EXHIBIT 1
RIGHTS AGREEMENT
dated as of
December 5, 1995
between
XxXxxxxxx International, Inc.
and
First Chicago Trust Company of New York,
as Rights Agent
TABLE OF CONTENTS/1/
Page
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Section 1. Definitions.......................... 1
Section 2. Appointment of Rights Agent.......... 5
Section 3. Issue of Right Certificates.......... 6
Section 4. Form of Right Certificates........... 7
Section 5. Countersignature and Registration.... 7
Section 6. Transfer and Exchange of Right
Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates... 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights........... 8
Section 8. Cancellation and Destruction of Right
Certificates........................ 10
Section 9. Reservation and Availability of
Capital Stock....................... 11
Section 10. Preferred Stock Record Date.......... 12
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number
of Rights........................... 13
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares........... 22
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or
Earning Power....................... 23
Section 14. Fractional Rights and Fractional
Shares.............................. 25
Section 15. Rights of Action..................... 27
Section 16. Agreement of Right Holders........... 27
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/1/The Table of Contents is not a part of this Agreement.
Page
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Section 17. Right Certificate Holder Not Deemed
a Stockholder....................... 28
Section 18. Concerning the Rights Agent.......... 28
Section 19. Merger or Consolidation or Change of
Name of Rights Agent................ 29
Section 20. Duties of Rights Agent............... 30
Section 21. Change of Rights Agent............... 32
Section 22. Issuance of New Right Certificates... 33
Section 23. Redemption........................... 33
Section 24. Exchange............................. 34
Section 25. Notice of Proposed Actions........... 35
Section 26. Notices.............................. 36
Section 27. Supplements and Amendments........... 37
Section 28. Successors........................... 37
Section 29. Determinations and Actions
by the Board of Directors, etc...... 37
Section 30. Benefits of this Agreement........... 38
Section 31. Severability......................... 39
Section 32. Governing Law........................ 39
Section 33. Counterparts......................... 39
Section 34. Descriptive Headings................. 39
ii
Exhibit A - Form of Certificate of Designation
of Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the
Stockholder Rights Plan
iii
RIGHTS AGREEMENT
AGREEMENT dated as of December 5, 1995, between XxXxxxxxx
International, Inc., a Panama corporation (the "Company"), and First
Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, on December 5, 1995 the Board of Directors of the
Company authorized and declared a dividend of one preferred stock purchase
right (a "Right") for each share of Common Stock (as hereinafter defined)
outstanding at the close of business on January 2, 1996 (the "Record Date")
and has authorized the issuance, upon the terms and subject to the
conditions hereinafter set forth, of one Right in respect of each share of
Common Stock issued after the Record Date, each Right representing the
right to purchase, upon the terms and subject to the conditions hereinafter
set forth, one one-hundredth of a share of Preferred Stock (as hereinafter
defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding,
but shall not include the Company, any of its Subsidiaries, any
employee benefit plan of the Company or any of its Subsidiaries or any
Person organized, appointed or established by the Company or any of
its Subsidiaries for or pursuant to the terms of any such plan.
"Affiliate" and "Associate" have the respective meanings ascribed
to such terms in Rule 12b-2 under the Exchange Act as in effect on the
date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant
to Rule 13d-3 under the Exchange Act as in effect on the date
hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise (other than pursuant to the
Rights); provided that a Person shall not be deemed the
"Beneficial Owner" of or to "beneficially own" securities
tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of its Affiliates or
Associates until such tendered securities are accepted for
payment or exchange; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of
certain events or the passage of time or both) pursuant to
any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not
be deemed the "Beneficial Owner" of or to "beneficially own"
any security under this clause (ii) as a result of an
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made
pursuant to the applicable rules and regulations under the
Exchange Act and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with
which such Person or any of its Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable
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proxy as described in subparagraph (b)(ii) immediately above) or
disposing of any such securities.
"Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Close of business" on any given date means 5:00 P.M., New York
City time, on such date; provided that if such date is not a Business
Day "close of business" means 5:00 P.M., New York City time, on the
next succeeding Business Day.
"Common Stock" means the Common Stock, par value $1.00 per share,
of the Company, except that, when used with reference to any Person
other than the Company, "Common Stock" means the capital stock of such
Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the
management, of such Person.
"Continuing Director" means any member of the Board of Directors
of the Company, while such Person is a member of the Board, who is not
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative or nominee of an Acquiring Person or of any
such Affiliate or Associate and either (a) was a member of the Board
immediately prior to the time any Person becomes an Acquiring Person
or (b) subsequently becomes a member of the Board, if such Person's
nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
"Distribution Date" means the earlier of (a) the close of
business on the tenth day (or such later day as may be designated by
action of a majority of the Continuing Directors) after the Stock
Acquisition Date and (b) the close of business on the tenth Business
Day (or such later day as may be designated by action of a majority of
the Continuing Directors) after the date of the commencement of a
tender or exchange offer by any Person if, upon consummation thereof,
such Person would be an Acquiring Person.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means the earlier of (a) the Final Expiration
Date and (b) the time at which all
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Rights are redeemed as provided in Section 23 or exchanged as provided
in Section 24.
"Final Expiration Date" means the close of business on January 2,
2006.
"Person" means an individual, corporation, partnership,
association, trust or any other entity or organization.
"Preferred Stock" means the Series D Participating Preferred
Stock, par value $1.00 per share, of the Company, having the terms set
forth in the form of certificate of designation attached hereto as
Exhibit A.
"Purchase Price" means the price (subject to adjustment as
provided herein) at which a holder of a Right may purchase one one-
hundredth of a share of Preferred Stock (subject to adjustment as
provided herein) upon exercise of a Right, which price shall initially
be $50.00.
"Section 11(a)(ii) Event" means any event described in the first
clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x), (y)
or (z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under
the Exchange Act (or any comparable or successor report)) by the
Company or an Acquiring Person indicating that an Acquiring Person has
become such.
