the Company, at the address of such holder shown on such records, a
certificate in the form provided by Section 4 hereof (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. As of and after the Distribution Date, the Rights shall
be evidenced solely by Right Certificates and may be transferred by the transfer
of the Right Certificate as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to purchase shares, certificate and assignment to be
printed on the reverse thereof), when, as and if issued, shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as 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 Common Stock or the Rights may from time to time be listed
or as the Company may deem appropriate to conform to usage or otherwise and as
are not inconsistent with the provisions of this Agreement. The Right
Certificates will be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 22
hereof, Right Certificates evidencing Rights whenever issued, (i) shall be dated
as of the date of issuance of the Rights they represent and (ii) subject to
adjustment from time to time as provided herein, on their face shall entitle the
holders thereof to purchase such number of shares (including fractional shares
which are integral multiples of one-hundredth of a share) of Preferred Stock as
shall be set forth therein at the price payable upon exercise of a Right
provided by Section 7(b) hereof as the same may from time to time be adjusted as
provided herein (the "Exercise Price").
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Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) Each Right Certificate shall be executed on behalf of the
Company by its Chairman of the Board, President or any 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. Each Right
Certificate shall be countersigned by the Rights Agent either manually or by
facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
Right Certificate shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and 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. Any Right Certificate may be signed on
behalf of the Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or one or more offices
designated as the appropriate place for surrender of Right Certificates upon
exercise or transfer, and in such other locations as may be required by law,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate, may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of shares of Preferred
Stock as the Right Certificate or Rights Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer any Right
Certificate shall surrender the Right Certificate at the office of the Rights
Agent designated for the surrender of Right Certificates with the form of
certificate and assignment on the reverse side thereof duly endorsed (or
enclosed with such Right Certificate a written instrument of transfer in form
satisfactory to the Company and the Rights Agent), duly executed by the
registered holder thereof or his attorney duly authorized in writing, and with
such signature duly guaranteed. Any registered holder desiring to 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 to be
split up, combined or exchanged at the office of the Rights Agent designated
therefor. Thereupon, the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any Transfer Tax
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that may be imposed in connection with any transfer, split up, combination or
exchange of any Right Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, 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, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company shall issue 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; EXERCISE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 7(e) and 23(a) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at office or offices
designated by the Rights Agent for such purpose, together with payment of the
Exercise Price for each Right exercised, subject to adjustment as hereinafter
provided, at or prior to the Close of Business on the earlier of (i) January 19,
2006 (the "Final Expiration Date") or (ii) the date on which the Rights are
redeemed as provided in Section 23 hereof (such earlier date being herein
referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $30.00 for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of Preferred
Stock or other securities to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof. The Exercise Price shall be payable in lawful money of the United States
of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment by certified check, cashier's
check, bank draft or money order payable to the Company or the Rights Agent of
the Exercise Price for the shares to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of the Right
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Preferred
Stock of the Company one or more certificates representing the number of shares
of Preferred Stock to be so purchased, and the Company hereby authorizes and
directs such transfer agent to comply with all such requests, (ii) as provided
in Section 14(b), at the election of the Company, cause depositary receipts to
be issued in lieu of fractional shares of Preferred Stock, (iii) if the election
provided for in the immediately preceding clause (ii) has not been made,
requisition from the Company the amount
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of cash to be paid in lieu of the issuance of fractional shares in accordance
with Section 14(b) hereof, (iv) after receipt of such Preferred Stock
certificates and, if applicable, depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (v) when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than Preferred
Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly take the
appropriate actions corresponding in such case to that referred to in the
foregoing clauses (i) through (v) of this Section 7(c).
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or his assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, other than pursuant to a Qualifying Tender
Offer, any Rights that are beneficially owned by (x) such Acquiring Person (or
any Associate or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined in its
sole discretion is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e), and
subsequent transferees of such Persons referred to in clause (y) and (z) above,
shall be void without any further action and any holder of such Rights shall
thereafter have no rights whatsoever with respect to such Rights under any
provision of this Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) are complied with, but shall
have no liability to any holder of Right Certificates or any other Person as a
result of its failure to make any determination with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder. No Right
Certificate shall be issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant to
the provisions of this Section 7(e) or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 7(e) or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the provisions of this Section 7(e) shall be
cancelled.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for
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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 any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED
STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or out of authorized and issued shares of Preferred Stock held
in its treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding Rights.
Upon the occurrence of any event resulting in an increase in the aggregate
number of shares of Preferred Stock issuable upon exercise of all outstanding
Rights in excess of the number then reserved, the Company shall make appropriate
increases in the number of shares of Preferred Stock so reserved.
(b) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance in accordance with this Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers'
Automated Quotation System or any successor thereto or other comparable
quotation system.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act of 1933, as
amended (the "Act"), with respect to the shares of Preferred Stock purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such
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registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for Preferred Stock, and (b) the date
of the expiration of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety days, the issuance of shares of Preferred
Stock upon exercise of a Right in order to prepare and file a registration
statement under the Act and permit it to become effective. The Company will also
take such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. 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
any required registration statement under the Act shall have been declared
effective.
(e) The Company covenants and agrees that it will pay when due
and payable any and all federal and state Transfer Taxes which may be payable in
respect of the issuance or delivery of the Right Certificates or of any shares
of Preferred Stock issued or delivered upon the exercise of Rights. The Company
shall not, however, be required to pay any Transfer Tax which may be payable in
respect of any transfer or delivery of a Right Certificate to a Person other
than, or the issuance or delivery of certificates for Preferred Stock upon
exercise of Rights in a name other than that of, the registered holder of the
Right Certificate, and the Company shall not be required to issue or deliver a
Right Certificate or certificate for Preferred Stock to a Person other than such
registered holder until any such Transfer Tax shall have been paid (any such
Transfer 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 Transfer Tax is due.
(f) The Company shall take all actions as may be necessary to
ensure that all Preferred Stock delivered upon the exercise of the Rights are,
at the time of delivery of the certificates or depository receipts for such
shares (subject to payment of the Exercise Price), duly issued, validly
authorized, fully paid and nonassessable.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for shares of Preferred Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Stock represented thereby on, and such certificate shall be
dated as of, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Exercise Price (and any applicable
Transfer Taxes) was made; provided, however, that, if the date of such surrender
and payment is a date upon which the Preferred Stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated as of, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
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Section 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES.
The Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a Right 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 or pay any dividend on Common Stock payable
in shares of Common Stock, (B) subdivide or split the outstanding shares of
Common Stock into a greater number of shares or (C) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares or effect a
reverse split of the outstanding shares of Common Stock, then and in each such
event the number of shares of Preferred Stock issuable upon the exercise of a
Right after the record date for such event (if one shall have been established
or, if not, after the date of such event) shall be the number of shares of
Preferred Stock issuable immediately prior to such event multiplied by a
fraction the numerator of which is the number of Rights outstanding immediately
prior to such event and the denominator of which is the number of Rights
outstanding immediately after such event and the Exercise Price after such event
shall be the Exercise Price in effect immediately prior to such event multiplied
by such fraction. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that any Person (other than an
Exempt Person), alone or together with its Affiliates and
Associates, shall become an Acquiring Person, except pursuant
to a Qualifying Tender Offer, then, subject to the last
sentence of Section 23(a) and except as otherwise provided in
this Section 11, each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to
receive upon exercise of such Right in accordance with the
terms of this Agreement and payment of the Exercise Price, the
greater of (1) the number of one one-hundredths of a share of
Preferred Stock for which such Right was exercisable
immediately prior to the first occurrence of the event
described in this Section 11(a)(ii) or (2) such number of one
one-hundredths of a share of Preferred Stock, based on the per
share Fair Market Value of the Preferred Stock (determined
pursuant to Section 11(b) hereof) on the date of such first
occurrence, having a value equal to twice the Exercise Price;
provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the Company does not have
available sufficient authorized but unissued Preferred Stock
to permit the adjustments required pursuant to the foregoing
subparagraph (i) or the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
and reserve for issuance such number of additional shares of
Preferred Stock as may from time to time be required to be
issued upon the exercise in full of all Rights from time to
time outstanding and, if necessary, shall use its best efforts
to obtain stockholder approval thereof. In lieu of issuing
shares of Preferred Stock in accordance with the foregoing
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subparagraphs (i) and (ii), the Company may, if the Board of
Directors determines that such action is necessary or
appropriate and not contrary to the interests of holders of
Rights, elect to issue or pay, upon the exercise of the
Rights, cash, property, shares of Preferred or Common Stock,
or any combination thereof, having an aggregate Fair Market
Value equal to the Fair Market Value of the shares of
Preferred Stock which otherwise would have been issuable
pursuant to Section 11(a)(ii), which Fair Market Value shall
be determined by an investment banking firm selected by the
Board of Directors. For purposes of the preceding sentence,
the Fair Market Value of the Preferred Stock shall be as
determined pursuant to Section 11(b). Subject to Section 23
hereof, any such election by the Board of Directors of the
Company must be made and publicly announced within thirty (30)
days after the date on which the event described in Section
11(a)(ii) occurs.