"Subsidiary" of any Person means any other Person of which
securities or other ownership interests having ordinary voting power,
in the absence of contingencies, to elect a majority of the board of
directors or other Persons performing similar functions are at the
time directly or indirectly owned by such first Person.
"Trading Day" means a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day.
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"Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
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.
If the Company appoints one or more Co-Rights Agents, the respective duties
of the Rights Agent and any Co-Rights Agents shall be as the Company shall
determine.
Section 3. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i) the Rights will be evidenced by the certificates for
the Common Stock and not by separate Right Certificates (as hereinafter
defined) and the registered holders of the Common Stock shall be deemed to
be the registered holders of the associated Rights, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock. As soon as practicable after the Record Date, the
Company will send a summary of the Rights substantially in the form of
Exhibit C hereto, by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the Record Date
at the address of such holder shown on the records of the Company.
(b) As soon as practicable after the Company has notified the
Rights Agent of the occurrence of the Distribution Date, the Rights Agent
will send, by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company,
one or more Right Certificates evidencing one Right (subject to adjustment
as provided herein) for each share of Common Stock so held. If an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11(p), the Company shall, at the time of distribution
of the Right Certificates, make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a)) so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Rights. From and after the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of Common
Stock outstanding as of the Record Date or issued (on original issuance or
out of treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. In addition, in connection with
the issuance or sale of shares of Common Stock
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following the Distribution Date and prior to the Expiration Date, the
Company (i) shall, with respect to shares of Common Stock so issued or sold
(x) pursuant to the exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other
securities issued by the Company prior to the Distribution Date and (ii)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided that no such Right Certificate shall be issued if, and to the
extent that, (i) the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued or
(ii) appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
(d) Certificates for the Common Stock issued after the Record
Date but prior to the earlier of the Distribution Date and the Expiration
Date shall have impressed on, printed on, written on or otherwise affixed
to them the following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between XxXxxxxxx International, Inc. and First
Chicago Trust Company of New York dated as of December 5, 1995 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of the Company. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge promptly
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may
be evidenced by separate certificates and no longer be evidenced by
this certificate, may be redeemed or exchanged or may expire. As set
forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any
subsequent holder, may be null and void.
Section 4. Form of Right Certificates. (a) The certificates
evidencing the Rights (and the forms of assignment, election to purchase
and certificates to be printed on the reverse thereof) (the "Right
Certificates") shall be substantially in the form of Exhibit B hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as
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the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. The Right Certificates, whenever distributed, shall be
dated as of the Record Date.
(b) Any Right Certificate representing Rights beneficially owned
by any Person referred to in clauses (i), (ii) or (iii) of the first
sentence of Section 7(d) shall (to the extent feasible) contain the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the
Rights represented hereby may be or may become null and void in the
circumstances specified in Section 7(d) of such Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any
officer of the Company whose manual or facsimile signature is affixed to
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates may, nevertheless, 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, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or offices designated as the
place for surrender of Right Certificates upon exercise, transfer or
exchange, books for registration and transfer of the Right Certificates.
Such books shall show with respect to each Right Certificate the
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name and address of the registered holder thereof, the number of Rights
indicated on the certificate and the certificate number.
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) At any time
after the Distribution Date and prior to the Expiration Date, any Right
Certificate or Certificates may, upon the terms and subject to the
conditions set forth below in this Section 6(a), be transferred or
exchanged for another Right Certificate or Certificates evidencing a like
number of Rights as the Right Certificate or Certificates surrendered. Any
registered holder desiring to transfer or exchange any Right Certificate or
Certificates shall surrender such Right Certificate or Certificates (with,
in the case of a transfer, the form of assignment and certificate on the
reverse side thereof duly executed) to the Rights Agent at the principal
office or offices of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Certificates until the registered holder of the Rights has
complied with the requirements of Section 7(e). Upon satisfaction of the
foregoing requirements, the Rights Agent shall, subject to Sections 4(b),
7(d), 14 and 24, countersign and deliver to the Person entitled thereto a
Right Certificate or Certificates as so requested. The Company may require
payment of a sum sufficient to cover any transfer tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will issue and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein,
including Sections 7(d) and (e), 9(c), 11(a) and 24) in whole or in part at
any time after the Distribution Date and prior to
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the Expiration Date upon surrender of the Right Certificate, with the form
of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of
the Rights Agent designated for such purpose, together with payment (in
lawful money of the United States of America by certified check or bank
draft payable to the order of the Company) of the aggregate Purchase Price
with respect to the Rights then to be exercised and an amount equal to any
applicable transfer tax or other governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Stock (or make
available, if the Rights Agent is the transfer agent therefor) certificates
for the total number of one one-hundredths of a share of Preferred Stock to
be purchased (and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests) or (B) if the Company shall have
elected to deposit the shares of Preferred Stock issuable upon exercise of
the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which case certificates
for the shares of Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu
of issuance of fractional shares in accordance with Section 14 and (iii)
after receipt of such certificates or depositary receipts and cash, if any,
cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate (with such certificates or receipts
registered in such name or names as may be designated by such holder). If
the Company is obligated to deliver Common Stock, other securities or
assets pursuant to this Agreement, the Company will make all arrangements
necessary so that such other securities and assets are available for
delivery by the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing the number of Rights remaining unexercised shall be
issued by the Rights Agent and 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, subject to the provisions of
Section 14.
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(d) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any such Associate or Affiliate) to holders
of equity interests in such Acquiring Person (or in any such Associate or
Affiliate) or to any Person with whom the Acquiring Person (or any such
Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Continuing Directors have determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(d) shall become null and void without any further action,
and no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise.
The Company shall use all reasonable efforts to insure that the provisions
of this Section 7(d) and Section 4(b) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result
of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates and Associates or any transferee of any of them
hereunder.
(e) 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 of Rights upon the
occurrence of any purported transfer pursuant to Section 6 or exercise
pursuant to this Section 7 unless such registered holder (i) shall have
completed and signed the certificate contained in the form of assignment or
election to purchase, as the case may be, set forth on the reverse side of
the Right Certificate surrendered for such transfer or exercise, as the
case may be, (ii) shall not have indicated an affirmative response to
clause 1 or 2 thereof and (iii) shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise, transfer or exchange
shall, if surrendered to the Company or to any of its agents, be delivered
to the Rights
10
Agent for cancellation or in cancelled form, or, if surrendered to the
Rights Agent, shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Agreement.
The Company shall deliver to the Rights Agent for cancellation, and the
Rights Agent shall cancel, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but
not outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights
become exercisable, all securities reserved for such issuance to be listed
on any such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon
as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event as of which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as
soon as practicable after such filing and (iii) to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or blue sky
laws of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in order to prepare
and file such registration statement and permit
11
it to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time
as the suspension is no longer in effect. Notwithstanding any such
provision of this Agreement to the contrary, the Rights shall not be
exercisable for securities in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, such
exercise therefor shall not be permitted under applicable law or a
registration statement in respect of such securities shall not have been
declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one one-hundredths of a share
of Preferred Stock issuable upon exercise of Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred
Stock upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax or other governmental charge which may be
payable in respect of any transfer involved in the issuance or delivery of
any Right Certificates or of any certificates for Preferred Stock to a
Person other than the registered holder of the applicable Right
Certificate, and prior to any such transfer, issuance or delivery any such
tax or other governmental charge shall have been paid by the holder of such
Right Certificate or it shall have been established to the Company's
satisfaction that no such tax or other governmental charge is due.
Section 10. Preferred Stock Record Date. Each Person (other
than the Company) in whose name any certificate for Preferred Stock is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such Preferred Stock represented thereby on,
and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any transfer taxes or other governmental charges) was
made; provided that if the date of such surrender and payment is a date
upon which the transfer books of the Company relating to the Preferred
Stock are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the applicable transfer books of the
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Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. (a)(i) If the Company shall at any time after
the date of this Agreement (A) pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock into a greater number of shares, (C) combine the
outstanding Preferred Stock into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a
consolidation or merger involving the Company), the Purchase Price in
effect immediately prior to the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or other capital stock
issuable on such date shall be proportionately adjusted so that each holder
of a Right shall (except as otherwise provided herein, including Section
7(d)) thereafter be entitled to receive, upon exercise thereof at the
Purchase Price in effect immediately prior to such date, the aggregate
number and kind of shares of Preferred Stock or other capital stock, as the
case may be, which, if such Right had been exercised immediately prior to
such date and at a time when the applicable transfer books of the Company
were open, such holder would have been entitled to receive upon such
exercise and by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which requires an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement, become an
Acquiring Person, then proper provision shall promptly be made so that each
holder of a Right shall (except as otherwise provided herein, including
Section 7(d)) thereafter be entitled to receive, upon exercise thereof at
the Purchase Price in effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event, in lieu of Preferred Stock, such number of duly
authorized, validly issued, fully paid and nonassessable shares of Common
Stock of the Company (such shares being referred to
13
herein as the "Adjustment Shares") as shall be equal to the result obtained
by dividing
(x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
such first occurrence (such product being thereafter referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by
(y) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of Common Stock on the date of such first
occurrence;
provided that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding
or reserved for issuance other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), the Company shall, with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon payment of
the Purchase Price then in effect, (A) (to the extent available) Common
Stock and then, (B) (to the extent available) other equity securities of
the Company which a majority of the Continuing Directors has determined to
be essentially equivalent to shares of Common Stock in respect to dividend,
liquidation and voting rights (such securities being referred to herein as
"common stock equivalents") and then, if necessary, (C) other equity or
debt securities of the Company, cash or other assets, a reduction in the
Purchase Price or any combination of the foregoing, having an aggregate
value (as determined by the Continuing Directors based upon the advice of a
nationally recognized investment banking firm selected by the Continuing
Directors) equal to the value of the Adjustment Shares; provided that (x)
the Company may, and (y) if the Company shall not have made adequate
provision as required above to deliver value within 30 days following the
later of the first occurrence of a Section 11(a)(ii) Event and the first
date that the right to redeem the Rights pursuant to Section 23 shall
expire, then the Company shall be obligated to, deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, (1) (to the extent available) Common Stock and then (2) (to the
extent available) common stock equivalents and then, if necessary,
14
(3) other equity or debt securities of the Company, cash or other assets or
any combination of the foregoing, having an aggregate value (as determined
by the Continuing Directors based upon the advice of a nationally
recognized investment banking firm selected by the Continuing Directors)
equal to the excess of the value of the Adjustment Shares over the Purchase
Price. If the Continuing Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the Rights, the
30 day period set forth above (such period, as it may be extended, being
referred to herein as the "Substitution Period") may be extended to the
extent necessary, but not more than 90 days following the first occurrence
of a Section 11(a)(ii) Event, in order that the Company may seek
stockholder approval for the authorization of such additional shares. To
the extent that the Company determines that some action is to be taken
pursuant to the first and/or second sentence of this Section 11(a)(iii),
the Company (X) shall provide, subject to Section 7(d), that such action
shall apply uniformly to all outstanding Rights and (Y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form and value of any consideration to be delivered
as referred to in such first and/or second sentence. If any such
suspension occurs, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the current market price per share of Common Stock
(as determined pursuant to Section 11(d)) on the later of the date of the
first occurrence of a Section 11(a)(ii) Event and the first date that the
right to redeem the Rights pursuant to Section 23 shall expire; any common
stock equivalent shall be deemed to have the same value as the Common Stock
on such date; and the value of other securities or assets shall be
determined pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within 45 calendar
days after such record date) Preferred Stock (or securities having the same
rights, privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into or
exercisable for Preferred Stock (or equivalent preferred stock) at a price
per share of Preferred Stock (or equivalent preferred stock) (in each case,
taking account of any conversion or exercise price) less than the current
market price (as determined pursuant
15
to Section 11(d)) per share of Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such date
by a fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate price (taking account of any
conversion or exercise price) of the total number of shares of Preferred
Stock (and/or equivalent preferred stock) so to be offered would purchase
at such current market price and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date plus
the number of additional shares of Preferred Stock (and/or equivalent
preferred stock) so to be offered. In case such subscription price may be
paid by delivery of consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. Shares of Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and if such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger involving
the Company) of evidences of indebtedness, equity securities other than
Preferred Stock, assets (other than a regular periodic cash dividend out of