(b) For the purpose of this Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property on any date shall be determined as provided
in this Section 11(b). In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on such stock payable in shares
of Common Stock or securities convertible into shares of Common Stock, or (ii)
the effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in each such
case, the Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Company to take into account ex-dividend or post-effective date
trading. 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
applicable transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the securities are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the applicable transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average of
the high bid and low asked prices) in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use; or, if no bids for such
security are quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which such security is listed or admitted to trading is open for the transaction
of business or, if such security is not listed or admitted to trading on any
national securities exchange, a Business Day. If a security is not publicly held
or not so listed or traded, "Fair Market Value" shall mean the fair value per
share of stock or per other unit of such other security, as determined by an
independent investment banking firm experienced in the valuation of securities
selected in good faith by the Board of Directors of the Company, or, if no such
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investment banking firm is, in the good faith judgment of the Board of
Directors, available to make such determination, in good faith by the Board of
Directors of the Company; provided, however, that for purposes of making the
adjustment provided for by Section 11(a)(ii) hereof, the Fair Market Value of a
share of Preferred Stock shall not be less than 100% of the product of the Fair
Market Value of a share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred Stock (as defined
in the Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a share of the
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-hundredth of a share, as the case may
be.
(d) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be issued
upon exercise of the Rights as in the initial Right Certificates issued
hereunder but, nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon exercise of
the Rights below the then par value, if any, of the shares of Preferred Stock,
the Company shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of such Preferred
Stock at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the Company or
any recapitalization, reorganization or partial liquidation of the Company or
similar transaction, the Company shall be entitled to make such further
adjustments in the number of shares of Preferred Stock which may be acquired
upon exercise of the Rights, and such adjustments in the Exercise Price
therefor, in addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the Company shall
determine to be necessary or appropriate in order for the holders of the Rights
in such event to be treated equitably and in accordance with the purpose and
intent of this Agreement or in order that any such event shall not, but for such
adjustment, in the opinion of counsel to the Company, result in the stockholders
of the Company being subject to any United States federal income tax liability
by reason thereof.
(g) In the event the Company shall at any time after the
Record Date make any distribution on the shares of Common Stock of the Company,
whether by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the
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Company or otherwise, in cash or any debt security, debt instrument, real or
personal property or any other property (other than any shares of Common Stock
or other capital stock of the Company and other than any right or warrant to
acquire any such shares, including any debt security convertible into or
exchangeable for any such share, at less than the Fair Market Value of such
shares) and the amount of such cash dividend or the Fair Market Value of such
debt security, debt instrument or property exceeds 150% of the aggregate amount
of the cash dividends declared or paid on the Common Stock of the Company in the
15-month period immediately preceding such distribution, then and in each such
event, unless such distribution is part of or is made in connection with a
transaction to which Section 11(a)(ii) or Section 13 hereof applies, the
Exercise Price shall be reduced by an amount equal to the cash or the Fair
Market Value of such distribution, as the case may be, per share of Common Stock
of the Company. For purposes hereof, the Fair Market Value of any property
distributed to the holders of shares of Common Stock of the Company shall be the
Fair Market Value of such property as determined by an independent investment
banking firm experienced in the valuation of securities or the other property so
distributed, as the case may be, selected in good faith by the Board of
Directors of the Company, or, if no such investment banking firm is in the good
faith judgment of the Board of Directors available to make such determination,
in good faith by the Board of Directors of the Company, whose determination
shall be final and binding on the Company, the Rights Agent and the holders of
Rights.
Section 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11, 13 or
23(c), the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) 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 make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment to be made
pursuant to Section 11, 13 or 23(c) of this Agreement shall be effective as of
the date of the event giving rise to such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) Except for any transaction approved by the Board of
Directors prior to the time the Rights become nonredeemable pursuant to Section
23, in the event that, at any time on or after the Distribution Date, (x) the
Company shall, directly or indirectly, consolidate with, or merge with and into,
any other Person or Persons (other than an Exempt Person) and the Company shall
not be the surviving or continuing corporation of such consolidation or merger,
or (y) any Person or Persons (other than an Exempt Person) shall, directly or
indirectly, consolidate with, or merge with and into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person (other than an Exempt Person)
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or of the Company or cash or any other property, or (z) the Company or one or
more of its Subsidiaries shall, directly or indirectly, sell or otherwise
transfer to any other Person or any Affiliate or Associate of such Person, in
one or more transactions, or the Company or one or more of its Subsidiaries
shall sell or otherwise transfer to any Persons in one or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole), then, on
the first occurrence of any such event, proper provision shall be made so that
(i) each holder of record of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof and
payment of the Exercise Price in accordance with the terms of this Agreement,
such number of shares of validly issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as defined herein), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall, based on the Fair Market Value of the Common Stock of the Principal Party
on the date of the Consummation of such consolidation, merger, sale or transfer,
equal to twice the Exercise Price; (ii) such 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; (iii) the term "Company" for all purposes of this Agreement shall
thereafter be deemed to refer to such Principal Party; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with the
provisions of Section 9 hereof applicable to the reservation of Preferred Stock)
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 its shares of 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 of the 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 Exercise Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had it, 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 and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause (x), (y) or (z)
above of this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which shares
of Common Stock of the Company are changed or otherwise
exchanged or converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer of 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 such
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) if the Person that is the other party to
the merger or consolidation does not survive the merger or
consolidation, the Person that
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does survive the merger or consolidation (including the
Company if it survives); and
(ii) in the case of any transaction described in (z)
of the first sentence in 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 as is the
issuer of Common Stock having the greatest market value of
shares outstanding; provided, however, that in any such case,
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 Person
the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if
such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of all of which are and
have been so registered, the term "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common
Stock having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in Section 13(a)
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights and in accordance with this Section 13 and unless
prior thereto the Company the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Agreement in accordance with
Section 13(a) hereof and that all rights of first refusal or preemptive rights
in respect of the issuance of shares of Common Stock of the Principal Party upon
exercise of outstanding Rights have been waived and that such transaction shall
not result in a default by the Principal Party under this Agreement, and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale or transfer of assets or earning power referred to in Section
13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the
date of expiration of the Rights, and similarly comply with
applicable state securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to
meet the eligibility requirements for quotation on NASDAQ; and
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(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act. In the event
that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights which have
not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable
in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Fair
Market Value per share (determined pursuant to Section 11(b) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then Fair Market Value (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special tax or similar
payment in connection with the issuance to any holder of a Right of Common Stock
of such Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended, or
that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
This Section 13 will similarly apply to successive mergers or
consolidations or sales or other transfers.