the earnings or retained earnings of the Company) or rights, options or
warrants (excluding those referred to in Section 11(b)), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date, less the value (as determined pursuant to Section 11(d)(iii))
of such evidences of indebtedness, equity securities, assets, rights,
options or warrants so to be distributed with respect to one share of
Preferred Stock and the denominator of which shall be such current market
price per share of Preferred Stock. Such adjustment shall be made
successively whenever such a record date is fixed, and if such distribution
is not so made, the Purchase Price shall
16
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the
30 consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), the "current market
price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the
10 consecutive Trading Days immediately following such date; and for
purposes of computations made pursuant to Section 14, the "current market
price" per share of Common Stock for any Trading Day shall be deemed to be
the closing price per share of Common Stock for such Trading Day; provided
that if the current market price per share of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities exercisable for or convertible
into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and
prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the
New York Stock Exchange, on the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading or, if
the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the 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 of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Common Stock selected
by the Board of
17
Directors of the Company, or, if at the time of such selection there is an
Acquiring Person, by a majority of the Continuing Directors. If on any
such date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the Board
of Directors of the Company (or, if at the time of such determination there
is an Acquiring Person, by a majority of the Continuing Directors) shall be
used. If the Common Stock is not publicly held or not so listed or traded,
the "current market price" per share means the fair value per share as
determined in good faith by the Board of Directors of the Company, or, if
at the time of such determination there is an Acquiring Person, by a
majority of the Continuing Directors, or if there are no Continuing
Directors, by a nationally recognized investment banking firm selected by
the Board of Directors, which determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in Section 11(d)(i) (other
than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in such manner, the "current market
price" per share of Preferred Stock shall be conclusively deemed to be an
amount equal to 100 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect
to the Common Stock occurring after the date of this Agreement) multiplied
by the current market price per share of Common Stock (as determined
pursuant to Section 11(d)(i) (other than the last sentence thereof)). If
neither the Common Stock nor the Preferred Stock is publicly held or so
listed or traded, the "current market price" per share of the Preferred
Stock shall be determined in the same manner as set forth in the last
sentence of Section 11(d)(i). For all purposes of this Agreement, the
"current market price" of one one-hundredth of a share of Preferred Stock
shall be equal to the "current market price" of one share of Preferred
Stock divided by 100.
(iii) For the purpose of any computation hereunder, the value of
any securities or assets other than Common Stock or Preferred Stock shall
be the fair value as determined in good faith by the Board of Directors of
the Company, or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors then in office, or, if
there are no Continuing Directors, by a nationally recognized investment
banking firm selected by the Board of Directors, which determination
18
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share or one-millionth of a share of Preferred Stock,
as the case may be.
(f) If at any time, as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a), the holder of any Right shall be
entitled to receive upon exercise of such Right any shares of capital stock
other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof shall
be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one one-
hundredths of a share of Preferred Stock and other capital stock of the
Company issuable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-millionth) obtained by (i) multiplying (x) the number of
one one-hundredths of a share for which a Right was exercisable immediately
prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
19
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred
Stock for which such Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per one one-hundredth of a share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
20
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the number of
one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable such number of one one-
hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date the number of one one-hundredths of a share of Preferred Stock
or other capital stock of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a share of Preferred
Stock or other capital stock of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that it, in its sole discretion, shall determine
to be advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any Preferred Stock at less
than the current market price, issuance wholly for cash of Preferred Stock
or securities which by their terms are convertible into or exercisable for
Preferred Stock, stock dividends or issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to the
holders of its Preferred Stock, shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it will not at any
time after the Distribution Date (i) consolidate, merge or otherwise
combine with or (ii) sell or otherwise transfer (and/or permit any of its
Subsidiaries to sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries, taken
as a whole, to any other Person or Persons if (x) at the time of or
immediately after such consolidation, merger, combination or sale there are
any rights, warrants or other instruments or securities
21
outstanding or any agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, combination or sale, the stockholders of
a Person who constitutes, or would constitute, the "Principal Party" for
the purposes of Section 13 shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Notwithstanding anything in this Agreement to the contrary,
if at any time after the date hereof and prior to the Distribution Date the
Company shall (i) pay a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock into a larger number of shares or (iii) combine the outstanding
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter as contemplated by Section 3(c), shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in the manner set forth in
Section 26. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
22
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. (a) If, following the Stock Acquisition Date, directly
or indirectly,
(x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation, merger or
combination,
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving
corporation of such merger or combination and, in connection with such
merger or combination, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for other stock or securities
of the Company or any other Person, cash or any other property, or
(z) the Company and/or one or more of its Subsidiaries shall
sell or otherwise transfer, in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries, taken as
a whole, to any other Person or Persons,
then, and in each such case, proper provision shall promptly be made so
that
(1) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect immediately
prior to the first occurrence of any Triggering Event, such number of duly
authorized, validly issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined), not
subject to any rights of call or first refusal, liens, encumbrances or
other claims, as shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of any Triggering
Event by the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
first occurrence (such product being thereafter referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by
(B) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of the Common Stock of such Principal
Party on the date of
23
consummation of such consolidation, merger, combination, sale or
transfer;
(2) the Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement;
(3) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and
(4) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in accordance
with this Section 13(a)) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to
the shares of its Common Stock thereafter deliverable upon the exercise of
the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x)
or (y), the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such merger,
consolidation or combination, and if no securities are so issued, the
Person that survives or results from such merger, consolidation or
combination; and
(ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such
transaction or transactions;
provided that in any such case, (A) 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, "Principal Party" shall refer to such other
Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall
24
refer to whichever of such Persons is the issuer of the Common Stock having
the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, combination, sale or transfer unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in Section 13(a) and (b) and providing that, as soon as
practicable after the date of any consolidation, merger, combination, sale
or transfer mentioned in Section 13(a), the Principal Party will
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise
of the Rights, and will use its best efforts to cause such
registration statement (A) to become effective as soon as practicable
after such filing and (B) to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Expiration Date and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, combinations, sales or other transfers. If any
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights, except prior to
the Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such
fractional Rights, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market price of a whole Right. For purposes of this Section 14(a),
the current market price of a whole Right shall be the closing price of a
Right for the Trading Day immediately prior to the date on which such
fractional Rights would
25
otherwise have been issuable. The closing price of a Right for any day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company, or, if at the time of such selection there is an
Acquiring Person, by a majority of the Continuing Directors. If on any
such date no such market maker is making a market in the Rights, the
current market price of the Rights on such date shall be as determined in
good faith by the Board of Directors of the Company, or, if at the time of
such determination there is an Acquiring Person, by a majority of the
Continuing Directors.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are multiples of one one-hundredth of a
share of Preferred Stock). In lieu of any such fractional shares of
Preferred Stock, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market price of
one one-hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market price of one one-hundredth of a share of
Preferred Stock shall be one one-hundredth of the closing price of a share
of Preferred Stock (as determined pursuant to Section 11(d)) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the
26
Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market price of a share of
Common Stock. For purposes of this Section 14(c), the current market price
of a share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of certificates representing Common Stock); and any registered
holder of any Right Certificate (or, prior to the Distribution Date, of any
certificate representing 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 any certificate representing 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. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of
27
transfer and with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights
Agent may deem and treat the Person in whose name a Right Certificate (or,
prior to the Distribution Date, a certificate representing shares of Common
Stock) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Right Certificate or the certificate representing shares of Common
Stock made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject
to the last sentence of Section 7(d), shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligation; provided that the
Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25), 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
28
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the execution or administration of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the administration of this
Agreement or the exercise or performance of its duties hereunder, including
the costs and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with the administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Right Certificate
or certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to
be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided that
such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of a 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.
29
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
"Acquiring Person" and the determination of "current market price") be
proved or established by the Company prior to taking, suffering or omitting
to take 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
any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken, suffered or
omitted in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
30
(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 change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(d)) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for in Sections 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President or any Vice President or the
Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken, suffered or omitted to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other Person.
31
(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 or to any
holders of Rights resulting from any such act, default, neglect or
misconduct, provided that reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any 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 cases may be, has
either not been completed or indicates an affirmative response to clause 1
or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise 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 Preferred Stock by registered
or certified mail, and, subsequent to the Distribution Date, to the holders
of the Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 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 Preferred Stock by
registered or certified mail, and, subsequent to the Distribution Date, to
the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may
32
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 of the United States,
in good standing, having a principal office in the State of New York, which
is authorized under such laws to exercise stock transfer or corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of
a corporation described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock, and, subsequent to the
Distribution Date, 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, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or
class of shares of stock issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to the earlier of (i) the
close of business on the tenth day after the Stock Acquisition Date (or
such later date as a majority of the Continuing Directors may designate
prior to such time as the Rights are no longer redeemable) and (ii) the
Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such
33
redemption price being hereinafter referred to as the "Redemption Price");
provided that after any Person has become an Acquiring Person, any
redemption of the Rights shall be effective only if there are Continuing
Directors then in office, and such redemption shall have been approved by a
majority of such Continuing Directors. Notwithstanding anything in this
Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights and without any further action and
without any notice, the right to exercise the Rights will terminate and
thereafter the only right of the holders of Rights shall be to receive the
Redemption Price for each Right so held. The Company shall promptly
thereafter give notice of such redemption to the Rights Agent and the
holders of the Rights in the manner set forth in Section 26; provided that
the failure to give, or any defect in, such notice shall not affect the
validity of such redemption. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in Section 23 or 24, and other than in connection with the purchase,
acquisition or redemption of shares of Common Stock prior to the
Distribution Date.
Section 24. Exchange. (a) At any time after any Person becomes
an Acquiring Person, a majority of the Continuing Directors may, at their
option, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to Section
7(d)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person (other than
the Company, any of its Subsidiaries, any employee benefit plan of the
Company or any of its Subsidiaries or any Person organized, appointed or
established by the Company or any of its Subsidiaries for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of
Common Stock then outstanding.
34
(b) Immediately upon the action of the Continuing Directors
electing to exchange any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights
will terminate and thereafter the only right of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly thereafter give notice of such exchange to the
Rights Agent and the holders of the Rights to be exchanged in the manner
set forth in Section 26; provided that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to Section 7(d)) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the
initial rate of one common stock equivalent for each share of Common Stock,
as appropriately adjusted to reflect adjustments in dividend, liquidation
and voting rights of common stock equivalents pursuant to the terms
thereof, so that each common stock equivalent delivered in lieu of each
share of Common Stock shall have essentially the same dividend, liquidation
and voting rights as one share of Common Stock.
Section 25. Notice of Proposed Actions. (a) In case the
Company shall propose, at any time after the Distribution Date, (i) to pay
any dividend payable in stock of any class to the holders of Preferred
Stock or to make any other distribution to the holders of Preferred Stock
(other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision or combination of outstanding shares of Preferred Stock) or
(iv) to effect any consolidation or merger with any other Person, or to
effect and/or to permit one or more of its Subsidiaries to effect any sale
or other transfer, in one transaction or a series of related transactions,
of assets
35
or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries, taken as a whole, to any other Person
or Persons, or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder
of a Right, to the extent feasible and in accordance with Section 26, a
notice of such proposed action, which shall specify the record date for the
purposes of any such dividend, distribution or offering of rights or
warrants, or the date on which any such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of Preferred
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 20
days prior to the record date for determining holders of the Preferred
Stock entitled to participate in such dividend, distribution or offering,
and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of Preferred Stock, whichever shall be the earlier.