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
(i.e., Rights to acquire less than one one-hundredth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to in
Section 11(a)(i) hereof. If the Company shall determine not to issue such
fractional Rights, then, in lieu of such fractional Rights, there shall be paid
to the holders of record 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 Fair Market Value of a whole Right.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one- hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one-hundredth of a share). In lieu of issuing fractions of
shares of Preferred Stock, the Company may, at its election, issue depositary
receipts evidencing fractions of shares pursuant to an appropriate agreement
between
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23
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all of the
rights, privileges and preferences to which they would be entitled as owners of
the Preferred Stock. With respect to fractional shares that are not integral
multiples of one-hundredth of a share, if the Company does not issue such
fractional shares or depositary receipts in lieu thereof, there shall be paid to
the holders of record 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 Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share) upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act 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.
Each holder of a Right, by accepting the same, consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Stock registered in the name of the
holders of Common Stock, which certificates for Common Stock shall also
constitute certificates for Rights, and not by separate Right Certificates, and
each Right shall be transferable only simultaneously and together with the
transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(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
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24
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 Preferred Stock or any
other securities 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 (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions 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 gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the cost and expenses of defending
against any claim of liability relating to the Rights or this Agreement.
(b) The Rights Agent shall be protected against, 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 Preferred Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
(c) The Rights Agent will not be liable for consequential
damages under any provision of this Agreement or for any consequential damages
arising out of any act or failure to act hereunder.
Section 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF,
THE 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
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25
party, or any corporation succeeding to the corporate trust or stock transfer
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement any
of the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the 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; 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; 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 selected
by it (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
or any Vice President and by the Treasurer or the Secretary of the Company and
delivered to the Rights Agent. Any such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its
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26
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or 13 hereof 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 receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred 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 performing by
the Rights Agent of the provisions of the 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 or any Vice President or the Secretary
or the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(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 the 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) No provision of this Agreement requires the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there are reasonable grounds for believing that
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repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) 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) or clause
(2) thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
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.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail to make such appointment within a period of 30 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 incumbent Rights Agent or the holder of
record 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 (a) a corporation
organized and doing business under the laws of the United States or of any state
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination in the conduct of its corporate trust or stock transfer business by
federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $5,000,000 or (b) an
Affiliate controlled by a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed, but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred 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. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until a
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
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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 Exercise Price per share and 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 Company may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than all of the then
outstanding Rights, at any time prior to the Close of Business on the earlier of
(i) the tenth day following the Stock Acquisition Date (subject to extension by
the Company as provided in Section 26 hereof) or (ii) the Final Expiration Date,
at a redemption price of $.01 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder.
(b) Without any further action and without any notice, the
right to exercise the Rights will terminate at the effective time of the action
of the Board of Directors ordering the redemption of the Rights and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within 10 days after the effective time of the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each notice of redemption will state the method by
which the payment of the Redemption Price will be made. At the option of the
Board of Directors, the Redemption Price may be paid in cash to each Rights
holder or by the issuance of shares (and, at the Company's election pursuant to
Section 14(b) hereof, cash or depositary receipts in lieu of fractions of shares
other than fractions which are integral multiples of one one-hundredth (1/100)
of a share) of Preferred Stock having a Fair Market Value equal to such cash
payment.
(c) In the event the Company shall at any time after the date
of this Agreement (A) pay any dividend on Common Stock in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares or (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then, and in each such event, the Redemption
Price shall be adjusted so that the Redemption Price after such event shall
equal the Redemption Price immediately prior to such event multiplied 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 outstanding immediately prior to such event;
provided, however, that in each case such adjustment to the Redemption Price
shall be made only if the amount of the Redemption Price shall be reduced or
increased by $.01 per Right.