The failure to give notice required by this Section 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) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a public filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Company, including the Rights, for
purposes of this Agreement and no other notice need be given to such
holders.
(c) If a Triggering Event shall occur, then, in any such case,
(1) the Company shall as soon as practicable thereafter give to each holder
of a Right, in accordance with Section 26, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) or 13, as the case may be, and
(2) all references in Section 25(a) to Preferred Stock shall be deemed
thereafter to refer to Common Stock or other capital stock, as the case may
be.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right to or on the Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of the Company indicated
on the signature page hereof or such other address as the Company shall
specify in writing to the Rights Agent. Subject to the provisions of
Section 21, any notice or demand authorized by this Agreement to be given
or
36
made by the Company or by the holder of any Right to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail (postage
prepaid) to the address of the Rights Agent indicated on the signature page
hereof or such other address as the Rights Agent shall specify in writing
to the Company. Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently
given or made if sent by first-class mail (postage prepaid) to the address
of such holder shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common
Stock. From and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Right Certificates in order (a) to
cure any ambiguity, (b) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein or (c) to change or supplement the provisions hereof in any manner
which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
Notwithstanding the foregoing, after any Person has become an Acquiring
Person, any supplement or amendment shall be effective only if there are
Continuing Directors then in office, and such supplement or amendment shall
have been approved by a majority of such Continuing Directors. 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, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of
Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common
37
Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange
Act as in effect on the date of this Agreement. The Board of Directors of
the Company (or, after any Person has become an Acquiring Person, a
majority of the Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
the right and power to (i) interpret the provisions of this Agreement and
(ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or
exchange or not to redeem or exchange the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board (or,
after any Person has become an Acquiring Person, by the Continuing
Directors) in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board of Directors of the Company or the Continuing
Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the certificates representing the shares of
Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the certificates
representing the shares of Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided that, notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or restriction is
held by such court or authority to be invalid, void or unenforceable and
the Board of Directors of the Company (or, after any Person has become an
Acquiring Person, a majority
38
of the Continuing Directors) determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the tenth day following the date of such determination
by the Board of Directors or Continuing Directors, as the case may be.
Section 32. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the Republic of Panama and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State, except that the rights and obligations of the Rights Agent shall be
governed by the law of the State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.
Section 34. Descriptive Headings. The captions herein are
included for convenience of reference only, do not constitute a part of
this Agreement and shall be ignored in the construction and interpretation
hereof.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
XXXXXXXXX INTERNATIONAL, INC.
By: __________________________
Name: X. X. Xxxxxxx
Title: Senior Vice President,
General Counsel and
Corporate Secretary
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Senior Vice
President, General Counsel
and Secretary
FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By: _________________________
Name:
Title:
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxx,
Customer Service Officer
40
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES D PARTICIPATING
PREFERRED STOCK
OF
XXXXXXXXX INTERNATIONAL, INC.
Pursuant to the laws of the Republic of Panama
I, Xxxxxxxx X. Xxxxxxx, Senior Vice President and Corporate
Secretary, of XxXxxxxxx International, Inc., a corporation organized and
existing under laws of the Republic of Panama, in accordance with the
provisions thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation of the Corporation, the Board of
Directors on December 5, 1995, adopted the following resolution creating a
series of Preferred Stock in the amount and having the designation, voting
powers, preferences and relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series D Participating Preferred Stock" (the
"Series D Preferred Stock"), and the number of shares constituting such
series shall be 702,652. Such number of shares of the Series D Preferred
Stock may be increased or decreased by resolution of the Board of
Directors; provided that no decrease shall reduce the number of shares of
Series D Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares issuable upon exercise or conversion
of outstanding rights, options or other securities issued by the
Corporation.
A-1
Section 2. Dividends and Distributions.
(A) The holders of shares of Series D 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, quarterly dividends payable on
January 1, April 1, July 1 and October 1 of each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of any
share or fraction of a share of Series D Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 and
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends or other
distributions and 100 times the aggregate per share amount of all non-cash
dividends or other distributions (other than (i) a dividend payable in
shares of Common Stock, par value $1.00 per share, of the Corporation (the
"Common Stock") or (ii) a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise)), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series D Preferred Stock.
If the Corporation shall at any time after December 5, 1995 (the "Rights
Declaration Date") pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
to which holders of shares of Series D Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series D Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other
than as described in clauses (i) and (ii) of the first sentence of
paragraph (A)); provided that if no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date (or, with respect to the first Quarterly Dividend Payment Date, the
period between the first issuance of any share or fraction of a share of
Series D Preferred Stock and such first Quarterly
A-2
Dividend Payment Date), a dividend of $1.00 per share on the Series D
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series D Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series D
Preferred Stock, unless the date of issue of such shares is on or before
the record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue and be cumulative from
the date of issue of such shares, or unless the date of issue is a date
after the record date for the determination of holders of shares of Series
D Preferred Stock entitled to receive a quarterly dividend and on or before
such Quarterly Dividend Payment Date, in which case dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
shares of Series D Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series D Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall not be more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series D Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series D Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of stockholders of
the Corporation. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Series D Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
A-3
(B) Except as otherwise provided herein or by law, the holders
of shares of Series D Preferred Stock and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a
vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series D Preferred
Stock shall be in arrears in an amount equal to six quarterly dividends
thereon, the occurrence of such contingency shall xxxx the beginning of a
period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all
shares of Series D Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period,
all holders of Preferred Stock and any other series of Preferred Stock then
entitled as a class to elect directors, voting together as a single class,
irrespective of series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the holders
of Series D Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the holders of 10%
in number of shares of Preferred Stock outstanding shall be present in
person or by proxy. The absence of a quorum of holders of Common Stock
shall not affect the exercise by holders of Preferred Stock of such voting
right. At any meeting at which holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they shall
have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual meeting, to elect
two Directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall not be
increased or decreased except by vote of the holders of Preferred Stock as
herein provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series D Preferred Stock.
A-4
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total number
of shares of Preferred Stock outstanding, irrespective of series, may
request, the calling of special meeting of holders of Preferred Stock,
which meeting shall thereupon be called by the President, a Vice President
or the Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of record
of Preferred Stock by mailing a copy of such notice to him at his last
address as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than 20 days and not later than 60
days after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be
called on similar notice by any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of Preferred
Stock outstanding, irrespective of series. Notwithstanding the provisions
of this paragraph (C)(iii), no such special meeting shall be called during
the period within 60 days immediately preceding the date fixed for the next
annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until
their successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (C)(ii) of this Section 3)
be filled by vote of a majority of the remaining Directors theretofore
elected by the holders of the class of stock which elected the Director
whose office shall have become vacant. References in this paragraph (C) to
Directors elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of Directors shall
A-5
be such number as may be provided for in the Articles of Incorporation or
bylaws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Articles of
Incorporation or bylaws). Any vacancies in the Board of Directors effected
by the provisions of clauses (y) and (z) in the preceding sentence may be
filled by a majority of the remaining Directors.
(D) The Articles of Incorporation of the Corporation shall not
be amended in any manner (whether by merger or otherwise) so as to
adversely affect the powers, preferences or special rights of the Series D
Preferred Stock without the affirmative vote of the holders of a majority
of the outstanding shares of Series D Preferred Stock, voting separately as
a class.
(E) Except as otherwise provided herein, holders of Series D
Preferred Stock shall have no special voting rights, and their consent
shall not be required for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series D Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on outstanding shares
of Series D Preferred Stock shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series D Preferred
Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series D Preferred Stock, except dividends paid ratably on the Series
D Preferred Stock and all such other parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for value any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding
A-6
up) to the Series D Preferred Stock; provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of stock of the Corporation
ranking junior (as to dividends and upon dissolution, liquidation or
winding up) to the Series D Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares
of Series D Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series D Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of Series D Preferred Stock
and all such other parity stock upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of stock
of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and
in such manner.
Section 5. Reacquired Shares. Any shares of Series D Preferred
Stock redeemed, purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock without designation as to
series and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors as permitted
by the Articles of Incorporation or as otherwise permitted under Panamanian
law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series D Preferred Stock unless, prior thereto, the holders of shares of
Series D Preferred Stock shall have received $1.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or
A-7
not declared, to the date of such payment; provided that the holders of
shares of Series D Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (2) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series D Preferred Stock, except
distributions made ratably on the Series D Preferred Stock and all such
other parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or
winding up. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series D Preferred Stock
were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash or any other property, then in any such case the
shares of Series D Preferred Stock shall at the same time be similarly
exchanged for or changed into an amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate
amount of stock, securities, cash or any other property, as the case may
be, into which or for which each share of Common Stock is changed or
exchanged. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change
of shares of Series D Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
A-8
Section 8. No Redemption. The Series D Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series D Preferred Stock shall rank junior
(as to dividends and upon liquidation, dissolution and winding up) to all
other series of the Corporation's preferred stock except any series that
specifically provides that such series shall rank junior to the Series D
Preferred Stock.
Section 10. Fractional Shares. Series D Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series D Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this __ day of December, 1995.
_________________________
[Title]
Attest:
______________________
[Title]
A-9
Exhibit B
[Form of Right Certificate]
No. R- ____________Rights
NOT EXERCISABLE AFTER THE EARLIER OF JANUARY 2, 2006 AND THE DATE ON WHICH
THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET
FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BE OR MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(d) OF THE RIGHTS AGREEMENT.]/2/
RIGHT CERTIFICATE
XXXXXXXXX INTERNATIONAL, INC.
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the holder (upon the terms and subject
to the conditions set forth in the Rights Agreement dated as of December 5,
1995 (the "Rights Agreement") between XxXxxxxxx International, Inc., a
Delaware corporation (the "Company"), and First Chicago Trust Company of
New York (the "Rights Agent") to purchase from the Company, at any time
after the Distribution Date and prior to the Expiration Date, ___ one-
hundredth[s] of a fully paid, nonassessable share of Series D Participating
----------
/2/ If applicable, insert this portion of the legend and delete the preceding
sentence.
B-1
Cumulative Preferred Stock (the "Preferred Stock") of the Company at a
purchase price of $50.00 per one one-hundredth of a share (the "Purchase
Price"), payable in lawful money of the United States of America, upon
surrender of this Right Certificate, with the form of election to purchase
and related certificate duly executed, and payment of the Purchase Price at
an office of the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the
number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of January 2, 1996, and may have been
or in the future be adjusted as a result of the occurrence of certain
events, as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (b) a
transferee of an Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (c) under
certain circumstances specified in the Rights Agreement, a transferee of an
Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such, such Rights shall become null and void, and no holder hereof shall
have any right with respect to such Rights from and after the occurrence of
such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights
Agent designated for such purpose and subject to the terms and conditions
set forth in the Rights Agreement, any Rights Certificate or Certificates
may be transferred or exchanged for another Rights Certificate or
B-2
Certificates evidencing a like number of Rights as the Rights Certificate
or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the close of
business on the tenth day after the Stock Acquisition Date (or such
later date as a majority of the Continuing Directors may designate
prior to such time as the Rights are no longer redeemable) and (ii)
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right; or
(b) at any time after any Person becomes an Acquiring Person
(but before such Person becomes the Beneficial Owner of 50% or more of
the shares of Common Stock then outstanding), exchange all or part of
the then outstanding Rights (other than Rights held by the Acquiring
Person and certain related Persons) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right. If the Rights
shall be exchanged in part, the holder of this Right Certificate shall
be entitled to receive upon surrender hereof another Right Certificate
or Certificates for the number of whole Rights not exchanged.