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Section 24. NOTICE OF PROPOSED ACTIONS.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
11(g) or (ii) to offer to the holders of record of its Common Stock options,
warrants, or other rights to subscribe for or to purchase shares of Common Stock
(including any security convertible into or exchangeable for Common Stock) or
shares of stock of any class or any other securities, options, warrants,
convertible or exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock or Common Stock or any recapitalization
or reorganization of the Company, or (iv) to effect any consolidation or merger
with or into, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons, 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 record of a Right
Certificate, in accordance with Section 25, notice of such proposed action,
which shall specify the record date for the purposes of such transaction
referred to in Section 11(a)(i) or such dividend or distribution, or the date on
which such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up is
to take place and the record date for determining participation therein by the
holders of record of Common Stock or Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of record of Common Stock or Preferred Stock, whichever shall be
the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(i), 11(g) or 13 of this Agreement are proposed, then, in any such case,
the Company shall give to each holder of Rights, in accordance with Section 25
hereof, notice of the proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section 11(a)(i), 11(g)
or 13 hereof, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Dairy Mart Convenience Stores, Inc.
One Dairy Mart Way
000 Xxxxxxxxx Xxxxxxx
Xxxx Xxxxxx, Xxxx 00000
Attention: Corporate Secretary
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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 record of any
Right Certificate or Right 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:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right 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. For as long as the
Rights are then redeemable and except as provided in the last sentence of this
Section 26, the Company may in its sole and absolute discretion, 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 the Rights. At any time when
the Rights are not then redeemable and except as provided in the last sentence
of this Section 26, the Company may, and the Rights Agent shall if the Company
so directs, supplement or amend this Agreement without the approval of any
holders of Right Certificates (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable,
provided that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Right
Certificates. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. This Agreement may be amended or supplemented at
any time with the approval of a majority of the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock).
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price or the
Final Expiration Date and supplements or amendments may be made after the time
that any Person becomes an Acquiring Person (other than pursuant to a Qualifying
Tender Offer).
Section 27. SUCCESSORS. All of the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation 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 in their
capacity as holders of the Rights) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the
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Company, the Rights Agent and the holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights).
Section 29. DELAWARE CONTRACT. 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 and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 30. 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 31. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 32. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. INTERPRETATION; ABSENCE OF PRESUMPTION.
(a) For the purposes hereof, (i) words in the singular include
the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (ii) the terms "hereof," "herein," and
"herewith" and words of similar import, unless otherwise stated, refer to this
Agreement as a whole (including all of the Exhibits hereto) and not to any
particular provision of this Agreement, and Section, paragraph, and Exhibit
references are to the Sections, paragraphs and Exhibits in and to this Agreement
unless otherwise specified, (iii) the word "including" and words of similar
import when used in this Agreement mean "including, without limitation," unless
otherwise specified, and (iv) the word "or" shall not be exclusive, but means
"and/or."
(b) This Agreement will be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
Page 29
32
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
DAIRY MART CONVENIENCE STORES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Executive Vice President
-------------------------------------
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
-------------------------------------
Page 30
33
EXHIBIT A
[Form of Right Certificate]
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER JANUARY 19, 2006 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AND UNDER
CERTAIN OTHER CIRCUMSTANCES, AT $.01 PER RIGHT (SUBJECT TO ADJUSTMENT), ON THE
TERMS SET FORTH OR REFERRED TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS
ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY
PERSON.
Right Certificate
DAIRY MART CONVENIENCE STORES, 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
Amended and Restated Rights Agreement dated as of February 8, 2000 (the "Rights
Agreement") between Dairy Mart Convenience Stores, Inc., a Delaware corporation
(the "Company"), and American Stock Transfer & Trust Company, a New York
corporation (the "Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M. (Connecticut time) on January 19, 2006 at the office of the
Rights Agent designated in the Rights Agreement for such purpose, or its
successor as Rights Agent, in New York, New York, one one-hundredth (1/100) of a
fully paid nonassessable share of Series A Junior Preferred Stock (the
"Preferred Stock") of the Company at a purchase price of $30.00, as the same may
from time to time be adjusted in accordance with the Rights Agreement (the
"Exercise Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock 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 and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a
Page A-1
34
full description of the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company and the holders of record of Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive office of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent designated in the
Rights Agreement for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder of record to purchase a like aggregate number of shares of
Preferred Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, 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 or
under certain other circumstances at a redemption price of $.01 per Right.
No fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth (1/100) of a share) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
and in lieu thereof the Company may cause depositary receipts to be issued
and/or a cash payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _____________, ____.
ATTEST: DAIRY MART CONVENIENCE STORES, INC.
By
------------------------------- -------------------------------
Secretary Title:
Countersigned:
Page A-2
35
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By
----------------------------
Authorized Signature
[Form of Reverse Side of Right Certificate]
Page A-3
36
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED ____________________________ hereby sells,
assigns and transfers unto __________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ____________________ Attorney to transfer the within Right Certificate
on the books of the within-named Company, with full power of substitution.
Dated: ________________, _____
------------------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated: ____________, _____ ______________________________
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Page A-1
37
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO DAIRY MART CONVENIENCE STORES, INC.:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of such Rights and requests
that certificates for such share(s) be issued in the following name:
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 fact of this
Right Certificate)
Signature Guaranteed:
Page A-2
38
EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PREFERRED STOCK
OF
DAIRY MART CONVENIENCE STORES, INC.
Pursuant to Section 151 of the Delaware
General Corporation Law
Dairy Mart Convenience Stores, Inc., a corporation organized
and existing under the Delaware General Corporation Law (the "Company"), in
accordance with the provisions of Section 151(g) of such law, DOES HEREBY
CERTIFY as follows:
FIRST: On January 13, 1996 at 3:30 p.m., the Certificate of
Designation of Series A Junior Preferred Stock of the Company was filed that
created a series of 89,400 shares of Preferred Stock designated as Series A
Junior Preferred Stock.
SECOND: None of the 89,400 shares of Preferred Stock
designated as Series A Junior Preferred Stock are outstanding and none have ever
been issued.
THIRD: On December 16, 1999 the Board of Directors, pursuant
to Section 151(g) of the Delaware General Corporation Law and the authority
vested in the Board of Directors of the Company in accordance with the
provisions of Article IV, paragraph B of the amendment to the Restated
Certificate of Incorporation of the Company adopted the following resolutions:
RESOLVED, that upon the effectiveness of the
Amendment, that the Rights Plan dated January 19, 1996 between the
Company and Fleet Bank, successor to The First National Bank of Boston
(the "Rights Plan"), is hereby amended and restated in its entirety,
including the Certificate of Designation that sets forth the terms of
the Series A Junior Preferred Stock, par value $.01 per share (the
"Certificate of Designation"), in the form presented to the members of
the Board of Directors in advance of this meeting;
FURTHER RESOLVED, that the Authorized Officers are,
and each of them acting alone is, hereby authorized and directed to
execute and deliver, for and on behalf of the Company, the Rights
Agreement and any certification in connection with the filing of the
Certificate of Designation, with such changes therein and modifications
thereto (which changes and modifications may be of a substantive
nature) as may be approved by such Authorized Officer who is executing
the same, with his or her execution thereof to be conclusive evidence
of such approval;
FURTHER RESOLVED, that the Chairman of the Board and
the Chief Executive Officer are, and each of them acting along is,
hereby authorized,
Page B-1
39
but not required, to terminate Fleet Bank as the Rights Agent and
substitute therefor any other reputable agent, including American Stock
Transfer & Trust Company; and
FURTHER RESOLVED, that the Authorized Officers of the
Company are, and each of them is, hereby empowered and directed to take
any further action to do any other things they deem necessary or
desirable in connection with carrying out the foregoing resolutions,
including filing the amended and restated Certificate of Designation
with the Secretary of the State of the State of Delaware.
FOURTH: Pursuant to the resolutions adopted by the Board of
Directors of the Company, the Certificate of Designation previously filed with
the Secretary of the State of Delaware on January 13, 1996 amends and restates
this series of 89,400 shares of Preferred Stock designated as Series A Junior
Preferred Stock, as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as "Series A Junior Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
89,400.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on the Common Stock, $0.01 par value per share, of
the Company (the "Common Stock") and (ii) a preferential cash dividend (the
"Preferential Dividends"), if any, in preference to the holders of any class of
Common Stock, on the first day of February, May, August and November of each
year (each 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 Series A Preferred Stock, payable in an amount (except in the case
of the first Quarterly Dividend Payment if the date of the first issuance of
Series A Preferred Stock is a date other than a Quarterly Dividend Payment date,
in which case such payment shall be a prorated amount of such amount) equal to
$.10 per share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence 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 Series A Preferred Stock. In the
event the Company shall, at any time after the issuance of any share or fraction
of a share of Series A Preferred Stock, make any distribution on the shares of
Common Stock of the Company, whether by way of a dividend or a reclassification
of stock, a recapitalization, reorganization or partial liquidation of the
Company or otherwise, which is payable in cash or any debt security, debt
instrument, real or personal property or any other property (other than cash
dividends subject to the immediately preceding sentence, a distribution of
shares of Common Stock or other capital stock of the Company or a distribution
of rights or warrants to acquire any such share, including any debt security
convertible into or exchangeable for any such share, at a price less than the
Fair Market Value
Page B-2
40
(as hereinafter defined) of such share), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind, of 100 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the Series
A Preferred Stock to which holders thereof are entitled pursuant to clause (i)
of the first sentence of this paragraph and pursuant to the second sentence of
this paragraph are hereinafter referred to as "Dividends" and the multiple of
such cash and non-cash dividends on the Common Stock applicable to the
determination of the Dividends, which shall be 100 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple". In the event the Company shall at any time after
February 8, 2000 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Dividend Multiple thereafter applicable to the determination of
the amount of Dividends which holders of shares of Series A Preferred Stock
shall be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied 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 Company shall declare each Dividend at the same time
it declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common shall be
simultaneously paid, or set aside for payment, on the Series A Preferred Stock.