No fractional shares of Preferred Stock are required to be issued
upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are multiples of one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole
Rights not exercised.
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive
B-3
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.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal by its authorized officers.
Dated as of ________________, 19__
XXXXXXXXX INTERNATIONAL, INC.
By______________________
Title:
[SEAL]
Attest:
______________________
Secretary
Countersigned:
FIRST CHICAGO TRUST
COMPANY OF NEW YORK,
as Rights Agent
By____________________
Authorized Signature
B-4
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________________
hereby sells, assigns and transfers unto _________________
__________________________________________________________
(Please print name and address of transferee)
__________________________________________________________
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
______________________ Attorney, to transfer the within Right Certificate
on the books of the within-named Company, with full power of substitution.
Dated: _____________________, 19__
___________________________
Signature
Signature Guaranteed:
B-5
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are
not being assigned by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: __________, 19 __ ________________________
Signature
__________
The signatures 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.
__________
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)
To: XxXxxxxxx International, Inc.
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to purchase
shares of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that certificates
for such securities be issued in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________
(Please print name and address)
___________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
___________________________________________________________
(Please print name and address)
___________________________________________________________
Dated: ________________, 19__
___________________________
Signature
Signature Guaranteed:
B-7
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this
Right Certificate from any Person who is, was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person.
Dated: __________, 19 __ ________________________
Signature
__________
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
__________
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Exhibit C
XXXXXXXXX INTERNATIONAL, INC.
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security: The Board of Directors has declared a dividend of one
preferred stock purchase right for each outstanding
share of the Company's Common Stock, payable to holders
of record as of the close of business on January 2, 1996
(each a "Right" and collectively, the "Rights")
Transfer: Prior to the Distribution Date/3/, the Rights will be
evidenced by the
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/3/ "Distribution Date" means the earlier of:
(1) the 10th day after public announcement that any person or group
has become the beneficial owner of 15% or more of the Company's
Common Stock and
(2) the 10th business day after the date of the commencement of a
tender or exchange offer by any person which would, if consummated,
result in such person becoming the beneficial owner of 15% or more
of the Company's Common Stock,
in each case, subject to extension by a majority of the Continuing
Directors.
"Continuing Director" means any member of the Board of Directors
who was a member of the Board prior to the time an Acquiring Person
(as defined below) becomes such or any person who is subsequently
elected to the Board if such person is recommended or approved by a
majority of the Continuing Directors. Continuing Directors do not
include an Acquiring Person, an affiliate or associate of an
Acquiring Person or any representative or nominee of the foregoing.
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certificates for and will be transferred with the
Common Stock, and the registered holders of the
Common Stock will be deemed to be the registered
holders of the Rights.
After the Distribution Date, the Rights Agent will
mail separate certificates evidencing the Rights to
each record holder of the Common Stock as of the
close of business on the Distribution Date, and
thereafter the Rights will be transferable
separately from the Common Stock.
Exercise: Prior to the Distribution Date, the Rights will not
be exercisable.
After the Distribution Date, each Right will be
exercisable to purchase, for $50.00 (the "Purchase
Price"), one one-hundredth of a share of Series D
Participating Preferred Stock, par value $1.00 per
share, of the Company.
Flip-In: If any person or group (an "Acquiring Person")
becomes the beneficial owner of 15% or more of the
Company's Common Stock, then each Right (other than
Rights beneficially owned by the Acquiring Person
and certain affiliated persons) will entitle the
holder to purchase, for the Purchase Price, a number
of shares of the Company's Common Stock having a
market value of twice the Purchase Price.
Flip-Over: If, after any person has become an Acquiring Person,
(1) the Company is involved in a merger or other
business combination in which the Company is not the
surviving corporation or its Common Stock is
exchanged for other securities or assets or (2) the
Company and/or one or more of its subsidiaries sell
or otherwise transfer assets or earning power
aggregating more than 50% of the assets or earning
power of the Company and its subsidiaries, taken
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as a whole, then each Right will entitle the holder
to purchase, for the Purchase Price, a number of
shares of common stock of the other party to such
business combination or sale (or in certain
circumstances, an affiliate) having a market value
of twice the Purchase Price.
Exchange: At any time after any person has become an Acquiring
Person (but before any person becomes the beneficial
owner of 50% or more of the Company's Common Stock),
a majority of the Continuing Directors may exchange
all or part of the Rights (other than the Rights
beneficially owned by the Acquiring Person and
certain affiliated persons) for shares of Common
Stock at an exchange ratio of one share of Common
Stock per Right.
Redemption: The Board of Directors may redeem all of the Rights
at a price of $.01 per Right at any time prior to
the close of business on the 10th day after public
announcement that any person has become an Acquiring
Person (subject to extension by a majority of the
Continuing Directors).
After any person has become an Acquiring Person, the
Rights may be redeemed only with the approval of a
majority of the Continuing Directors.
Expiration: The Rights will expire on January 2, 2006, unless
earlier exchanged or redeemed.
Amendments: Prior to the Distribution Date, the Rights Agreement
may be amended in any respect.
After the Distribution Date, the Rights Agreement
may be amended in any respect that does not
adversely affect the Rights holders (other than any
Acquiring Person and certain affiliated persons).
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After any person has become an Acquiring Person, the
Rights Agreement may be amended only with the
approval of a majority of the Continuing Directors.
Voting Rights: Rights holders have no rights as a stockholder of
the Company, including the right to vote and to
receive dividends.
Antidilution
Provisions: The Rights Agreement includes antidilution
provisions designed to prevent efforts to diminish
the efficacy of the Rights.
Taxes: While the dividend of the Rights will not be taxable
to stockholders or to the Company, stockholders or
the Company may, depending upon the circumstances,
recognize taxable income in the event that the
Rights become exercisable as set forth above.
_______________
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement.
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