(C) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of Stock issuance of any shares of Series A
Preferred Stock. Accrued but unpaid Preferential Dividends shall cumulate but
shall not bear interest. Preferential Dividends paid on the shares of Series A
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.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1 vote on all matters submitted to a vote of the holders of the Common Stock.
The number of votes which a holder of Series A Preferred Stock is entitled to
cast, as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". In the event the Company shall
at any time after February 8, 2000 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Vote Multiple thereafter applicable to the determination of the
Page B-3
41
number of votes per share to which holders of shares of Series A Preferred Stock
shall be entitled after such event shall be the Vote Multiple immediately prior
to such event multiplied 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) Except as otherwise provided herein, in the Restated
Certificate of Incorporation or By-laws, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Stock for four or more quarterly dividend periods,
whether consecutive or not, shall not have been declared and paid or irrevocably
set aside for payment, the holders of record of Preferred Stock of the Company
of all series (including the Series A Preferred Stock), other than any series in
respect of which such right is expressly withheld by the Restated Certificate of
Incorporation or the authorizing resolutions included in any Certificate of
Designations therefor, shall have the right, at the next meeting of stockholders
called for the election of directors, to elect two members to the Board of
Directors, which directors shall be in addition to the number required by the
By-laws prior to such event, to serve until the next Annual Meeting and until
their successors are elected and qualified or their earlier resignation, removal
or incapacity or until such earlier time as all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred Stock shall have
been paid (or irrevocably set aside for payment) in full. The holders of shares
of Series A Preferred Stock shall continue to have the right to elect directors
as provided by the immediately preceding sentence until all accrued and unpaid
Preferential Dividends upon the outstanding shares of Series A Preferred Stock
shall have been paid (or set aside for payment) in full. Such directors may be
removed and replaced by such stockholders, and vacancies in such directorships
may be filled only by such stockholders (or by the remaining director elected by
such stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.
(D) Except as otherwise required by the Restated Certificate
of Incorporation or By-laws or set forth herein, holders of Series A Preferred
Stock shall have no other special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for the taking of any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever Preferential Dividends or Dividends are in
arrears or the Company shall be in default of payment thereof, thereafter and
until all accrued and unpaid Preferential Dividends and Dividends, whether or
not declared, on shares of Series A Preferred Stock outstanding shall have been
paid or set irrevocably aside for payment in full, and in addition to any and
all other rights which any holder of shares of Series A Preferred Stock may have
in such circumstances, the Company shall not
Page B-4
42
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration, any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series A Preferred Stock, unless dividends are paid
ratably on the Series A 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 if
the full dividends accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Company ranking junior (both
as to dividends and upon liquidation, dissolution or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up), except in accordance with
a purchase offer made to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any Subsidiary (as
hereinafter defined) of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company unless the Company could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such shares at
such time and in such manner. A "Subsidiary" of the Company shall mean any
corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the board of
directors of such corporation or other entity or other persons performing
similar functions are beneficially owned, directly or indirectly, by the Company
or by any corporation or other entity that is otherwise controlled by the
Company.
(C) The Company shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Amended and Restated Rights Agreement dated as of February 8, 2000 between the
Company and American Stock Transfer & Trust Company, a copy of which is on file
with the Secretary of the Company at its principal executive office and shall be
made available to stockholders of record without charge upon written request
therefor addressed to said Secretary. Notwithstanding the foregoing sentence,
nothing contained in the provisions hereof shall prohibit or restrict the
Company from issuing for
Page B-5
43
any purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Series A Preferred Stock.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares upon their retirement and cancellation shall become authorized but
unissued shares of Preferred Stock, without designation as to series, and such
shares may be reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the Board of Directors.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
no distribution shall be made (i) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock unless the holders of shares of Series A
Preferred Stock shall have received, subject to adjustment as hereinafter
provided, (A) $100.00 per share of Preferred Stock plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment or, (B) if greater than the amount specified in
clause (i)(A) of this sentence, an amount equal to 100 times the aggregate
amount to be distributed per share to holders of Common Stock, as the same may
be adjusted as hereinafter provided and (ii) to the holders of stock ranking on
a parity upon liquidation, dissolution or winding up with the Series A Preferred
Stock, unless simultaneously therewith distributions are made ratably on the
Series A Preferred Stock and all other shares of such parity stock in proportion
to the total amounts to which the holders of shares of Series A Preferred Stock
are entitled under clause (i)(A) of this sentence and to which the holders of
such parity shares are entitled, in each case upon such liquidation, dissolution
or winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to said clause to
the determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple". In the event the Company shall at any time
after February 8, 2000 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then, in each such case, the
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series A Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS. (A) In
the event that holders of shares of Common Stock of the Company receive after
February 8, 2000 in respect of their shares of Common Stock any share of capital
stock of the Company (other than any share of Common Stock of the Company),
whether by way of reclassification, recapitalization,
Page B-6
44
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall be adjusted so that after such event the holders
of Series A Preferred Stock shall be entitled, in respect of each share of
Series A Preferred Stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such Transaction multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a share of Common
Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such Transaction multiplied by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company by virtue of the receipt
in the Transaction of such capital stock, as the case may be, all as provided by
the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the
Company receive after February 8, 2000 in respect of their shares of Common
Stock any right or warrant to purchase Common Stock (including as such a right,
for all purposes of this paragraph, any security convertible into or
exchangeable for Common Stock) at a purchase price per share less than the Fair
Market Value of a share of Common Stock on the date of issuance of such right or
warrant, then and in each such event the dividend rights, voting rights and
rights upon the liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the
Company receive after February 8, 2000 in respect of their shares of Common
Stock any right or warrant to purchase capital stock of the Company (other than
shares of Common Stock), including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for capital stock of
the Company (other than Common Stock), at a purchase price per share less than
the Fair Market Value of such shares of capital stock on the date of issuance of
such right or warrant, then and in each such event the dividend rights, voting
rights and rights upon liquidation, dissolution or winding up of the Company of
the shares of Series A Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series A Preferred Stock shall be entitled, in
respect of each share of Series A Preferred Stock held, in addition to such
rights in
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respect thereof to which such holder was entitled immediately prior to such
event, to receive (i) such additional dividends as equal the Dividend Multiple
in effect immediately prior to such event multiplied, first, by the additional
dividends to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction (as
hereinafter defined) and (ii) such additional voting rights as equal the Vote
Multiple in effect immediately prior to such event multiplied, first, by the
additional voting rights to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distributions upon liquidation, dissolution
or winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Company as contemplated by this paragraph immediately after
the distribution thereof and the purchase price per share for such share of
capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.
(D) For purposes of this Certificate of Designations, the
"Fair Market Value" of a share of capital stock of the Company (including a
share of Common Stock) on any date shall be deemed to be the average of the
daily closing price per share thereof over the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that, in the event that such Fair Market Value of any such share of
capital stock is determined during a period which includes any date that is
within 30 Trading Days after (i) the ex-dividend date for a dividend or
distribution on stock payable in shares of such stock or securities convertible
into shares of such stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. 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 applicable transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the shares are not listed or admitted to trading on the New
York Stock Exchange, as reported in the applicable transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares are listed or admitted to trading or, if the shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or if on any such date the shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the shares selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a day
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46
on which the principal national securities exchange on which the shares are
listed or admitted to trading is open for the transaction of business or, if the
shares are not listed or admitted to trading on any national securities
exchange, on which the New York Stock Exchange or such other national securities
exchange as may be selected by the Board of Directors of the Company is open. If
the shares are not publicly held or not so listed or traded on any day within
the period of 30 Trading Days applicable to the determination of Fair Market
Value thereof as aforesaid, "Fair Market Value" shall mean the fair market value
thereof per share as determined in good faith by the Board of Directors of the
Company. In either case referred to in the foregoing sentence, the determination
of Fair Market Value shall be described in a statement filed with the Secretary
of the Company.
Section 8. CONSOLIDATION, MERGER, ETC. In case the Company
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
outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series A Preferred Stock required by
the provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect of any adjustment to
the voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Company of such shares required by the provisions hereof.
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 or the
requirement for such adjustment.
Section 10. NO REDEMPTION. The shares of Series A Preferred
Stockshall not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
provisions hereof and the Restated Certificate of Incorporation of the Company.
Section 11. RANKING. Unless otherwise provided in the Restated
Certificate of Incorporation of the Company or a Certificate of Designations
relating to a subsequent series of preferred stock of the Company, the Series A
Preferred Stock shall rank junior to all other series of the Company's preferred
stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up and senior to the Common Stock.
Section 12. AMENDMENT. The provisions hereof and the Restated
Certificate of Incorporation of the Company shall not be amended in any manner
which would adversely affect the rights, privileges or powers of the Series A
Preferred Stock without, in addition to any other
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47
vote of stockholders required by law, the affirmative vote of the holders of
two-thirds or more of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate of Designations and do affirm the foregoing as true under the
penalties of perjury this 8th day of February, 2000.
DAIRY MART CONVENIENCE STORES, INC.
By:
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Xxxxxxx X. Xxxxxx,
Executive Vice President
ATTEST:
-----------------------------------
Xxxxx Xxxxx, Assistant Secretary
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